Sports Break Travel Pty Limited v P & O Holidays Limited

Federal Court of Australia|2000-07-07|Before: Burchett J

REASONS FOR JUDGMENT 1 The applicant has sued the respondent for infringement of the trade mark "SCHOOLIES" which is registered, relevantly, in respect of transport and travel services in class 39 (which includes "[t]ransport" and "travel arrangement") from 11 August 1992, and in respect of advertising services in class 35 from the same date. The infringement alleged arises out of the publication, in August or September 1995, of the respondent's brochure for its cruises in 1996/97; the distribution to travel agents of a cover sheet that accompanied bundles of the brochures; and the publication of an advertisement in the form of an article in an industry magazine called Travelnews issued in August 1995. The respondent denies that its use of the word "Schoolies" in these documents was a trade mark use, so as to infringe the applicant's mark. Furthermore, the respondent cross-claims for expunction of the mark on various grounds, including that it was not as at 11 August 1992 or thereafter capable of distinguishing the applicant's services, and that the use of the mark is likely to deceive or cause confusion. 2 The brochure complained of is a publication in the form of a magazine of forty-three pages, in bright colours and lavishly illustrated. On the cover is a picture of the cruise ship Fairstar, seen in an ideal tropical setting, and surmounted by the title - "P&O Fairstar

1996/97 - " Immediately inside the cover is a fold-out section, in which thirty five cruises are listed, each being given an individual name, printed above a small map of the planned voyage. The first cruise is named "NEW ZEALAND EXPLORER", the map of which shows a cruise circumnavigating New Zealand. Other cruises, among Pacific islands, have more fanciful names, such as "SOUTH SEA FANTASY" and "PARADISE FOUND". While some titles are evocative rather than descriptive, others plainly indicate what the cruise is, such as "WEEKEND ESCAPE" and "WEEKEND GETAWAY", each lasting only three nights, and "MELBOURNE CUP WINNER", being a cruise from Sydney to Melbourne and back at the appropriate time of the year. Another cruise tied to a specific event, and the period when it occurs, is "EASTER WONDERLAND", promoted in the brochure as "the perfect family holiday". In this list, appears cruise number 59, entitled "PACIFIC PARTY", a cruise of four nights from 4 December 1996, and cruise number 60, entitled "SCHOOLIES CRUISE", a cruise of nine nights starting 8 December 1996. After several pages extolling the delights offered by cruises on the Fairstar, the brochure turns to details of each of the listed cruises. "PACIFIC PARTY" is described as: "A special new short cruise for those who've just finished their exams. Four nights to party. Three days to catch the rays. …." "SCHOOLIES CRUISE" is described as: "Fairstar's famous Schoolies cruise. There's nothing like it on this planet. A nine night full-on celebration with eight sunny days in between. …" The respondent's name and head office address and telephone number are endorsed on the brochure, as well as the title "P&O Fairstar" on both the front and the back cover. 3 On the cover sheet intended to accompany bundles of the brochure, the front cover of the brochure is repeated, and the sheet prominently proclaims: "The 1996/97 Fairstar cruise brochure is out now!" The sheet folds over, and on what is the inside of the fold, travel agents are advised, as they are on the back of the folded sheet, to "make sure you have your brochure racks stocked up". The advice is accompanied by a summary statement of available cruises in 1996, as follows:

"* 35 P&O Fairstar cruises in 1996.

