Sports Warehouse, Inc v Fry Consulting Pty Ltd

Federal Court of Australia|2010-06-25|Before: Kenny J

16 Nissan Motor Co v Nissan Computer Corp 378 F3d 1002 (9th Cir. 2004) Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 Link Recruitment Pty Ltd v Employment and Training Inc (2006) 69 IPR 614 The Architects (Australia) Pty Ltd t/a Architects Australia ACN 010 362 937 v Witty Consultants Pty Ltd [2002] QSC 139 WD & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 1B IPR 51

The application constituting the appeal under s 56 of the Trade Marks Act 1995 (Cth) be dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

A. The proceeding 1 The parties to this proceeding are engaged in the online retailing of tennis-related products. Their dispute raises contemporary issues about the use of trade marks at a time when the use of home computers for private purposes has become widespread and includes the online purchasing of clothing, in this case for the game of tennis, as well as other items, as, in this case, equipment for playing tennis. 2 The proceeding is an appeal, pursuant to s 56 of the Trade Marks Act 1995 (Cth) ('the Act'), from a decision of a delegate of the Registrar of Trade Marks ('the delegate') on 17 March 2008. The delegate allowed an opposition by the respondent to the applicant's trade mark application 1070835 ('the trade mark application'). This was an application to register the word mark "TENNIS WAREHOUSE" in class 35 ('the trade mark') in respect of "online retail services featuring tennis clothing, tennis footwear, tennis gear, tennis equipment, tennis accessories, and tennis sport bags" ('the designated services'). 3 I would dismiss the application constituting the appeal for the reasons stated below. 4 Sports Warehouse, Inc ('Sports Warehouse') was incorporated in California in 1994. Since its incorporation, Sports Warehouse has conducted the business of retailing tennis apparel and tennis gear. Sales are predominately made via an online website. Sports Warehouse conducts its online retailing business through the internet domain name www.tennis-warehouse.com ('the tennis-warehouse domain name') from its website ('the tennis warehouse website'). Since 1995, Sports Warehouse has expanded its market to customers worldwide, including customers in Australia. 5 Sports Warehouse lodged the trade mark application for "TENNIS WAREHOUSE" pursuant to s 27 of the Act on 18 August 2005 ('the lodgement date'). On 28 September 2006, the trade mark application was advertised by the Registrar as accepted for registration, with an endorsement that s 41(5) of the Act applied. 6 The respondent, Fry Consulting Pty Ltd ('Fry Consulting'), is a wholesaler and retailer of tennis products. Fry Consulting sells its products to customers throughout Australia. Fry Consulting operates a store in a building in Fitzroy, an inner suburb of Melbourne, and a website located at www.tenniswarehouse.com.au. Through this website, Fry Consulting also engages in online retailing of tennis apparel and tennis gear. 7 Pursuant to s 52 of the Act, Fry Consulting filed a notice of opposition to the registration of the trade mark. The parties filed and served evidence in accordance with the Trade Mark Regulations 1995 (Cth) ('the Regulations'), and the delegate heard the matter on 5 March 2008.

B. Key legislative provisions 8 The key legislative provisions must be kept in mind in order to understand the issues in dispute. Section 27(1) of the Act provides that a person may apply for the registration of a trade mark in respect of goods or services if the person claims to be the owner of the trade mark and one of the circumstances in s 27(1)(b) applies. These circumstances include that the person is using or intends to use the trade mark in relation to the goods or services. Section 31 requires that, once an application has been made, the Registrar must examine and report on whether the application has been made in accordance with the Act and whether there are grounds for rejecting it. 9 After examination, the Registrar must, by reason of s 33, accept the application unless satisfied that it has not been made in accordance with the Act or that there are grounds for rejecting it under Division 2 of Part 4. The Registrar is required under s 34 to advertise the decision in the Official Journal. 10 The grounds for rejecting an application are provided for in Division 2 of Part 4 of the Act. Briefly stated, they are that the trade mark contains or consists of certain signs that are not to be used as a trade mark (s 39); cannot be represented graphically (s 40); does not distinguish the applicant's goods or services (s 41); is scandalous or its use is contrary to law (s 42); is likely to deceive or cause confusion (s 43); or is substantially identical with or deceptively similar to a registered trade mark (s 44). 11 Section 52(1) provides that, if the Registrar has accepted an application for the registration of a trade mark, any person may oppose the registration by filing a notice of opposition. Section 52(4) permits the registration to be opposed on any of the grounds specified in Division 2 of Part 5 but on no other grounds. Briefly stated, these grounds are the grounds upon which an application may be rejected (s 57); that the applicant is not the owner of the trade mark (s 58); that the applicant does not intend to use the trade mark (s 59); that the trade mark is similar to a trade mark that has acquired a reputation in Australia (s 60); that the trade mark contains or consists of a false geographical indication (s 61); that the application was amended contrary to the Act (s 62(a)); and that the Registrar accepted the application on the basis of false evidence or representations (s 62(b)). This appeal is concerned with the ground provided by s 41, by virtue of s 57 of the Act. 12 Under s 54(1) the Registrar must give the opponent and the applicant an opportunity of being heard on the opposition and, under s 55, the Registrar must decide either to refuse to register the trade mark or to register the trade mark, with or without conditions or limitations, in respect of the goods or services specified in the application, having regard to the extent, if any, to which any ground on which the application was opposed has been established. Under s 56 the applicant or the opponent may appeal to the Federal Court from the decision of the Registrar. 13 Since s 41 of the Act is central to this appeal, for convenience, I set out below the whole of that provision. Section 41 reads as follows: (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. Note 1:For applicant and predecessor in title see section 6. Note 2:If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8). (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. Note: For goods of a person and services of a person see section 6. (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. Note 1:For goods of a person and services of a person see section 6. Note 2:Use of trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8). (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. Note 1:Trade 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: (a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or (b) the time of production of goods or of the rendering of services, Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8). 14 In summary, s 41(2) requires the Registrar to reject an application where 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 from the goods or services of other persons". Whether or not the trade mark is "capable of distinguishing" the designated goods or services from the goods and services of other persons is to be determined by reference to subsections (3) to (6) of s 41. As Branson J said in Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50 ('Blount') at 56, these provisions are "designed to control the process by which the Registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant's goods or services". Further, to quote Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60 ('Chocolaterie Guylian') at 65 [9], this process involves the following steps: (a) The Registrar must first "take into account the extent to which the trade mark is inherently adapted to distinguish" the relevant goods [or services] from the goods [or services] of others: s 41(3); (b) If that consideration leads to a conclusion that the trade mark is capable of distinguishing the goods [or services] from those of others, then, so long as the Registrar is not satisfied that any other grounds for rejecting the [application for registration] exist, she must accept the [application for registration] . . . ; (c) However, if the Registrar is "unable to decide" whether the trade mark is capable of distinguishing the goods [or services] by the "inherently adapted" consideration alone, then either s 41(5) or s 41(6) applies: see s 41(4). Section 41(5) will apply if the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the … 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 … goods [or services]". By contrast, s 41(6) will apply if the Registrar finds that the trade mark "is not to any extent inherently adapted to distinguish". (d) If the Registrar finds the trade mark is to some extent inherently adapted (s 41(5)), the Registrar is then required to consider whether the trade mark "does or will distinguish the … goods [or services] as being those of the applicant", by taking into account the combined effect of the following three matters (s 41(5)(a)): · the extent to which the trade mark is inherently adapted to distinguish; · the use, or intended use, of the trade mark by the applicant; and · any other circumstances. (e) After taking those matters into account, the trade mark is "taken to be capable of distinguishing the applicant's goods [or services] from the goods [or services] of other persons" only if the Registrar is "satisfied" that the trade mark in fact does or will so distinguish the goods: s 41(5)(b). If the Registrar is not so satisfied, then the trade mark is taken not to be capable of distinguishing (see 41(5)(c)), a ground for rejecting the [application for registration] will thereby exist and the Registrar is then required to reject the [application for registration]…. (f) In the alternative scenario that the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish (s 41(6)), then the trade mark is taken not to be capable of distinguishing the goods [or services] unless the applicant "establishes" that, because of the extent to which the applicant has used the trade mark prior to the relevant filing date of the application, the trade mark does in fact distinguish the goods [or services] as being those of the applicant: s 41(6)(a) and (b). (Emphasis original.) 15 Section 17 defines a "trade mark" as "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" (emphasis added). That is, the trademark must "indicate the origin of the goods to which it is applied": see Aristoc Ltd v Rysta Ltd [1945] AC 68 at 96 (Lord Macmillan); The Coca-Cola Co v All-Fect Distributors Ltd (t/as Millers' Distributing Co) (1996) 47 IPR 481 at 489-490 [19] (Black CJ, Sundberg and Finkelstein JJ); E & J Gallo Winery v Lion Nathan Australia Pty Limited (2010) 265 ALR 645 ('E & J Gallo Winery') at 655-6 [42], [2010] HCA 15 at [42]; and Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) [2010] FCA 291 ('Mantra Group') at [50] (Reeves J). The trade mark must also be a "sign" as defined in s 6. Section 6 defines the word "sign" as including any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent (or any combination of these things). The expressions "goods of a person" and "services of a person" are also defined in s 6 to mean, respectively, "goods dealt with or provided in the course of trade by the person" and "services dealt with or provided in the course of trade by the person".

