Resolution of grounds 2(a), 2(b)(i)-(v), 2(c)-(e) and 3
80 Puma characterises these as the "connection with Caterpillar grounds" the essence of which is concerned with the analysis of trade context by the primary judge.
81 His Honour extensively summarised the evidence and made factual findings commencing at PJ [15] and concluding at [85] on each of the following topics: (1) the history of the business of Puma, in particular the marketing and sale of its products commencing in 1957; (2) the development and evolution by Puma of its well-known leaping cat trade mark; (3) use of the trade mark PROCAT in the USA and Canada; (4) the history and development of the Caterpillar business from formation as a heavy machinery manufacturing company in the USA in 1892 and subsequent diversification into many business enterprises including, from the 1970's, diversification to the manufacture and branding of footwear, clothing and related apparel; (5) development and registration of the various forms of Caterpillar trade marks; (6) the licensing arrangements of Caterpillar for use of its trade marks in relation to a range of consumer goods; (7) the marketing and sale of CAT branded goods in Australia; (8) the substantial and valuable reputation acquired by Caterpillar in each of its CAT marks in Australia; and (9) competition between Caterpillar and Puma in relation to the supply of apparel, footwear, bags and accessories in Australia.
82 Puma does not contend in any of its draft appeal grounds that these findings were not open on the evidence. In several respects, the complaints focus upon the weight given by the primary judge to his findings of fact. Other complaints focus upon the evaluative task undertaken by the primary judge in order to address the issue of deceptive similarity. At the outset, the difficulty that Puma faces in so framing the draft appeal grounds is that it must identify specific error of fact or law that infect the evaluation undertaken by the primary judge. As explained above, it is insufficient that reasonable minds might differ upon the outcome of the evaluative assessment that is involved.
83 We do not accept as valid the distinction sought to be drawn by Puma that whilst consumers will likely pronounce PROCAT as comprising two syllables, nonetheless they will appreciate it as a combination of two separate words. In our view, that is a strained and quite unrealistic distinction and the primary judge was correct not to accept it in his reasoning which relevantly at PJ [108]- [109] was:
First, the word "cat" comprises the whole of the CAT word mark and one of the two elements of the CAT device mark (the second element being the triangle under the letter "a"). The word "cat" constitutes half the letters of the PROCAT mark and one of its two syllables.
Second, an ordinary consumer is likely to read, comprehend and pronounce the PROCAT mark as a combination of two words, "pro" and "cat". Neither party adduced evidence of a linguistics expert in relation to the likely manner of reading, comprehending and pronouncing the PROCAT mark by ordinary English speaking Australian consumers. However, that does not prevent the Court from making findings with respect to that issue, in circumstances where the PROCAT mark comprises a word using letters of the English (Roman) alphabet which will be directed to ordinary Australian consumers of work wear and lifestyle apparel, footwear, bags and accessories: see Companhia Souza Cruz Industria E Comercio v Rothmans of Pall Mall (Australia) Ltd (1998) 41 IPR 497 at 504. Caterpillar submitted, and I accept, that the PROCAT mark is likely to be read and pronounced by ordinary Australian consumers in a manner that separates its two syllables, "pro" and "cat". It is much less likely that the PROCAT mark would be read and pronounced as a single word such as to rhyme with, or have the same syllabic emphasis as, the words "pocket" or "rocket". In my view, this would be the case whether the mark is depicted with the lettering of the two syllables "pro" and "cat" depicted with different colour and shading or the use of an upper case "p" and "c" (such as in respect of the football boots and bags offered in the USA and Canada the subject of evidence), or whether the mark is depicted with all lettering in the same colour, shading and case. In so far as the mark is depicted with different styles of lettering of the two syllables "pro" and "cat", the reader is effectively directed to comprehend and pronounce the two syllables as two separate words. However, even if the mark is depicted with all lettering in the same colour, shading and case, the more natural pronunciation for an ordinary Australian consumer is the same. This is for two related reasons. First, pronounced so as to rhyme with "pocket" or "rocket", the word "procat" would have no apparent meaning and therefore would be read as an unfamiliar, made-up word. Second and conversely, pronounced as a combination of two words "pro" and "cat", the word "procat" takes on a straightforward meaning. The word "cat" is a simple, well-known word. The syllable "pro" is a commonly used word, abbreviation and syllable in Australian English. As an adjective, it has become a colloquially accepted abbreviation for the word professional. It is also commonly used in its original Latin meaning being "for" (the opposite of against). Thus, pronounced as a combination of two words "pro" and "cat", the word would have a familiar or identifiable meaning to ordinary Australian consumers, being a professional "cat" or being for or positive toward "cat".