2 Fiji Fly cruises.
Coral Sea cruise 'Turning Around' in Cairns.
Australian Coastal cruise - Cairns to Sydney.
New Zealand cruise.
Melbourne Cup cruise.
2 'Schoolies' cruises - 4 and 9 night.
'Shorter' school holiday cruises.
10 night Christmas cruise.
13 night New Year cruise." After a reference to discounts appears the statement "25% discount on all cruises, excluding 'Schoolies' (4 & 9 night), New Year and Weekend cruises". 4 The publication Travelnews, which claims a circulation in Australia and New Zealand of 7,255, shows the month and year of issue as "August 1995". It is apparently designed for distribution to travel agents. This issue makes a reference to "P&O Holidays" and "Fairstar" on its front cover, and at page 12 there is a picture of the cover of the impugned brochure, a stylised representation of the Fairstar, and some information about the Fairstar's 1996 "program". This includes a reference to "2 Schoolies Cruises (4 and 9 nights)". That reference forms part of a list of cruises described by varying titles: "2 Fiji Fly Cruises", "Coral Sea Cruise, 'turning around' in Cairns", "Australian Coastal Cruise from Cairns to Sydney", "New Zealand Cruise", "3 Weekend Escape Cruises" (in the list, the schoolies cruises come next), "'Shorter' School Holiday Cruises", "10 night Christmas Cruise" and "13 night New Year Cruise". It is to be observed that this context is wholly descriptive. On the next page, there is a reference to available concessions, including the statement: "New 25% discount on all cruises excluding 'Schoolies' (4 & 9 night) and New Year & Weekend Cruises. 15% discount 'Schoolies' (4 & 9 night) and New Year & Weekend Cruises." 5 Mr A.K. Smith, the Managing Director of the applicant, gave evidence of the development by it of a "Schoolies Week" holiday programme from about 1989. The programme had reached the point by 1995 where, for that year alone, the applicant had arranged bookings for some seven thousand students from Queensland, New South Wales and Victoria, and had printed about 120,000 brochures bearing the title "SCHOOLIES WEEK", which were distributed to schools and travel agents. From the beginning, brochures had been handed out with that title printed in various ways. Mr Smith described the applicant's business as that of -

"a travel agency, specialising in: (a) the placement of sporting groups on end of season trips; and (b) the 'Schoolies Week' holiday programme, involving the placement of end of Year 12 school leavers to, principally, the Gold Coast area of Queensland and on cruises and overseas trips for their holidays." 6 Mr Smith recounted how, in March 1990, a representative of the respondent proposed to him that he should promote a cruise on the Fairstar in his "Schoolies" brochure for 1990 and subsequent years. This was done, and in 1990 and 1991 small numbers of passengers were sold tickets by the applicant on cruises which it had promoted as "Schoolies" cruises, although the word "Schoolies" was not used as their name, or as part of their name, in any advertisement published in the brochure. In 1993, tickets marketed through the applicant's brochure rose to one hundred and twenty two, and the applicant had more enquiries than it could satisfy. As a result, the applicant sought special arrangements with the respondent; and it was agreed that to the 10% commission there would be added an additional 10% on the balance of 90%, i.e. making a total commission of 19%. The applicant claimed to have had a very successful year in 1994, achieving two hundred and eighty three bookings from school leavers. The interpretation of this evidence, however, requires an understanding of the fact that the Fairstar carried over one thousand passengers, and that bookings of this kind were subject to a very high rate of cancellation. 7 It is apparent that, by 1995, some stresses had developed in the relationship between the applicant and the respondent. According to Mr Smith, the applicant was very successful in selling tickets for the cruises it promoted as "Schoolies" cruises, but the respondent was concerned about the inroads made into bookings effected and commission earned by other agents, upon whom it depended during the rest of the year. The applicant claims to have booked two hundred and eighty four passengers for the 1995 year, but it cancelled a number of allotments it had obtained earlier. For 1996, the respondent was proposing two schoolies cruises, one of nine nights, and the other of four, but Mr Smith showed willingness only to promote the shorter cruise. Ultimately, the applicant did not promote either, and it is in this situation that the dispute has arisen concerning the respondent's use, for the first time, of the expression "Schoolies" in the material I have already summarised.

