Re Fender Australia Pty Limited v Charles Dragomir Bevk

Re Fender Australia Pty Limited v Charles Dragomir Bevk - [1989] FCA 276 - FCA 1989 case summary — Zoe

[32]

15. It has always been accepted that trade marks legislation was "not to give new rights, but to regulate the use of, and the means of protecting, trade marks." (See James Minifie and Company v. Edwin Davey and Sons [1933] HCA 17; (1933) 49 CLR 349 at 363 per McTiernan J. quoting Cotton LJ., and at 361, per Dixon J. whose judgment was cited, as to this point, by Smithers J. in Atari Inc. and Futuretronics Australia Pty Ltd v. Fairstar Electronics Pty Ltd [1983] FCA 2; (1982) 50 ALR 274 at 276-277. See too Champagne Heidsieck et Cie Monopole Societe Anonyme v. Buxton (1930) 1 Ch 330 at 341 and G.E. Trade Mark (1973) RPC 297 at 327 (also reported as General Electric Co. (of USA) v. General Electric Co. Ltd (1972) 1 WLR 729 at 743-744); but see New South Wales Dairy Corporation v. Murray-Goulburn Co-operative Company Limited (Gummow J., unreported, 3 April 1989) at 46-47, where some qualifications of the received understanding are stated.) To read the statute's control as stopping at the shore where goods are launched from commerce into use would be in accord with the principles which pre-date legislative intervention in the area of trade marks. This is not just because when goods are bought for consumption they cease to be in the course of trade. It is also because of the fundamental nature of a trade mark, demonstrated by the history of its development in the law, as an aspect of the goodwill of a particular business. The goodwill of a business producing or marketing goods is connected with the sale of the goods it supplies, not with a market in what those goods will become after they have been used for some time. The goodwill with which the mark of Holden cars is connected is that of a business manufacturing and selling new cars. A business selling used cars may also have a goodwill, and a mark associated with it, but that goodwill is not to be confused with the goodwill of General Motors, however much the reputation of Holden cars may assist a particular sale. Generally, a second-hand business will deal in a number of different makes of goods, as indeed is the case here, where the evidence shows that Mr Bevk deals in a range of second-hand guitars bearing various marks.

[35]

18. There is remarkably little authority expressly on the question which I have been discussing. I think this is because no one has sought to curtail the ordinary commercial operations of second-hand dealers by reference to trade marks legislation. Doubtless, in the present case, the applicant was provoked by the admitted fact that the trade in used guitars was made a cloak for the evasion of whatever rights the applicant has in respect of new guitars. But there are cases which are relevant. In The General Electric Company Limited v. Pryce's Stores (1933) 50 RPC 232 Maugham J. (as he then was) dealt with an attempt to restrain the sale of second-hand electric lamps. It is apparent from the report that the real point of the case was the plaintiff's allegation that the second-hand lamps were sold as new lamps. Although the lamps were sold under their trade mark names, "Osram" and "Mazda", Maugham J. had no hesitation in dismissing the actions upon being satisfied that the lamps were sold as used lamps and not as new lamps. In the more recent case Rolls-Royce Motors Ltd v. Zanelli (1979) RPC 148, Browne-Wilkinson J. granted an interlocutory injunction to restrain the defendant from a proposed business of buying second-hand Rolls Royce Silver Shadow motor cars and converting their body work to make them look like four door versions of the more expensive Rolls Royce Corniche motor cars, which he proposed to sell under the name Rolls Royce Panache. The defendant's enterprising project would have produced a new product, deceptively modelled on a product of the plaintiff, which would have been sold under an impudently evocative variation of the plaintiff's trade mark. The judge's view that this would prima facie constitute an infringement, so as to attract the principles relating to the grant of an interlocutory injunction, is easy to understand. However, when the matter went on appeal, it was decided upon the principles of passing off, with some reference to breach of copyright in respect of drawings: see the report cited at 152-154. The Court of Appeal did not mention the trade marks question. For completeness, reference should also be made to Kerly, sec. 16-28, and the cases there noted, which it is unnecessary to discuss here.

[36]

19. A distinction could, of course, be drawn between second-hand goods purchased new from, or from a vendor supplied by, the registered proprietor of the mark in Australia, on the one hand, and on the other, second-hand goods purchased overseas, so as to have no flavour of original connexion with the Australian proprietor. But I do not think the Act contemplates such a distinction, which would be very inconvenient in practice. How would a second-hand dealer know whether he was infringing or not? In any case, even imported second-hand guitars are quite different goods from the new guitars distributed by the applicant under its trade mark. The sale of imported second-hand Fender guitars, together with other makes of second-hand guitars, is not deceptive and does not impinge on the goodwill to which the applicant's trade mark is related. Such a sale, to borrow the language of Smithers J. in the Atari and Futuretronics case (ubi supra), is "not 'using' the mark in the relevant sense". As Kitto J. said in The Shell Company of Australia Limited v. Esso Standard Oil (Australia) Limited [1963] HCA 66; (1963) 109 CLR 407 at 422: "it is implied both in s. 58(1) and in s. 62(1) that the use which is there referred to is limited to a use of a mark as a trade mark." A person who sells used goods, though by reference to a name they bore as a mark when sold new, does not by doing so represent that there is any connexion in trade between him and the manufacturer or original distributor of the goods, nor that any goods so marked are wearing his badge. (Cf. Shell case at 425.) Nor does he represent that there is any connexion in trade between the goods, in their character of used goods, and the registered proprietor of the mark. (Cf. the Champagne Heidsieck case, where Clauson J. said that "the exclusive right to use the mark conferred on the registered proprietor ... is the right to use the mark as a trade mark - i.e., as indicating that the goods upon which it is placed are his goods and to exclude others from selling under the mark wares which are not his.") It would be an unwarranted extension of the protection offered by the Trade Marks Act, and an undue restriction of the freedom of trade, to construe s. 62 as concerned with an importation and sale of used guitars.

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Judgment (66 paragraphs)

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Legislation Cited (16)

Cases Cited (14)

Re Fender Australia Pty Limited v Charles Dragomir Bevk (Trading As Guitar Crazy) and Craig Sullivan (Trading As St George Music Centre) [1989] FCA 276; 15 IPR 257 25 FCR 161 (26 July 1989)