C. The Delegate's Decision 16 With these provisions in mind, I turn to the delegate's decision, which led Sports Warehouse to bring this appeal. 17 The delegate found that the word mark "TENNIS WAREHOUSE" had "no visually distinctive features" and was "a combination of the purely descriptive word, 'tennis' and the term, 'warehouse', being a place from which tennis goods might be stored, ready for their sale". The delegate held that "[t]he trade mark is the type of expression that another trader, actuated only by proper motive, might want to use to describe its like services". The delegate concluded that the trade mark did not qualify for registration under s 41(3) of the Act. 18 The delegate also held that the examiner had correctly considered the trade mark application under s 41(5) (since the mark was not devoid of all distinctiveness) but that the inherent distinctiveness of the trade mark was "very low and, as such, requiring proof of a concomitant degree of acquired distinctiveness in order to justify registration" under that provision. The delegate found that the evidence disclosed that the words "Tennis Warehouse" were used in close association with a "TW" logo, that logo "being more prominent than the words in each case". The delegate concluded that the requisite proof was not shown, because "the use shown in the evidence [was] not use of the trade mark of the application and [did] not lend support to a claim of acquired trade mark significance in those words alone". 19 Accordingly, the delegate concluded that Fry Consulting had established a ground of opposition under s 41 and the opposition succeeded: see Fry Consulting Pty Ltd v Sports Warehouse Inc [2008] ATMO 21.

D. Grounds of appeal 20 The principal question raised by the appeal is whether s 41 of the Act prevents registration of the trade mark "TENNIS WAREHOUSE". By its notice of appeal, Sports Warehouse seeks orders, which, amongst others, would set aside the delegate's decision, dismiss the opposition, and allow the registration of the trade mark. The grounds of appeal are focussed on subs-ss 41(3) and (5), challenging the delegate's decision that the trade mark did not qualify for registration under either of these provisions. The grounds also included a challenge to the delegate's finding that the applicant's use of the trade mark in conjunction with the "TW" logo substantially affected the identity of the trade mark, with the consequence that the delegate did not apply s 7(1) in its favour. There was no notice of contention.