8 For the applicant, it was suggested in argument that the officers of the respondent, having foreknowledge, or at least a suspicion, that the applicant would no longer be marketing the relevant cruises as "Schoolies" cruises, endeavoured improperly to appropriate the applicant's name and goodwill. I should say at once that I reject this suggestion. I accept the evidence of Mrs Kimber, the Manager Marketing Planning of the respondent, that she personally was involved in the selection of the name "Schoolies", being a name by which the cruise at that time was already called in conversations between employees of the respondent, and that she did not then know anything about Mr Smith's objection to the promotion of one of the relevant cruises. In her view (the view of a marketer), to refer to Fairstar's "famous Schoolies cruise" was quite appropriate, and undoubtedly she wanted to take advantage, in the marketing of the forthcoming cruise, of Fairstar's fame in this particular respect. It was, of course, true that the applicant's promotion of previous cruises as "Schoolies" cruises had contributed to that "fame". Naturally, she wanted to retain any goodwill the respondent or Fairstar had built up through the past cruises marketed with the applicant's assistance as "Schoolies" cruises, though not so named by the respondent. But that does not mean, and I do not accept, that the choice of the name had about it any flavour of passing off. In fact, the applicant expressly confined its case, during the opening, to infringement of trade mark. 9 Since 1989, the applicant has distributed to final year school students documents or brochures referring to "SCHOOLIES WEEK". In 1989, for instance, a leaflet so headed referred to the applicant, under the name "Sports Break Travel", as presenting in conjunction with Greyhound Coaches and Seaworld Nara Resort (on the Gold Coast) an "END OF H.S.C. GOLD COAST HOLIDAY" arranged through a package including transport and accommodation. In 1990, a slightly longer brochure was also headed "SCHOOLIES WEEK". It bore the name "SPORTS BREAK TRAVEL", referred to accommodation in Bali as well as on the Gold Coast, and contained an advertisement for "FAIRSTAR CRUISES", particular reference being made to the "HIGHLIGHTS OF THE PACIFIC CRUISE" departing for nine nights on 23 November. There was a note: "Responsibility: Sport [sic] Break Pty Ltd acts only as an agent for passengers in the making of travel arrangements with carriers and hoteliers for tour programmes. All conditions and responsibilities of the relevant tour operators apply."

The 1992 "SCHOOLIES WEEK GOLD COAST" brochure also makes it clear that the applicant is a booking agent which "will arrange tickets, bookings and reservations in respect to any travel packages or special events only as agents for their clients". Inside the front cover, the brochure contains a message from the Mayor of the Gold Coast City Council welcoming "participants to 'Schoolies' Week 1992". The Mayor states: "The City Council and indeed the Gold Coast community generally, have played host to school leavers celebrating the end of their secondary education for many years." On the next page, the brochure continues, under the heading "SCHOOLIES WEEK 1992": " 'Schoolies Week' on the Gold Coast has become a tradition! At the end of the Higher School Certificate, tens of thousands of students flock to the Gold Coast to celebrate the end of school. As a result 'Schoolies Week' now goes on for a whole month. In the past, many students and parents and even teachers have experienced difficulties in organising accommodation and transport. This is due to a reluctance by apartment blocks and resorts to accept 'Schoolies' bookings. We've fixed the problem! … So …save yourself some time and money, organise your friends and give us a call to book your 'Schoolies Week' package now." In the margin, on a red background which stands out, is the statement: "Sports Break Travel is the central reservation office for Gold Coast apartments and hotels who accept school leavers. … Some of our staff are ex-schoolies who have travelled with us in past years."