84 Those paragraphs do not reveal any error. Each finding was open on the evidence. The analysis is logical, indeed compelling. It is also to be understood with how his Honour dealt with the invented word contentions of Puma. At PJ [39] his Honour reasoned that whilst the opposed mark is an invented word "it is an obvious feature of the mark that it incorporates the word 'cat' and an additional word 'pro'". In its ordinary and contextual meaning, as his Honour continued, pro is an abbreviation of the word "professional". We reject the submission of Puma, that consumers of ordinary intelligence and memory would not understand the abbreviation in accordance with that ordinary meaning, as linguistically strained and improbable.
85 The submission of Puma that the primary judge limited his consideration of trade context to a single paragraph at PJ [110] as founding his conclusion that it is likely consumers would associate "cat" in PROCAT with Caterpillar and or its goods ignores the considerable analysis which precedes it. The finding sought to be impugned is:
Third, the relevant trade context concerns a wide range of apparel, footwear, bags and accessories sold in retail stores and online in the work wear and lifestyle market segments. The evidence showed, and it is a matter of common experience, that goods in those categories generally have very similar styles across brands. In the case of clothes, there is very little difference in style across brands with respect to shirts, T-shirts, trousers, sporting jumpers or sweatshirts etc. In the case of footwear, there is very little difference in style across brands with respect to work boots, sneakers and other casual shoes. In the case of bags, there is very little difference in style across brands with respect to soft carry bags (duffel bags) or backpacks. The goods are common, everyday purchases which, individually, are modestly priced. The evidence showed that there was overlap in the retail channels used by Puma and Caterpillar, and there is no reason to think that the retail channels would be separate.
86 That finding must be read with each of the following findings of fact:
(1) That in Australia, Puma sells its products through its own retail stores and through third-party retailers in addition to its online presence through its website and websites of various retailers: PJ [30];
(2) The business of Puma has traditionally been based upon athletic and sports footwear and apparel and sports accessories. Over time, Puma has expanded its range of products particularly to casual fashion and lifestyle products. The range of casual products is sports-inspired which has permitted Puma to develop products in areas outside of the products sold through partners and specialised suppliers: PJ [35];
(3) Puma has entered into co-branding arrangements with other companies that are commercially important to its business and those arrangements have increased over recent years. As an example, co-branding arrangements exist with Warner Bros: PJ [36];
(4) As at the priority date, the CAT branded "soft goods" such as apparel, footwear and bags have been sold in Australia by Caterpillar's authorised retailers as well as licensees: PJ [60];
(5) Since 1984, Wolverine has been Caterpillar's Australian (and global) footwear licensee through which footwear is offered for sale to retailers comprising work boots and lifestyle shoes: PJ [61];
(6) Since 2006 Caterpillar has licensed the sale of its Australian and global apparel and accessories business branded as Caterpillar and CAT which includes T-shirts, woven shirts, sweatshirts, vests, jackets and a wide variety of outerwear: PJ [62];
(7) Since 2011 and as at the priority date, branded goods have been distributed to retailers in Australia comprising such well-known brands as Athletes Foot and Merrell: PJ [63];
(8) CAT branded goods have been available from approximately 1000 retailers across Australia including such well-known retailers as Myer and David Jones: PJ [64]; and
(9) Caterpillar owns the domain names for each of the CAT retail websites but allows licensees to manage those websites: PJ [65].
87 At PJ [85], the primary judge accepted evidence from a witness called by Caterpillar that in the footwear and apparel markets in which CAT branded products are sold, Puma is a competitor of Caterpillar.
88 This summary demonstrates that the primary judge did not, contrary to the submission of Puma, confine his analysis of trade context to the findings at PJ [110]. It is elementary that the reasons must be read as a whole. Puma does not submit that each of those findings were not open on the evidence. Whether other findings may have been open to his Honour is not to the point: Puma has not in our view demonstrated error in the trade context findings of fact that were made by the primary judge.
89 For these reasons, we reject the analogy sought to be drawn with the judgment of Perram J in Aldi at [49]. What his Honour was concerned with is the middle ground which often presents on appeals by way of rehearing between errors of law where an "an appellate court is not influenced in its view of the law by the conclusions of the trial judge": [45] and findings of fact that turn upon the credibility of witnesses: [46]. His Honour at [47] then turned to the "grey area in which the amount of deference shown to a trial judge's conclusions is a function of the relative advantage enjoyed by the trial judge over the appellate court", which occurs when the issue is what is the proper inference to be drawn from facts which are either undisputed or established by findings of the primary judge which are not impugned. We previously quoted from [49] of Perram J's reasons in which he referred to the situation in which the primary judge may have taken a false step on the way to reaching a final conclusion (eg. taking into account an irrelevant consideration).