E. Nature of the appeal Appeal de novo 21 In order to understand how the Court approaches such a matter as this, it is necessary to say something about the nature of the appeal. Section 56 of the Trade Mark Act provides: The applicant or the opponent may appeal to the Federal Court from a decision of the Registrar under section 55. 22 Section 191(1) provides that the Federal Court has jurisdiction with respect to matters arising under the Act and, under s 191(2), the jurisdiction of the Federal Court to hear and determine appeals against decisions of the Registrar is exclusive of the jurisdiction of any other court except that of the High Court under s 75 of the Constitution. Under s 193, the jurisdiction under s 191 is to be exercised by a single judge. 23 Section 197 further provides: On hearing an appeal against a decision … of the Registrar, the Federal Court may do any one or more of the following: (a) admit further evidence orally, or on affidavit or otherwise; (b) permit the examination and cross-examination of witnesses, including witnesses who gave evidence before the Registrar; (c) order an issue of fact to be tried as it directs; (d) affirm, reverse or vary the Registrar's decision …; (e) give any judgment, or make any order, that, in all the circumstances, it thinks fit; (f) order a party to pay costs to another party. 24 The nature of an appeal under s 56 (and under s 35) has been discussed on a number of occasions, including in Chocolaterie Guylian at 67 [13]-[14]; Blount at 58-59; Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks (2002) 122 FCR 494 ('Kenman Kandy') at 502-3 [21]-[22] (French J); Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326 ('Torpedoes Sportswear') at 329 [15] (Bennett J); and Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 ('Woolworths') at 376-7 [32]-[34] (French J). In hearing an appeal pursuant to s 56, the Court exercises its original jurisdiction and conducts a hearing de novo. The Court is required to determine the same question that was before the Registrar - whether any ground on which the application for registration was opposed has been established - and, in answering this question, the Court must apply the same legal criteria that the Registrar was required to adopt under the Act. The Court must make its decision having regard to the evidence before it. The Registrar's decision is not to be presumed correct but the Court is entitled to have regard to the Registrar's opinion as that of a skilled and experienced person in the field of trade mark registrations: Chocolaterie Guylian at 67 [14]; Woolworths at 376-7 [32]-[33]; and Kenman Kandy at 502-3 [21]. 25 The rights of the parties are to be determined as at the lodgement date - 18 August 2005: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595 per Kitto J. Presumption of registrability and standard of proof 26 At the acceptance stage under s 33 of the Act and on appeal from such a decision, there is said to be a presumption of registrability: see Woolworths at 372 [24] (French J). This presumption arises from s 33, pursuant to which an application must be registered, unless the Registrar is satisfied that there is a ground for rejecting it. In other words, as Sundberg J said in Chocolaterie Guylian at 67 [16], "a mark will be presumed registrable unless the Registrar is satisfied, on the balance of probabilities, that a ground to reject it exists". 27 There is also said to be a presumption of registrability at the opposition stage and in an appeal under s 56 (as here): see Pfizer Products Inc v Karam (2006) 70 IPR 599 ('Pfizer Products') at 602 [8] (Gyles J). For the reasons about to be stated, however, in the present case only the application of s 41(3) is to be considered with the presumption in mind. 28 I accept that, for the reasons explained by Sundberg J in Chocolaterie Guylian at 68 [21], the effect of the presumption on s 41(3) is that, in considering whether a mark is capable of distinguishing the goods or services of the applicant from the goods or services of other persons, by reason of being "inherently adapted", the mark is presumed to be sufficiently adapted unless the Registrar is not so satisfied on the balance of probabilities. If the Registrar is not so satisfied, then the Registrar will be "unable to decide the question" (s 41(4)) whether the mark is capable of distinguishing on the basis of any inherent adaptation alone, and must proceed to consider s 41(5) or s 41(6). The presumption has no part to play under either of these subsections because the applicant is required either to "satisfy" the Registrar that the mark does or will distinguish in accordance with the criteria in s 41(5), or to "establish" that the mark does distinguish in accordance with the criterion in s 41(6). 29 Generally speaking, at the opposition stage and on appeal from a decision on an opposition, the opponent to the registration of the mark bears the onus of establishing a ground of opposition: Lomas v Winton Shire Council [2003] AIPC 91-839 ('Lomas') at [36] and Torpedoes Sportswear at 329-30 [15]. The position is different under sub-ss 41(5) and (6) of the Act: see below. 30 There was an issue in this case as to the nature of the onus that an opponent bears. On the one hand, Sports Warehouse contended that, to prevent registration, Fry Consulting must show that the trade mark should clearly not be registered. On the other hand, Fry Consulting argued that that its onus was only the ordinary balance of probabilities standard. 31 Sports Warehouse relied on a passage in Lomas at [17], where a Full Court of this Court said: No submissions were addressed to the Court concerning the standard to be applied by a single judge in considering an appeal under s 56 of the Act. The presence of s 195(2) [which imposes a leave requirement for an appeal from a single judge] suggests that a parallel should be drawn with the scheme of appeals in opposition proceedings under the Patents Act 1990 (Cth). On that basis, on appeal under s 56, the Court should consider whether the trade mark should clearly not be registered. Only if so satisfied should the Court decide to uphold an opposition. 32 There have been a number decisions at first instance in which the court has accepted that, on an appeal under s 56, the opposition should be upheld only if the court is satisfied that the trade mark should clearly not be registered: see Torpedoes Sportswear at 330 [16]-[22]; Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd (2004) 61 IPR 257 ('Austereo') at 258 [4] (Finn J); Health World Ltd v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495 ('Health World') at 497 [5]-[7] (Cooper J); and Kowa Company Ltd v NV Organon (2005) 66 IPR 131 ('Kowa') at 153 [140]-[141] (Lander J). In Torpedoes Sportswear at 330 [16]-[22], Bennett J relied on the reasoning of Emmett J in F Hoffman-La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 at 64-66 - in relation to the appeals in opposition proceedings under the Patents Act 1952 (Cth) - to support the "clearly not to be registered standard". Bennett J also relied on the report of the Working Party to Review the Trade Marks Legislation (July 1992, especially at para 1.3.4), because, as her Honour noted (at 330 [20]), "[t]he implementation of the Government's response to the Working Party Report formed the basis for the Act". 33 In Austereo at 258 [4] Finn J stated that, in an appeal under s 56, he would "as a matter of comity" apply the same standard as Bennett J in Torpedoes Sportswear. Lander J adopted substantially the same approach in Kowa at 153 [140]-[141], although his Honour stated (at 152 [137]) that he had the "same doubts that were expressed by Finkelstein and Gyles JJ" (discussed below). In Health World, Cooper J said (at 492 [6]) that, whilst he agreed with Bennett J's analysis in Torpedoes Sportswear, it was unnecessary to apply the "clearly not be registered" standard because, even on the ordinary balance of probabilities standard, the opponent had not made out its grounds of objection. 34 Whilst referring to the relevant discussion in Torpedoes Sportswear, the Court in McCorquodale v Masterson (2004) 63 IPR 582 at 589 [24] (Kenny J) stopped short of adopting the "clearly" not be registered standard. In Scotch Whisky Association v De Witt (2007) 74 IPR 382 at 384-385 [8]-[10], Sundberg J identified the issue but did not express a view about it, because the outcome was the same either way. The Full Court did not determine the issue in Woolworths Ltd v BP plc (2006) 154 FCR 97 ('Woolworths Ltd v BP Plc'), notwithstanding that, in granting leave to appeal, it had appeared that the issue would fall for determination: Woolworths Ltd v BP plc (2006) 150 FCR 134. 35 Other judges have taken a different view of the applicable standard. Gyles J twice stated that he considered the ordinary balance of probabilities standard to be applicable in an appeal such as the present: see Clinique Laboratories Inc v Luxury Skin Care Brands Pty Ltd (2003) 61 IPR 130 at 133 [12]-[13] ('Clinique Laboratories') and Pfizer Products Inc v Karam (2006) 70 IPR 599 ('Pfizer Products') at 606-607 [21]-[26]. 36 In Pfizer Products, Gyles J set out his reasons for concluding that the ordinary balance of probabilities standard applied. After noting that the observation in Lomas was obiter dictum and not the subject of argument, Gyles J discussed the authorities in some detail. Whilst his Honour accepted that there was a presumption of registrability, according to his Honour (at 605 [18]), this presumption said "nothing as to the standard of proof and d[id] not carry with it an obligation to 'clearly' establish a ground of opposition". Gyles J went on to say that (606 [21]-[22]): The fundamental difficulty with [the respondent's] argument is that it is inconsistent with the language of s 55. Whether a ground of opposition has been "established" is a conventional concept requiring no particular elucidation. In my opinion, there is no basis upon which the section can be read as "the extent (if any) to which any ground on which the application was opposed has been clearly established", particularly where that implication changes the practical operation of the section by imposing a special high onus of proof. It is also worth noting that the construction favoured in Torpedoes is not rooted in the words of the section at all. The precise finding in that case was that the opposition "should be upheld only if the court is satisfied that the trade mark should clearly not be registered": at [22]. With all respect, that test is not to be found in the statute. I cannot find anything in the structure or content of other provisions of the 1995 Act that would point to reading s 55 other than according to its ordinary meaning. In my opinion, it is not permissible to put a gloss on the clear words of the section by reference to extrinsic material. The discussion of the Working Party Report by Lander J in [Kowa] adequately discloses the difficulty. Furthermore, it can be taken that implementation of the recommendation of the working party about the bringing of opposition proceedings in trade marks into agreement with those applicable to patents "where appropriate" was effected, so far as was regarded as appropriate, by the 1995 Act and Regulations made under the 1995 Act. In my opinion, borrowing further from the field of patents in this respect is impermissible, to adopt the word used by Finkelstein J. Trade marks and patents are different species of intellectual property and have a different history. A general desire for uniformity cannot control construction of the statute governing each. 37 Gyles J concluded that (607 [26]): I am faced with the clear words of the statute, on one hand, and the opinions of various judges, on the other. There is no binding Full Court authority. I cannot find any instance where a single judge has actually applied the higher standard. In my opinion, in this case, comity does not demand that I depart from my view as to the meaning of the statute. 38 In Chocolaterie Guylian at 70 [26], Sundberg J stated that he preferred the approach of Gyles J. Sundberg J said (70 [26]) that, in his view, "there [was] nothing in the relevant provisions that support[ed] the imposition of a higher standard, even at the acceptance stage". In the same paragraph, Sundberg J went on to say: The "presumption of registrability" arises from s 33 of the Act: Woolworths 93 FCR 365 at [24]; Kenman Kandy 122 FCR 494 at [50]. Section 33 does not speak of being "clearly satisfied"; it mandates acceptance of an application unless the Registrar "is satisfied that ... there are grounds for rejecting it". On this point, I prefer the views expressed by Gyles J and in particular his Honour's observations that an acceptance that there is a presumption of registrability "says nothing as to the standard of proof" and does not import a higher threshold than the conventional balance of probabilities: see Pfizer ... at [18]. The presumption as it is gives effect to the general position under the Act that an applicant is not required to establish an absence of grounds to refuse or object to registration. It should also be noted that in both Woolworths 93 FCR 365 and Kenman Kandy 122 FCR 494 (both acceptance stage cases) there [was] no suggestion that any special higher standard was applicable. 39 Given the state of the authorities, the interests of comity favour neither side. For the reasons stated by Sundberg J in Chocolaterie Guylian at 70 [26] and by Gyles J in Pfizer Products at 605 [18], I too am of the view that, where the opponent bears the onus, that onus is to be discharged in the ordinary way. That is, there is no requirement for an opponent to show that the trade mark is clearly not to be registered. Sections 55 and 56 do not warrant the introduction of this standard, and no other statutory provision supports it. The contrary argument relies heavily on the word 'extent' in the expression "the extent (if any) to which any ground ... has been established" in s 55 of the Act. In my view, the word cannot bear the weight and I reject the argument. 40 In any case, as Fry Consulting submitted, there can be no place for any special standard in respect of sub-ss 41(5) or (6), because these provisions place the onus on the applicant for registration, Sports Warehouse, rather than on the opponent. That is, as noted earlier, these provisions require the applicant for registration to "satisfy" the Registrar (s 41(5)), or "establish" (s 41(6)), that the relevant criteria are met: compare Chocolaterie Guylian at 68-69 [21]. As Branson J said in Blount at 56, referring to Rejfek v McElroy (1965) 112 CLR 517 at 521: Where the Act requires the Registrar to be "satisfied" of any matter, it is to be understood as requiring that he or she be persuaded of the matter according to the balance of probabilities . . . That is, that the Registrar be persuaded, having given proper consideration to those factors and circumstances that the Act requires him or her to give consideration to, that such matter is more probable than not. Under s 41(5), the Registrar must be persuaded by the applicant on the balance of probabilities that the trade mark does or will distinguish, having regard to the considerations in s 41(5)(a). The standard is the same under s 41(6), where the applicant must establish on the balance of probabilities that the mark does distinguish "because of the extent to which the applicant has used the trade mark before the filing date".