Telephone numbers and an address for the applicant follow, with its name. Numerous advertisements also appear in the brochure for Gold Coast apartments and attractions, together with advertisements for Greyhound Coaches and an airline. There is too an advertisement for "FAIRSTAR SUPER SAVINGS", and particularly for two cruises on the Fairstar between 23 November and 15 December 1992 entitled "VIVA VILA CRUISE" and "GREAT ESCAPE CRUISE", with an invitation to book through the applicant. 10 In the particular year 1995, in which the respondent distributed its impugned brochure with its cover sheet, and also arranged for publication of the impugned advertisement, the applicant's brochure was again called "SCHOOLIES WEEK". There was added the capital letter R in a circle, suggesting to those who noticed it, and understood, that a registered trade mark was involved, although whether that mark was "SCHOOLIES" or "SCHOOLIES WEEK" or an elaborate drawing in which the latter title was involved, is not made entirely clear. To my eye, the "R" seems to embrace, most probably, both the words and the drawing. There is a message from the Mayor of the Gold Coast City Council similar to the one in the earlier issue, and there are messages from the Chief Executive of the Gold Coast Tourism Bureau and the Superintendent of the Queensland Police, both of which also contain the expression "Schoolies Week". The applicant repeats its claim to have solved a bookings problem, and then there is a statement "Schoolies Week was produced by Jan Murphy and Peter Sinner", a statement which appears to use the expression "Schoolies Week" simply as the title of the brochure. Inside, the brochure refers to "YOUR SCHOOLIES WEEK HOLIDAY", and states that "Sports Break Travel offers … [a] centralised booking office for 'Schoolies' accommodation on the Gold Coast", and, inter alia, "[g]uaranteed prices for accommodation and travel". Included among various advertisements is a full page devoted to "END OF SCHOOL CELEBRATION CRUISE" on "P & O FAIRSTAR" departing 9 December 1995, for which bookings are invited through the applicant. There is also an advertisement, illustrated by pictures, for an accommodation and airfares package for a holiday in Fiji flying Air Pacific, and there are other advertisements for travel by Greyhound Pioneer and Ansett Australia. Referring to some of the persons booking "Schoolies Week" holidays, the brochure uses the expression "Queensland Schoolies". A booking form, to be sent to the applicant, provides for specification of "DESTINATION" as "Gold Coast" or "Fairstar" or "Fiji". There is again a clear statement that the applicant "organises the travel arrangements as an agent, and not as a principal". The brochure concludes with an advertisement for a polaroid camera containing the appeal: "Capture your Schoolies Memories on Instant Party Film". 11 The evidence shows that on 29 June 1993 the respondent had written to the applicant under the heading "RE: GROUP SCHOOLIES CRUISE 94, O8/12/94". This was not, of course, the formal name of the cruise, but it did describe the nature of the group booking which was contemplated. Similarly, the applicant itself in a letter dated 28 August 1997, written to the operator of a river cruise under the name "Surfers By Night", although heading its letter "re SCHOOLIESTM 1997", wrote: "[W]e look forward to working with you to promote your cruises to the Schoolies market", and referred to "the Schoolies period in November and December". That the letter also claimed the word as a trade mark does not deny the clearly descriptive use involved in these expressions. 12 The evidence makes it quite clear that the expression "Schoolies Week" and the word "schoolies" were firmly established in colloquial usage, in the senses relevant to this case, at least by early in the decade commencing in 1981. The word "schoolie", of course, was well known in Australian usage long before then to express two different meanings: it could refer to a school prawn, or it could be a somewhat offhand, or even slightly derogatory, term for a schoolteacher. The meanings relevant to this case are much more recent, and seem to have originated in connection with the Gold Coast, and in Queensland. The present use of the word "schoolie" is, perhaps, best indicated by the Australian Oxford Dictionary (1999): "Aust. colloq. 1 a schoolteacher. 2 a secondary school student, especially one who has just completed year 12. 3 a school prawn. ‹ schoolies' week colloq. a period of post-exam celebrations for year twelve students, especially on the Gold Coast, Queensland." Similar definitions are to be found in the third edition of the Macquarie Dictionary (1997), but not in the second edition (1991), nor in the first edition. See also A Dictionary of Australian Colloquialisms by G.A. Wilkes, fourth edition (1996). 13 Extracts from three newspapers, the Telegraph, Sunday Mail and Courier Mail, for various periods, were put into evidence. An examination of these shows that, during the three years 1984, 1985 and 1986, without counting repetitions in the same sense in the same article, the word "schoolie" was used fifteen times in either the meaning of a school student or the meaning of a school leaver celebrating the completion of examinations, and "schoolies week" was used twenty-six times in reference to the period of celebration on the Gold Coast at the end of the final year of school. Late in 1991, a popular Sydney radio programme was broadcast, with much publicity, from the Gold Coast during Schoolies Week, celebrating school leavers being referred to as "schoolies". I am satisfied that, particularly because of the notoriety of Schoolies' Week activities, that expression and the word "schoolies", in the sense in which it is used in the expression, were well known and understood in Australia , especially among the young, before 1992. At the beginning of that year, Mr Smith, as an agent who wanted to be understood when making a "sales pitch", felt able to refer, in a passage I have quoted from his 1992 "SCHOOLIES WEEK GOLD COAST" brochure, to past difficulties of schoolies with bookings, and to "ex-schoolies". "Schoolies" was the appropriate word to express his meaning, and as for "Schoolies Week", it had "become a tradition!". 