90 Perram J's reasoning in Aldi does not assist the applicant's arguments. There is no "false step" in the reasoning of the primary judge. For the reasons we have explained, the primary judge, having correctly identified the relevant legal principles, applied each to the facts found and in doing so did not overlook a relevant matter. Nor did he, take into account an irrelevant matter in his assessment of the trade context and each of the circumstances relevant to the assessment of the hypothetical consumer.
91 An additional submission that Puma makes is that the primary judge erred by failing to consider (or perhaps more elegantly expressed by failing to find) that the hypothetical consumers would understand that "cat" had other meanings and uses apart from the CAT marks and that Puma with its leaping cat device is well-known in the marketplace. This submission was developed as the "Chifley" point by reference to MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236, Burchett, Sackville and Lehane JJ (Chifley). That was an infringement proceeding by MID as the owner of an office tower known as "The Chifley Tower" and the proprietor of three registered trade marks each including the words "Chifley Tower." The respondents were in the business of managing various hotels, some of which were intended to be operated by incorporating the Chifley name, such as "Chifley on the Wharf" at Woolloomooloo in Sydney. The primary judge, Hill J, dismissed the proceeding and the Full Court dismissed the appeal to it. The appeal was primarily concerned with the question whether the respondents were providing services, or services of the same description, in respect of which the trade marks were registered. The Full Court held that the conduct of an hotel business cannot ordinarily be described as property management services within a class 36 - the leasing of office and retail space and building and property management.
92 The Court also considered the question of deceptive similarity and concluded that the proposed branding of the respondents was not deceptively similar to the registered marks. In a passage emphasised by senior counsel for the applicant at 246 the Court said:
In this case, the character of the mark includes, we think, two significant elements. One is that "Chifley" is familiar not only as the name of a former Prime Minister but, as the evidence shows, also from its use in a number of geographic and other contexts. There are suburbs, districts or places known as "Chifley" in the Sydney Metropolitan area (such as Chifley Square itself), in Canberra and in Bathurst; Bathurst, particularly, was Ben Chifley's home town and there are a number of places there which are named after him. There is (as has been seen) a Chifley Arcade in Sydney; there is a well-known restaurant called "The Chifley" in Canberra. The ordinary person whose reaction is in question need not be credited with an encyclopaedic knowledge of everything to which the name "Chifley" has been applied, but should be credited with a general knowledge that there are several such applications.
93 In oral submissions, counsel developed his submission commencing with the proposition that PROCAT is an invented word. From that step, according to the argument, the word "cat" does not solely reside in Caterpillar in the market place, Puma has been in the market place for decades with its well-known leaping cat device and that in the consideration of the surrounding circumstances it cannot be assumed that the consumer is unaware that the word "cat" is not exclusive to Caterpillar. Counsel was careful to emphasise that this submission did not invite this Court to stray into the territory of reputation in considering deceptive similarity under s 44 of the Act. Rather, the more nuanced point developed in oral submissions focused upon the reasoning of the primary judge at PJ [111]:
In that trading context, in my view there is a real and tangible risk that a significant number of consumers, who were familiar with but had an imperfect recollection of the CAT mark, would be confused as to whether goods labelled with the PROCAT mark were connected in the course of trade with CAT branded goods, as being a "professional" or high performance or otherwise special line of CAT goods. There is a real and not remote risk that the use of the word "pro" in conjunction with the word "cat" in the PROCAT mark, when used on apparel, footwear, bags and accessories, would convey to many consumers that goods branded with the PROCAT mark are professional or high performance goods which are made or endorsed by, or otherwise associated with, Caterpillar. As such, consumers would be caused to wonder whether there is commercial connection between PROCAT branded goods and Caterpillar.
94 The error attributed to the primary judge, as developed in oral submissions, is that his Honour employed an overly broad approach to likelihood of confusion which failed to take account of Puma's reputation in the leaping cat device in order to found the conclusion that there is a real and not remote risk that consumers would associate the PROCAT mark with goods made, endorsed by or otherwise associated with Caterpillar.