F. Evidence 41 In support of its case for registration, Sports Warehouse relied on affidavits sworn by Mark Sczbecki on 16 October 2008; Robert Gordon Jackson, on 16 October 2008; Isaac Samuel, on 15 October 2008; Rod Cross, on 23 October 2008; Rod Weir, on 16 October 2008; and Claude Balestrat, on 15 October 2008. Each deponent was subject to cross-examination. Sports Warehouse also sought to rely on the affidavit of Don Hightower sworn on 16 October 2008, which is discussed below. Mr Hightower was not subject to cross-examination. 42 In opposition, Fry Consulting relied on the statutory declaration of Wesley Fry dated 21 March 2007. This was before the delegate and Mr Fry adopted it in evidence before the Court. Fry Consulting also relied on the affidavit of Mr Fry sworn on 24 December 2008 and the affidavit of Anthony Brooke Watson sworn on 24 December 2008.

G. The businesses of the parties 43 The practical context in which the issues are raised is important for their ultimate resolution. The following is a brief discussion, first, of the business of Sports Warehouse and, second, of the business of Fry Consulting.

The Sports Warehouse business 44 As noted above, Sports Warehouse has operated its online retailing business from the tennis warehouse website, using the tennis-warehouse domain name, for well over a decade. By this means, Sports Warehouse has sold tennis apparel (clothing and footwear) and tennis gear (including equipment, accessories and sports bags). 45 Initially, Sports Warehouse made online retail sales from the tennis warehouse website to US residents only, but, since about 1995, it has also made retail sales to customers outside the USA, including Australia. The first sale by Sports Warehouse from the tennis warehouse website to a person in Australia was on or about 5 July 1995. 46 Since 1995, a typical retail sale to an internet shopper from the tennis warehouse website has involved the internet shopper visiting the site and an item webpage (depicting the particular items of tennis apparel or tennis gear that are for sale). If the shopper wanted to make a purchase, the shopper placed an order for the relevant item and provided the requisite information to Sports Warehouse (including a billing and shipping address, direction as to shipping, details as to credit card or PayPal) in order that Sports Warehouse might process the order and verify the payment details. Sports Warehouse used this information to deliver an invoice to the shopper's billing address and the item selected by the shopper to the shopper's shipping address. The goods were shipped out to the customer on the same day that payment was made. 47 The goods which Sports Warehouse sold were stored in California, in a warehouse building, of some 3,000 square feet in area. The goods were distributed from here when a sale was made. In addition to Sports Warehouse's online sales, customers were able to come in person to the warehouse and purchase goods directly. However, such sales constituted less than one per cent of Sports Warehouse's total sales. 48 The building in California also housed other sports goods sold by various companies that were linked to Sports Warehouse and one another through common ownership. In much the same way as Sports Warehouse, these other companies conducted internet-based retailing businesses through their individual websites. They included: (1) www.runningwarehouse.com for running equipment, since 2005; (2) www.racquetballwarehouse.com for racquet ball, since approximately 2003; (3) www.skatewarehouse.com for skateboarding equipment, since 2003; (4) www.inlinewarehouse.com for inline skating equipment, since 2001; and (5) www.tacklewarehouse.com for bass fishing tackle, since 2003. 49 From 1994, when the "Tennis Warehouse" business began until the trial, most of Sports Warehouse's customers came from the United States, and formed some 80 to 85 percent of its total sales. Sales to Australian customers were modest compared to world-wide sales, although there was evidence of Australian sales growth, particularly after 2001. 50 From July 2005 (when Sports Warehouse made its first Australian sale) until September/October 2008, total sales to Australian customers were in the order of some US$2.857 million. In about the same period, Sports Warehouse made 17,474 deliveries to Australian customers through orders placed on its tennis warehouse website. Sales to Australian customers increased from July 1995 to September/October 2008. Sales rose consistently from 2001. In 2004, sales to Australian customers totalled US$238,320 and, in 2005, US$289,706. 51 Put in tabular form, the approximate annual sales figures in Australia from the online retailing of tennis gear from the tennis warehouse website were as follows: Year Australian sales 1995 US$219 1996 US$6,169 1997 US$18,196 1998 US$16,628 1999 US$29,522 2000 US$27,339 2001 US$24,879 2002 US$43,706 2003 US$98,868 2004 US$238,320 2005 US$289,706 2006 US$350,596 2007 US$750,963 Year to September 2008 US$983,621

52 Sport's Warehouse's annual advertising expenditure worldwide for the tennis warehouse website was as follows: Year Tennis warehouse website advertising expenditure 1998 US$72,587 1999 US$105,143 2000 US$235,678 2001 US$356,722 2002 US$442,913 2003 US$656,932 2004 US$557,322 2005 US$557,322 2006 US$783,669 2007 US$1,140,942 January 2008 - 16 October 2008 US$1,092,629

53 Bearing in mind that the designated services are online services accessible on the web, it may be relevant to consider the evidence of visits to the tennis warehouse website by Australian consumers. 54 Plainly enough, visitors to the tennis warehouse website included visitors from Australia, as evidenced by the "page impressions" retrieved by internet users with an Australian IP address. The evidence as to the approximate annual number of "page impressions" for the tennis warehouse website retrieved by internet users with an Australian IP address showed a steady increase in traffic from 2004 to 2007 and for January to September 2008. 55 Some care is needed, however, when considering the page impression evidence. The number of page impressions was obtained by multiplying the number of visits to the website and the average number of pages per visit. As Mr Sczbecki rightly conceded, the resulting figures would not precisely correspond with the number of Australian visitors to the tennis warehouse website. For one thing, the calculation did not take account of repeat visitors to the site. 56 There was, however, some evidence as to "New Visits". An analysis by Google Analytics of the relevant page impressions for the period 15 August 2007 to 30 September 2008 ('the Google Analysis') provided some further information, indicating that approximately 33% - 35% of visits to the tennis warehouse website were classified as "New Visits". Yet there was considerable uncertainty in the evidence about the manner in which this information was compiled and what it meant. For example, when cross-examined about the Google Analysis, Mr Sczbecki was uncertain as to whether the percentages for "New Visits" meant that the balance were repeat customers (and, if so, the extent to which repeat customers visited the site). Also in cross-examination, Mr Sczbecki conceded that it would be impossible to tell from the available data whether, in 2004, 2005 or 2006, any particular person had made a number of repeat purchases. In re-examination, Mr Sczbecki said, however, that, although he was unable to give an exact percentage, he would put the percentage of repeat customers from Australia at over 50 per cent. 57 Further, although there was no direct evidence as to the actual numbers of New Visits between 2004 and August 2007, Mr Sczbecki's evidence was that the percentages of "New Visits" for August 2007 to September 2008 as shown in the Google Analytics was typical, and that they could be extrapolated to represent the statistics for 2004 to August 2007. Accepting Mr Sczbecki's evidence, the page impressions, number of visitors and number of new visitors for the respective years may be summarised as follows: Year Page Impressions Number of visits Number of new visitors 2004 1,200,000 133,333 44,000 2005 1,500,000 166,666 55,000 2006 2,200,000 244,444 80,666 2007 3,797,000 421,888 139,223 January 2008 - September 2008 3,500,000 388,888 128,333