14 Infringement of a registered trade mark occurs when a person "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" (Trade Marks Act 1995, s 120(1)). Infringement also occurs when a person "uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to … services of the same description as that of services … in respect of which the trade mark is registered" (s 120(2)(c)). But the use of a word constituting a trade mark will not amount to an infringement unless the word is used as a trade mark: The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407 at 423-425; Edward Young & Co Ld v Grierson Oldham & Co Ld (1924) 41 RPC 548 at 579; Johnson & Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited (1991) 30 FCR 326; Musidor BV v Tansing (1994) 52 FCR 363; Top Heavy Pty Ltd v Killin (1996) 34 IPR 282 at 285-287; Koninklijke Philips Electronics NV v Remington Products Australia Pty Limited [2000] FCA 876. Use as a trade mark is use "for the purpose of indicating, or so as to indicate, a connexion in the course of trade" between the product or service and the person using the mark: The Shell Company of Australia Ltd at 424-425. In assessing whether a particular use is of that kind, the court examines the purpose and nature of the use, being guided as an all-important consideration by its context: The Shell Company of Australia Ltd at 422; Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Limited at 342, 347, 351; Musidor BV v Tansing at 376-377; Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd at para 19. When the context is examined, some indication that the use of a word constituting a trade mark is not a trade mark use may be provided by the fact that a mark of the respondent has been used "in a way that a mark would be used for [services] of this type": Musidor BV v Tansing at 376; Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd at para 19. Although, in this case, I am satisfied that the officers of the respondent through whom it acted did not have a subjective purpose of using the word "schoolies" as a trade mark, the examination which is to be made of the purpose and nature of its use of that word is objective. The question is what purpose was conveyed by the use of the trade mark in the context in which it was used. In The Shell Company of Australia Ltd at 425, Kitto J asks whether a trade mark purpose "would have appeared to the television viewer". In Wrigley's (Australasia) Limited v Life Savers (Australasia) Limited (1936) 37 S.R. (N.S.W.) 9 at 16, Nicholas J tested an alleged infringement of trade mark by what a "member of the public could be expected" to understand. The same view was accepted in Pepsico Australia Pty Ltd v Kettle Chip Company Pty Ltd (1996) 33 IPR 161 at 182, 187. 15 With these propositions in mind, I turn to the three documents of which complaint is made. The pages in Travelnews may be quickly disposed of. As I have already remarked, the context in which the expression "2 Schoolies Cruises" appears is wholly descriptive. Embedded in a list of cruises described by general characteristics, such as the specific area to be visited and the time of the year or the occasion when the cruise is to take place, I cannot think that anyone would read the reference to "Schoolies Cruises" as signifying anything other than either or both of two things: the target group from which passengers are expected to be drawn, and the occasion at the end of a school year which is expected to give rise to their cruising. There is nothing in the context to suggest that the purpose and nature of the use of the relevant expression is to distinguish the service by reference to its commercial origin. Moreover, the material published prominently displays the respondent's identity by a different means, that is to say, by a number of references to the Fairstar, and by further references to "P & O". 16 The cover sheet sent to travel agents with bundles of the brochure also is very plainly, even strikingly, labelled "P & O Fairstar", the dot on the "i" of Fairstar being represented by a five pointed star. The name, shown as "P & O (Holidays)", and telephone and fax number of the respondent are also very clearly marked. The references to "2 'Schoolies' cruises - 4 and 9 night" and " 'Schoolies' (4 & 9 night)" appear in the context, again, of a list of some of the "35 P&O Fairstar cruises in 1996". The other cruises listed all have names which describe them either by reference to the location or the occasion of the cruise, as for example, "New Zealand cruise", "Melbourne Cup cruise" and " 'Shorter' school holiday cruises". There is a second reference to "Schoolies" which associates the cruise so referred to with the "New Year" and "Weekend" cruises. The same conclusion follows. These are simply not trade mark uses of the word "Schoolies". If the context is all-important, it points only away from the suggestion that the respondent was making a trade mark use of the word. 17 In the brochure, all thirty-five cruises for the cruising season in question are listed. Only one of them is actually named "SCHOOLIES CRUISE"; the other so referred to in the cover sheet is actually named "PACIFIC PARTY", a fact which in itself reinforces the conclusion that the reference to this cruise, in Travelnews and in the cover sheet, as a schoolies cruise is descriptive of the group to which the cruise is expected to appeal, namely, celebrating schoolies. In the context of so many cruises, as I have already pointed out, some of the names are rather fanciful, but a number of them are certainly descriptive of the occasion calling for the particular cruise, making reference to the Melbourne Cup, Christmas, New Year or Easter. Others refer to the location of the cruise. The brochure, as I have noted, gives, in a separate section, details of the "SCHOOLIES CRUISE", which include the comment: "Fairstar's famous Schoolies cruise". The printing of the expression "Schoolies cruise" in this comment contrasts with the title of the cruise, which is printed, on both occasions when the cruise is named, and uniformly with the printing of the names of all the other cruises, in block letters. This is consistent with the words "Schoolies cruise" being descriptive of the cruise the commercial origin of which is indicated by the reference to the Fairstar. Some of the applicant's submissions appeared to be directed to the proposition that the description of the cruise as "famous" was indicative of an intention to attract goodwill. But the goodwill sought was plainly the goodwill attaching to the Fairstar by reason of the previous cruises for which a measure of fame (no doubt by hyperbole) was claimed. This is not the sort of thing that assists an allegation of infringement of trade mark: cf the remarks of Gummow and Heerey JJ in Musidor BV v Tansing at 375, which are cited in Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd at para 18. 18 I have reached the conclusion that none of the uses of the word "SCHOOLIES" was a trade mark use.