95 In our view, whilst the primary judge found at PJ[31] that the Puma leaping cat device is a well-known trade mark, that does not assist the argument that consumers of the relevant products should be imputed with some degree of knowledge that the word "cat" is not exclusive to Caterpillar and its goods with the consequence that there is no real risk that they would be left in doubt or have cause to wonder whether goods labelled with the PROCAT mark were connected with Caterpillar and its goods. The primary judge correctly summarised the principles to be applied commencing at PJ [90] and concluding at [96] including (with our ellipsis and the omission of selected citations):
90 First, the relevant comparison is between the marks themselves. The comparison assumes a normal and fair use of the application trade mark for all goods or services covered by the application…. A wider inquiry concerning the reputation of the marks, of the kind that might be undertaken in a passing off action or a proceeding in which misleading and deceptive conduct is alleged, is not appropriate… Similarly, the idiosyncratic manner in which the alleged infringer uses the mark (for example, with disclaimers or additions to the mark) is not relevant…. However, in assessing the likelihood of deception or confusion, it is relevant to consider the relevant trade or business, the way in which the particular goods or services are sold and the character of the probable acquirers of the goods or services… As stated by Dodds-Streeton J in Tivo Inc. v Vivo International Corp Pty Ltd [2012] FCA 252 (Tivo) at [172]):
The marks should not be considered in isolation. The setting and surrounding circumstances of the comparison are relevant and include how and where the product will be sold, advertised, displayed and promoted, how knowledge of the mark may be conveyed to consumers and how consumers are likely to approach a purchase.
91 Second, the test is not a "side-by-side" comparison of the marks. Deceptive similarity is to be assessed by reference to persons who do not have an opportunity to compare the respective marks side-by-side……As stated by Windeyer J in Shell (at 415):
On the question of deceptive similarity, a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore, the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's [mark].
92 Third, while the deception or confusion must result from the similarity in the marks, the likelihood of deception or confusion is to be judged not by the degree of similarity alone but by the effect of the similarity in the circumstances: Shell at 416, per Windeyer J. Confusion may arise from two word marks in a number of ways. The confusion might arise because of the textual similarity of the words, or because of the phonetic similarity of the words when pronounced, or there may be conceptual confusion where consumers might think that the product bearing the impugned mark is a variant of, or related to, an existing brand… In Australian Woollen Mills, Dixon and McTiernan JJ explained (at 658):
...the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express-their desire to have the goods, then similarities both of sound and of meaning may play an important part.
96 What is clear from those principles is that the hypothetical inquiry, by reference to all of the surrounding circumstances, is necessarily an artificial one as explained by this Court in Chifley at 245:
It is true, in infringement proceedings, that the question to be asked is in one respect at least somewhat artificial: the person who may be caused to wonder is not one who knows of the actual business of the proprietor of the registered mark, the goods it produces or the services it provides, but one who is to be credited with a recollection of the mark in relation to the full range of goods or services to which the registration extends. That degree of artificiality can be justified on the ground that it is necessary in order to provide protection to the proprietor's statutory monopoly to its full extent.
97 It hardly needs to be said that the circumstances considered in Chifley are very different to the present. "Chifley", as the passage emphasised by counsel for the applicant makes clear, is a word that conveys many meanings including the surname of a former Prime Minister and various geographic locations. It is the character of the mark itself which conveyed those meanings. The decision does not support the submission put in this appeal that the primary judge, when considering the hypothetical consumer with knowledge of Puma and its leaping cat device and familiarity with, but imperfect recollection of the CAT marks, erred in his conclusion at PJ [111] that there is a real and tangible risk of confusion.
98 In our view it was open to his Honour, in undertaking the evaluative assessment required, to conclude that consumers would be caused to wonder whether there is a commercial association between PROCAT branded goods and those of Caterpillar even with a knowledge of Puma and its leaping cat device. It may be that some consumers would not be confused, but that is not to the point. His Honour was concerned with the impression of a significant number of hypothetical consumers.
99 His Honour's conclusion is not undermined by the fact that there are differences, described by senior counsel for the applicant as significant, between the CAT device mark and the PROCAT mark in case and font. The primary judge was careful to set out the form of each device mark in his reasons at [1], [6], [42] and [54] and the applicant does not contend that his Honour overlooked these matters in reaching his ultimate conclusion of deceptive similarity at PJ [111], which must be read with the analysis which commences at PJ [107].
100 Whilst reasonable minds might differ upon the outcome of the hypothetical inquiry, we are not satisfied that the assessment of the primary judge was infected by any material error of fact or law.
101 For these reasons there is no merit in proposed grounds 2(a), 2(b)(i)-(v), 2(d)-(e) or 3.