Fry Consulting's business 58 Fry Consulting was incorporated in early September 2004 for the purpose of running an online retail tennis gear store and, on 10 September 2004, Fry Consulting was registered as the owner of the business name "Tennis Warehouse" under the Business Names Act 1962 (Vic). Also in September 2004, Fry Consulting registered its domain name www.tenniswarehouse.com.au and began operating its online retailing business. 59 Fry Consulting's sole director was Mr Fry, who, up until the date of trial, owned and controlled the company. Mr Fry was also the general manager of Fry Self-Storage - his family's self-storage business - which he took over in 2001. In the beginning, Fry Consulting stored its goods for sale in one of the storage facilities owned by Fry's Self-Storage in Port Melbourne, Victoria. 60 Most of the work on Fry Consulting's website was done towards the end of December 2004, although the company commenced operations shortly after incorporation, making one sale in 2004 for just over $300. Fry Consulting continued to trade principally via its website until late 2005 when it started a retail outlet store at 200 Alexandra Parade, Fitzroy. This building also housed a storage facility owned by Fry Self-Storage. 61 Mr Fry decided to run an online tennis gear store only a couple of months before September 2004. Mr Fry explained that he wanted to start his own business, although he did not want this new business to impact on his role as general manager of Fry Self-Storage. His evidence was that, in this context, he conceived of the idea of operating an online retail tennis gear store in the months prior to September 2004, because he was "passionate about tennis". Mr Fry added that "I couldn't think of any other products that I would want to sell online so I probably didn't consider any other products to sell online". 62 Mr Fry's initial choice of the name "Tennis Warehouse" for the business of Fry Consulting was not coincidental, although Mr Fry was inclined to be evasive about his long-term knowledge of Sports Warehouse's online tennis retailing business, at one point saying merely that he may have visited tennis warehouse website "many years earlier ... when I was looking to get some hard to find racquets". It was clear, however, that, by September 2004, Mr Fry was well aware of the online tennis goods retailing business being conducted from the tennis warehouse website. In planning for his own online store prior to September 2004, he had searched the internet for other online traders in tennis gear in order to determine the nature of the competition in online tennis retailing. Mr Fry acknowledged that these searches had disclosed the tennis warehouse website; that in consequence he had visited the tennis warehouse website; and that his visit to the website had "probably" led him to choose the name "Tennis Warehouse" as the business name for Fry's Consulting's own tennis retailing business. Mr Fry conceded that, prior to September 2004, he had investigated the range of goods available at the tennis warehouse website and that, as at September 2004, he knew that sales were being made to Australian customers through the tennis warehouse website. Further, Mr Fry admitted that, in developing the Fry Consulting website, he had taken images from the tennis warehouse website. 63 In late December 2004, however, Fry Consulting changed the name on its website from "Tennis Warehouse" to "Tennis Warehouse Australia", although its domain name remained the same. The occasion for the change in name so soon after the registration and first use by Fry Consulting of "Tennis Warehouse" was the email correspondence in December 2004 between Mr Fry and Mr Hightower, President of Sports Warehouse. 64 On 21 December 2004, Mr Hightower sent an email to Mr Fry in which he claimed that Sports Warehouse had a "worldwide trademark on the name Tennis Warehouse", and requested Mr Fry to cease using its "trademarked name" by operating a business with the name Tennis Warehouse and a website with the URL http://www.tenniswarehouse.com.au/. Mr Fry responded on 22 December 2004, with confirmation that he was running the business at the website, and asserting that: When setting up my company I did thorough research on the name including checking to see if the name had a world wide trademark. My information showed that it was not an international trademark. If I have been misinformed, please provide me with the International Trademark Number so that I can find it, or provide me with some evidence that you have a world wide trademark. If you do, I will gladly trade under a different name. I own the business name "Tennis Warehouse" in Australia and when applying for this the Australian Business Register does a search to make sure it is not conflicting or breaching any trade marks. This name passed all checks and I was able to obtain it. As part of our business, we operate our warehousing from a Self Storage Warehouse, we do not have a shop. The name Tennis Warehouse was chosen for this reason. We are still a young business and have not spent much on marketing, so the prospect of a changing our name is not unreasonable. If it must be done, I would rather do it sooner than later, however, I would like to see evidence of your world trade mark before I make this change. Please note that I am only interested in selling to Australia. It is my intention to change the heading at the top of the page from "Tennis Warehouse" to "Tennis Warehouse Australia" and you will notice this change happen soon anyway. 65 Mr Hightower responded the following day, stating that: …We will gather the requested documentation and provide to you after the New Year. I think you'll agree that Tennis Warehouse is essentially an international "brand", that we have developed over the past 12 years. As such, we must vigorously enforce our trademark, or risk misuse by third parties. In the meantime, I would request (and suggest) you pursue a different business name, so as not to confuse consumers of any connection between your business and ours. … 66 This correspondence reveals error on both sides. There was no worldwide trade mark, as Mr Hightower claimed. Neither party suggested that the documentation mentioned in Mr Hightower's last email was ever supplied to Mr Fry. In cross-examination, Mr Fry accepted that he erroneously said that the Victoria business register had an Australia-wide application, although he claimed that he was unaware that registration on the business register did not involve a search on the trademark register. Ultimately, nothing turns in this case on these errors. 67 In cross-examination, counsel for Sports Warehouse asked Mr Fry whether the change on Fry Consulting's website from "Tennis Warehouse" to "Tennis Warehouse Australia" was occasioned by Mr Hightower's emails. Mr Fry replied that "I always intended to do it". He conceded, however, that Mr Hightower's email "made it happen quicker". Mr Fry justified his position by saying that he wanted to "explain to customers that we were focussed on Australia only". I do not accept Mr Fry's evidence in this regard. Mr Fry was not a wholly credible witness. Whilst forthcoming and open on some occasions, he was evasive and self-serving on others. I find that the email correspondence from Mr Hightower led Mr Fry to change the name on Fry Consulting's website from "Tennis Warehouse" to "Tennis Warehouse Australia". Apart from the email correspondence, there was no reason put forward by Mr Fry that would explain the change so soon after the registration and initial use of the original name, "Tennis Warehouse". The change that occurred was precisely that foreshadowed in Mr Fry's response to Mr Hightower. Furthermore, despite the change in the name at its website, Fry Consulting did not apply to change its name on the Victorian business register. Nor did it apply to register the name "Tennis Warehouse Australia". As already noted, there was no change in its domain name. 68 I interpolate here that Mr Hightower's affidavit was only provisionally admitted in evidence, being subject to a relevance objection by Fry Consulting. The parties agreed that the objection should not be determined until after closing submissions. The affidavit was almost entirely concerned with this email correspondence, which was exhibited to it. Given the way in which Sports Warehouse developed its case and the relevance of this correspondence to the application of the test (see below) set down by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 ('Clark Equipment'), the objection should be overruled. 69 Whilst Mr Fry stated in his statutory declaration of 21 March 2007 that "[t]he Opponent's Trade Mark has been used and promoted extensively throughout Australia", he was obliged to resile from this position in cross-examination. Mr Fry accepted that the respondent's advertising expenditure was nil in 2004, just over $5,000 in 2005, approximately $10,000 in 2006, and about $17,000 in 2007. According to Mr Fry, prior to 18 August 2005, advertising and promotion was in the form of the use of the name "Tennis Warehouse Australia" (with a tennis ball logo) on invoices and the use of the name and logo on the respondent's website. Mr Fry also said that the respondent started using sponsored Google links some time in 2004. 70 The respondent had a sign displayed on the building at 200 Alexandra Parade, Fitzroy, where it conducted its retail business, although Mr Fry could not be sure that the sign went up prior to 18 August 2005. He could recall having "three lots of signs on the building", of which the following is a photograph: 71 After 18 August 2005, the respondent extended its advertising to include advertisements in newspapers and magazines (such as The Age, Australian Tennis Magazine, Tennis Victoria Pennant Guide), the distribution of posters to tennis clubs throughout Victoria, the placement of advertisements in the New South Wales tennis calendar 2007 (containing tournaments and tennis events scheduled for the year), the sponsorship of 56 players attending the Shepparton Lawn Tennis Tournament and the distribution to the players of t-shirts, featuring the "Tennis Warehouse Australia" name. It is sufficient to note that these items included the words "Tennis Warehouse Australia" and contact details, including the respondent's website address. 72 Fry Consulting's sales revenue increased over time, although it was very modest in 2004. There was no direct evidence about the sales in 2005 prior to 18 August 2005, although Mr Fry indicated that, in any given year, sales are highest between December to January, tapering off after March or April. The respondent's sales revenue may be summarised as follows: Year Sales (AUD$) 2004 $319.00 2005 $291,237.30 2006 $972,743.93 January 2007 to 27 February 2007 $255,423.82