19 I turn to the first cross-claim, and to the respondent's contention that the Register should be rectified by the cancellation of the mark "SCHOOLIES" on the ground specified in s 88(2)(a), i.e. a ground on which the registration of the trade mark could have been opposed under Division 2 of Part V. The ground in question (made available by s 57) is the ground contained in s 41(2) that "the trade mark is not capable of distinguishing the applicant's … services in respect of which the trade mark is sought to be registered (designated … services) from the … services of other persons". As the mark was registered in Part A of the Register under the Trade Marks Act 1955 before 1 January 1996, it is, by s 233 of the Trade Marks Act 1995, a registered trade mark for the purposes of the later Act. 20 It is convenient to set out, at this point, the provisions of s 41, omitting notes: "41 Trade mark not distinguishing applicant's goods or services (1) For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the 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." Although I have omitted the notes in reproducing this section, I draw attention to Note 1 to sub-section 6. This note points out that "[t]rade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate … the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or … the time of production of goods or of the rendering of services."

21 Whether a mark "is inherently adapted to distinguish the designated goods or services from the goods or services of other persons" has traditionally been determined in Australia by reference to the authoritative statement of Kitto J in Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 at 514, itself based on long standing authority. Kitto J made clear "that 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." The principle is as applicable to services as it is to goods. It has recently been referred to in the decision of the Full Court in Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd at para 13 and is in accord with the remarks of Hoffmann J (as he then was) in Unilever Ltd.'s (Striped Toothpaste No. 2) Trade Marks [1987] RPC 13 at 19-20. See also Powell v Glow Zone Products Pty Ltd (1997) 150 ALR 411 at 421-423; Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50 at 55; Eclipse Sleep Products Incorporated v The Registrar of Trade Marks (1957) 99 CLR 300 at 310, 322; Samuel Taylor Proprietary Limited v The Registrar of Trade Marks (1959) 102 CLR 650 at 659-660; Oxford University Press v Registrar of Trade Marks (1990) 17 IPR 509 at 512, 517, 524-525, 532. 22 Having regard to the clear meaning which the word "schoolies" had acquired by 1992, I conclude that it was not to any extent inherently adapted to distinguish the services of the applicant from the services of other persons. It made a direct reference to a characteristic of the services which determined their nature: they were services to be provided for a distinct group of persons answering the description schoolies. It is as if registration were sought for a mark consisting of the words "university students" in relation to corresponding services to be provided to persons falling within that description. Plainly, honest traders, making appropriate use of the English language, might desire to describe services offered by them to celebrating school leavers as services for schoolies. The very name of the market should not be the unique preserve of one trader. 23 Subsection (6) of s 41 poses the further question whether the applicant has "establishe[d] that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it [did] distinguish the designated … services as being those of the applicant", although the drafting is somewhat ambiguous, having regard to subs (4). I do not need to consider the drafting problem because I have come to a clear conclusion that subs (6) cannot avail the applicant. The proposition it would have to establish has been described as "entirely one of fact" (Blount v Registrar of Trade Marks at 60). Nevertheless, the question of fact can only be correctly answered if it is first correctly posed, and that involves the question of law represented by the true construction of the statutory language. As was pointed out in Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd at para 13, the construction of s 41(6)(a) requires an understanding of the expression "it does distinguish". Behind that question, in the context of trade mark law, lies a wealth of learning and a vast commercial experience. In Samuel Taylor Proprietary Limited v The Registrar of Trade Marks at 659-660, McTiernan, Taylor and Windeyer JJ considered the proposition that "[t]he question whether a word is or is not capable of becoming distinctive … is a question of fact and is not determined by its being or not being descriptive"; their Honours responded to this by quoting the observations of Viscount Simonds in Yorkshire Copper Works Ltd.'s Application for a Trade Mark (1953)71 RPC 150 at 154: "the more apt the wordis to describe the goods of a manufacturer, the less apt it is to distinguish them". However much a mark may be used, I do not think it can distinguish goods or services in the relevant sense if all that it does is describe them at a time when there are no identifiable goods or services from which they are to be distinguished. On the other hand, a descriptive word may be so used that it acquires a special meaning distinguishing goods or services with reference to which it is used: Oxford University Press v Registrar of Trade Marks at 519, 521, a case decided under the Trade Marks Act 1955. See also the passing off cases B.M. Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 51 ALJR 254 at 257-258 and LSK Microwave Advance Technology Pty Ltd v Rylead Pty Ltd (1989) 16 IPR 107 at 113-115, which have greater relevance to trade marks since the enactment of the Trade Marks Act 1995.