H. Consideration 73 Whether or not s 41 of the Act operates to prevent the registration of the trade mark depends on the resolution of two issues. 1. To what extent is the trade mark "TENNIS WAREHOUSE" inherently adapted to distinguish the applicant's online tennis retail services from those of other traders (s 41(3))? 2. If the trade mark is only to some extent inherently adapted to distinguish the applicant's services from those other traders, then, given: (a) the extent to which the trade mark is inherently adapted to distinguish the applicant's services; (b) the actual or intended use of the trade mark by the applicant; and (c) any other circumstances, does or will the trade mark distinguish the applicant's services as those of the applicant (s 41(5))? 74 The following discussion deals separately with each principal issue. Inherently adapted to distinguish - s 41(3) 75 The trade mark application for TENNIS WAREHOUSE must be rejected if the trade mark is not capable of distinguishing the designated services of Sports Warehouse from the services of other persons: s 41(2). In deciding whether the trade mark is capable of distinguishing the designated services, the Court must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated services from the services of others: s 41(3). This is the question raised by s 41(3). Whether or not the mark is inherently adapted to distinguish the designated services is to be considered objectively as at the lodgement date (18 August 2005). 76 In considering the question raised by s 41(3), one must first identify what is meant by saying that a trade mark is or is not inherently adapted to distinguish an applicant's goods or services from those of other traders. In Clark Equipment at 513-14, Kitto J explained the criterion of "inherently adapted to distinguish", by reference to the observations of Lord Parker of Waddington in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 ('W & G Du Cros') at 634-5, in the following way: Th[e] ultimate question must not be misunderstood. It is not whether the mark will be adapted to distinguish the registered owner's goods if it be registered and other persons consequently find themselves precluded from using it. The question is 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. In [W & G Du Cros] Lord Parker of Waddington, having remarked upon the difficulty of finding the right criterion by which to determine whether a proposed mark is or is not "adapted to distinguish" the applicant's goods, defined the crucial question ... and added two sentences which have often been quoted but to which it is well to return for an understanding of the problem ... His Lordship said: "The applicant's chance of success in this respect [i.e. in distinguishing his goods by means of the mark, apart from the effects of registration] must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. ..." The interests of strangers and of the public are thus bound up with the whole question ... but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish 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 same analysis can be applied to services. 77 Note 1 to s 41(6) also gives some further guidance as to what is intended by "inherently adapted to distinguish" in the present context: see [13] above. 78 In answering the question posed by s 41(3), the Court is thus required to consider whether other traders are likely, in the ordinary course of their businesses and without improper motive, to want to use the same mark, or some mark closely resembling it, upon or in connection with their own services. 79 Sports Warehouse argued that Fry Consulting failed to establish that the trade mark TENNIS WAREHOUSE was a mark that, as at the lodgement, other traders were likely, in the ordinary course of business and without improper motive, to desire to use upon or in connection with their online retailing of tennis related goods. That is, Sports Warehouse contended that the trade mark was inherently adapted to distinguish the designated services from those of other persons within the meaning of s 41(3) to such a degree that the Court should be satisfied that the trade mark was capable of distinguishing the designated services from the services of others without needing to proceed to the next stage of the enquiry as directed by s 41(4). 80 Fry Consulting submitted to the contrary that, on any view, Sports Warehouse's mark lacked the requisite degree of inherent distinctiveness for registration under s 41(3). Fry Consulting argued that: (1) the words "tennis" and "warehouse" were insufficiently distinctive, both individually and in combination; and (2) it was likely that other traders will want to use these words in good faith in relation to their services in such a way that there might be an infringement of the trade mark if it was registered. 81 Following Fry Consulting's argument, I discuss the first main issue raised by the appeal by reference to the descriptiveness of the mark and, then, by reference to the likelihood of use by other traders. 82 For the reasons set out below, I reject Sports Warehouse's submission that the TENNIS WAREHOUSE mark was inherently adapted to distinguish the designated services from those of other persons within the meaning of s 41(3) to such a degree that the Court should be satisfied that the trade mark was capable of distinguishing the designated services from the services of others; and, therefore, there was no need to consider the position under s 41(5). (1) Descriptiveness 83 The Note 1 to s 41(6) of the Act indicates that the degree of descriptiveness attaching to the mark may be relevant in considering whether a mark is or is not inherently adapted to distinguish the designated services. See also Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) 47 IPR 579 at 589 [30] (Wilcox J). There is a high (though not absolute) degree of descriptiveness in the words "TENNIS WAREHOUSE" that argues against the mark being inherent adapted to distinguish. 84 I accept that the word "tennis" ordinarily refers to the well-known game played with a racquet and ball on a marked court over which there is a net, and that the primary, ordinary meaning of the word "warehouse" is a commercial building for the storage of goods: see Macquarie Dictionary (third ed, 2001; fourth ed, 2005) ("storehouse for wares or goods"); Oxford English Dictionary (1989) ("[a] building ... used for the storage of merchandise"). Relevantly too, The Australian Oxford Dictionary (1999) defined the word "warehouse" as meaning "1. a building in which esp. retail goods are stored; a repository. 2. a wholesale or large retail store …". 85 Sports Warehouse argued that when the words were taken together, they had no sensible meaning. It argued that, as at the lodgement date, the word "warehouse" in Australia did not include either a large wholesale or retail store, or a store from which goods are sold to the public. That is, as I understand this argument, the word did not then include the idea of a warehouse-style retail store or the use of a warehouse as a distribution point for retail outlets. 86 One can place too much weight on dictionary definitions. Whilst they provide a guide to the meaning of a word, they may not set out its meaning exhaustively. Colloquial usage may provide further meanings to those set down in the dictionaries. However, this is not really a case of a suggested new meaning. Here, the word "warehouse" retains its primary meaning as a storehouse for goods. What is in dispute is the accepted function of the storehouse, as at the lodgement date. Sports Warehouse would confine that function to storage for manufacturers, importers, exporters and wholesalers. Fry Consulting would extend the function to storage for retailers and distributors to retail customers. This extension reflects the changes in the nature of trade, especially those taking place towards the end of the twentieth century, as opposed to the introduction into the language a new meaning for an old word. Consistently with this, The Australian Oxford Dictionary (1999) recognized that the word "warehouse" covered a storehouse having the function for which Fry Consulting contended. 87 I would not accede to the argument advanced by Sports Warehouse. As at the lodgement date, when used together, the words "tennis warehouse" signified a place in which goods relating to the game of tennis were stored and, in the context of the business being conducted, stored for sale to retail customers. I return to the internet aspect of the business below. 88 As the evidence of Mr Sczbecki showed, this meaning partly accounted for the founders' choice of the name "Tennis Warehouse" in 1994, when the online tennis retail business was begun. 89 Mr Sczbecki, the Chief Operating Officer of Sports Warehouse, said in cross-examination that he and his business partners selected the name in relation to the online business with which this case is concerned, first, because it was tennis equipment that was for sale and, secondly, because they thought that the word "warehouse" would attract customers since it carried the implication or connotation that one is "going to get a good deal". The other online businesses with which Sports Warehouse was connected made similar use of a descriptive word (to indicate the nature of the goods for sale) in combination with the word "warehouse". Further, in this regard, one must also bear in mind that Sports Warehouse actually had a commercial building (or warehouse) in California in which it stored the tennis equipment and other tennis-related items that it offered for sale over the internet. On any view, the mark TENNIS WAREHOUSE is in large measure descriptive of the applicant's business. 90 It is unnecessary to decide whether or not, as at the lodgement date, the combined use of the words "tennis warehouse" also had a colloquial connotation of a place where tennis goods were sold at lower or 'warehouse' prices, as Mr Sczbecki's evidence suggests, although I note that there was (as noted below) evidence that it carried this colloquial connotation in Australia as at the trial date. It is sufficient to say that, as at the lodgement date, the name had a sensible meaning that was in large measure descriptive of the applicant's designated services. The only pertinent aspect of the applicant's business that was missing from the name "Tennis Warehouse" was its online character. I return to this below. 91 Sports Warehouse submitted that, only if another word were added to the trade mark could it be regarded as more (though not entirely) descriptive of its services, as, for example, "Tennis Gear Warehouse", "Tennis Apparel Warehouse", or "Tennis Goods Warehouse". However, the additional words add little to the relatively clear meaning of the words "tennis warehouse", because the connotation of "tennis" when used in relation to "warehouse" is of goods relating to the game of tennis, rather than the game itself (as Sports Warehouse argued). The addition of an intervening word that would make the connotation explicit is unnecessary. For much the same reason, the High Court held that the word "Barrier" was highly descriptive in relation to protective skin creams: see F.H. Faulding & Co Ltd v Imperial Chemical Industries &c Ltd (1965) 112 CLR 537 at 556 (Kitto J, with whom Barwick CJ agreed). There was, as the respondent submitted, a direct descriptive connection between the mark "Tennis Warehouse" and the designated services, in the sense that the name was apt to describe a place that held tennis clothing, tennis equipment, tennis accessories and the like, and, in the context of the business being conducted, a place from which such items would be distributed to retail customers. 92 Sports Warehouse placed some weight on the fact that the words "Tennis Warehouse" were not descriptive of the online aspect of its retail services, in which internet users did not actually enter a storage building to make their purchases. As noted above, I agree this online characteristic is not a necessarily element in the mark "TENNIS WAREHOUSE". Fry Consulting argued that "[t]he 'real' and 'virtual' worlds have now become features of everyday existence, with familiar terms from the physical environment being readily transferred to, and applied in the online environment". This tendency is reflected in the very business in respect of which the mark is sought to be registered. It does not, however, answer the essential point that Sports Warehouse is seeking to make. 93 The failure specifically to allude to this characteristic does not greatly diminish the descriptive nature of the mark. One can accept that the mark would be apt to describe a non-internet based business with a warehouse in which its goods were stored for distribution directly to retail customers and other retail outlets. However, the difference between physically-based retailing and internet retailing lies primarily in the way retail sales are made, as opposed to their use of a warehouse for their goods. Whilst an internet-based retailer such as Sports Warehouse does not require physical retail space, it still requires a building in which to store the goods that it offers for sale over the internet. Accordingly, as Mr Sczbecki's evidence made clear, Sports Warehouse did in fact have a large warehouse in California in which it stored all the items that it offered for sale through its tennis warehouse business and its other online retailing services. 94 Nonetheless, Sports Warehouse has identified a point at which the mark TENNIS WAREHOUSE is not entirely descriptive of the designated services. The fact that Sports Warehouse actually had a warehouse - a place in which it stored the items that it advertised for sale on the internet - does not precisely answer the point being made because the designated services to which the trade mark application related are "online retail services", and not a retail service requiring physical retail space. 95 Fry Consulting submitted that the present case was not one in which the descriptive usage was indirect or allusive, as in Mark Foy's Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 ('the Tub Happy case') at 195 (Dixon CJ) and 201 (Williams J) or unexpected or fanciful, as in the frequently-cited "North Pole bananas" example. I agree that the use of the words "Tennis Warehouse" to describe the online retailing services of Sports Warehouse is not as indirect as in the Tub Happy case. That is, the descriptive element of the trade mark TENNIS WAREHOUSE is greater than in the Tub Happy case and the use is not unexpected or fanciful. Nonetheless, it seems to me that the reference to the online character of the services is to some extent indirect. That is, whilst the mark TENNIS WAREHOUSE is highly descriptive of the designated services, the mark does not fully describe those services. (2) Likelihood of use by other traders 96 The inherent adaptability of the mark TENNIS WAREHOUSE to distinguish the designated services of Sports Warehouse from those of other traders may be tested by considering the likelihood of other traders wishing legitimately to use these words in relation to their own services. This is an essentially hypothetical question. Instances of post-lodgement date third party use can be no more than indicative: they cannot be decisive. It is to be borne in mind, however, that the interests of other traders are necessarily bound up in the question of registrability since registration will preclude them from using the registered mark. 97 As already noted, Sports Warehouse and other companies associated with it have made a deal of use of the word "warehouse" in combination with other directly descriptive words for the other online businesses that the companies operate from the same premises in California. These businesses commenced operation under their respective names between 2001 and 2005: see [48] above. 98 In his affidavit of December 2008, Mr Watson, the applicant's solicitor, deposed to having conducted an internet search using the key word "WAREHOUSE" in the Google search engine. This disclosed that, a few years after the lodgement date, there were on the web a number of companies using the word "warehouse" in their name, including, for example, "Games Warehouse" for online selling of computer games, "DVD Warehouse" for online selling of DVDs and "Fitness Warehouse" for online selling of fitness equipment. 99 Further, some witnesses gave evidence that the word "warehouse" was used, at least by the time of trial, in connection with a number of businesses in Australia. These witnesses referred, for example, to "Bunning's Warehouse" and "Sportsmans Warehouse". Also at trial, some witnesses gave evidence that the word "warehouse" used in the name of a business generally indicated a place to store a large volume of goods with the connotation that the goods might be sold more cheaply than elsewhere. There is, of course, an issue as to what use can be made of this evidence especially given that it related to the situation a few years after the lodgement date ( see below). 100 Save for the respondent's use of "Tennis Warehouse" or "Tennis Warehouse Australia" (see below) and Sports Warehouse's use of "Tennis Warehouse", there was no evidence of any other trader as at the lodgement date using the word "warehouse" with another word descriptive of a product to denote online (or other) retailing of that product or related things. Sports Warehouse argued that these examples of use of the word "warehouse" in connection with various businesses should be disregarded because they related to years after the date of lodgement. Sports Warehouse contended that "[i]t could be that those marks were adopted because the idea of using a mark '[X] Warehouse' in respect of online ... retailing only became something traders might desire to do after the lodgement date". Fry Consulting submitted that the evidence served to show that it would have been open to traders to make such use at any time before the date of trial. 101 In the present context, I accept that the evidence is admissible and, as explained by Fry Consulting, relevant to show the degree to which the mark was inherently adapted to distinguish the designated services from those of other traders. In Chocolaterie Guylian, Sundberg J adopted the same approach. Sundberg J accepted (at 79 [54]) that evidence of events after the lodgement date (whether evidence as to the applicant's use of the mark or as to the use of similar marks by other traders) might be relevant to determining whether, as at the lodgement date, the applicant's mark was capable of distinguishing the applicant's designated services, because such evidence had "the ability to rationally affect, albeit with varying degrees of weight, the conclusion one might reach about the extent to which a mark is inherently adapted to distinguish under s 41(3) of the Act". Sundberg J continued (79 [54]) that, in assessing the likelihood, as at the lodgement date, that: ... other traders will behave in a certain way in the future, evidence of how they have in fact come to behave will be relevant, although close attention should be paid to whether such rival behaviour has been "actuated only by proper motives". In the absence of evidence of improper motive, however, it seems to me logical and appropriate that post priority date events should, where appropriate, be taken into account by decision-makers in exercise of the "evaluative judgment" (see French J in Kenman Kandy 122 FCR 494 at [47]) required under s 41(3). 102 Under s 41(3), the Court is required to assess, as at the lodgement date, the likelihood that other traders would want, in the ordinary course of their businesses and without improper motive, to use the same mark, or some mark closely resembling it, upon or in connection with their own services. If there were no evidence to show that traders had used the word "warehouse" in combination with other words to indicate the goods they are selling, the case for Sports Warehouse would have been improved. The fact that there was some (later) usage is relevant to assessing the probability that, as at the lodgement date, other traders would want to use the mark, or something like it. I accept, however, that this evidence can be given only limited weight and can be in no sense decisive of the principal issue. In so far as it can "rationally affect" one's conclusion about the extent to which a mark is inherently adapted to distinguish under s 41(3), it tends to indicate that there was, at the lodgement date, some likelihood that other traders would want to use the mark in the ordinary course of their businesses and with no improper motive and, therefore, to diminish one's estimation of the extent to which the applicant's mark was inherently adapted to distinguish the designated services. 103 Particularly in written submissions, Fry Consulting relied on the fact that it had adopted the composite mark "TENNIS WAREHOUSE AUSTRALIA" preceded by a tennis ball logo in late 2004 for its own business operations. In these written submissions, Fry Consulting claimed that this was "an instance of another trader who sells exactly the same kinds of goods as [Sports Warehouse] and also does so from a physical warehouse" using a mark nearly resembling that of Sports Warehouse. 104 For present purposes, I have not had regard to the respondent's use of its composite mark. The conduct of Fry Consulting and of its sole director, Mr Fry, was not that of a trader "actuated only by proper motives" in the sense intended by Kitto J in Clark Equipment (see [76] above). The evidence to which I have already referred showed that Mr Fry, as sole director of Fry Consulting, originally chose the name "TENNIS WAREHOUSE" after visiting the tennis warehouse website to assess the rival business of Tennis Warehouse. Further, when Mr Fry chose the name for his own new business he was aware that, through the tennis warehouse website, the proprietor of the tennis warehouse business (Sports Warehouse) not only had the capacity to sell tennis goods from that website to customers in Australia, but had in fact done so. The effect of Mr Fry's evidence was that he adopted the name after forming the opinion that it would benefit his business to do so because potential customers would be confused by the identicalness of the names into believing that there was some association between his business and that of Sports Warehouse. Mr Fry admitted to taking images from the tennis warehouse website. When Mr Fry caused Fry Consulting to change the name on its website from "Tennis Warehouse" to "Tennis Warehouse Australia" in late December 2004, he did so because of the email correspondence from Mr Hightower, President of Sports Warehouse, but it is not suggested that his essential motive in adapting the "Tennis Warehouse" name to his own business as "Tennis Warehouse Australia" had altered. 105 I accept that, strictly speaking, on the appeal, the respondent's conduct is not under examination. I also accept that the overarching inquiry is essentially hypothetical ([76] above). Because of the matters to which I have just referred, however, Fry Consulting's use of the marks "Tennis Warehouse" or "Tennis Warehouse Australia" cannot be relied on by it as an instance in which another trader actuated only by proper motives (in the relevant sense) has wanted to use the trade mark in suit or one closely resembling it. 106 The ultimate question on the issue of inherent adaptation is whether the relevant sign - the words TENNIS WAREHOUSE - possesses any ordinary signification and, if it does, whether or not other traders might think of the words and want to use them for that ordinary signification in a manner that would infringe a registered mark in respect of the sign. An important consideration in all of this is the nature of the services for which the mark is to be used. 107 In applying s 41(3), I must make an evaluative judgment after giving due weight to the assessment made by the Registrar's delegate. The degree of likelihood in this case turns very much on the extent to which the words TENNIS WAREHOUSE are descriptive of the designated services. As already stated, in my view, the words are in large measure descriptive of these services although they have a distinctive element in so far as they refer to online services. Nonetheless, this is not a case where the trade mark is imaginative in any real sense, so that it lacks "the associations that would lead to confusion": see Kenman Kandy 122 FCR 494 at 536 [162] (Stone J). Further, the evidence of the post-lodgement use by other traders of marks that resemble the applicant's mark tends to confirm the likelihood that other traders might want to use the applicant's mark, or a mark very like it in respect of like services and might have some difficulty in avoiding infringement proceedings if they were to do so. While the lack of reference to the business's online character means that the trade mark is to some extent inherently adapted to distinguish, viewed as at the lodgement date, a another trader selecting a name for an online retail business in the ordinary course might well come to choose and want to use one that did not specifically advert to that aspect of his business. 108 Accordingly, I am satisfied that, viewed as at the lodgment date, there was some degree of likelihood that other traders acting with proper motives would want in the future to use the words TENNIS WAREHOUSE or words closely resembling them. While I am satisfied that the mark is to some extent inherently adapted to distinguish, the extent of inherent adaptation is insufficient to decide the matter under s 41(3). Fry Consulting has discharged its onus under s 41(3), whether the standard is that of the balance of probabilities (as I have held) or the higher "clearly not be registered" standard.