24 In the present case, the trade mark did not distinguish the relevant services in 1992, because it was no more than a descriptive word applicable to the kind of services supplied by the applicant and the applicant did not make any such use of it as could, in any case, have enabled it to distinguish the applicant's services. It was, as I have pointed out, used by the applicant for its meaning as a word. The title of the applicant's brochure was "SCHOOLIES WEEK", not "SCHOOLIES". In the applicant's own usage, the word "schoolies" generally referred to persons, not to its services. To the extent the applicant made other uses of the word, they were insufficient to support a finding in its favour under s 41(6)(a). Not only does the brochure repeatedly use "SCHOOLIES" of persons and "SCHOOLIES WEEK" of an event, it also makes very clear that the services advertised in it do not have a commercial origin identified by either expression or with the applicant: the applicant is merely an agent for the booking of those services, which are rendered by principals including Air Pacific, Ansett Australia, Greyhound Pioneer, various hotels in Bali and Fiji, and the respondent. The applicant relied on evidence that it had called (but not in writing in the advertisements in its brochure) particular cruises by the name Schoolies. But it was well known that these cruises were on the Fairstar, and were operated by the organisation to which the Fairstar belonged, that is, P & O Holidays Limited. In the context, no one would have understood the word "Schoolies" as a trade mark identifying the supplier of services; in the context - which, as Kitto J said in The Shell Company of Australia Ltd at 422, is all-important - it was rather a descriptive word, indicating that a particular cruise would cater for schoolies. I cannot find that because of the extent to which the applicant used the trade mark before the filing date, that mark did distinguish the designated services as being those of the applicant: cf. Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177 at para 40. Accordingly, I have reached the conclusion that the first ground of the cross-claim is made out. It is unnecessary to consider the other grounds.

25 The only order that I make at this stage is to direct the respondent to bring in, on a date to be fixed, short minutes of orders appropriate to reflect these reasons. The applicant must pay the respondent's costs of the action and the cross-claim. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Burchett.

Associate: Dated: 7 July 2000 Counsel for the Applicant: Mr A.J.L. Bannon SC and Mr D. Kell

Solicitors for the Respondent: Ebsworth & Ebsworth

Dates of Hearing: 1 June, 5-7 July, 13 September 1999

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