Distinguishing the designated services by reference to other factors - s 41(5) 109 Since the Court considers that the trade mark is to some extent inherently adapted to distinguish but is unable to decide that, because so inherently adapted, the trade mark is capable of distinguishing the designated services, s 41(5) is applicable: see s 41(4). Indeed, the respondent conceded that in this case s 41(5) was the applicable provision and s 41(6) was not. The effect of s 41(5) can be briefly stated. If, having regard to the combined effect of the considerations listed in s 41(5)(a), the Court is satisfied that the trade mark does or will distinguish the designated services, then, by virtue of s 41(5)(b), the trade mark is taken to be capable of distinguishing the designated services from the services of other persons. In this event, the question to which s 41(2) gives rise would be answered affirmatively and the trade mark would proceed to registration, there being no other objection taken to it. If, on the other hand, having regard to the combined effect of the considerations listed in s 41(5)(a), the Court is not satisfied that the trade mark does or will distinguish the designated services, then, by virtue of s 41(5)(c), the trade mark is taken not to be capable of distinguishing the designated services from the services of other persons. 110 Since the trade mark TENNIS WAREHOUSE has a relatively low level of inherent adaptation to distinguish compared to many other marks, it will require a correspondingly higher level of use and other circumstances to satisfy the Court that it does or will distinguish the designated services: see Chocolaterie Guylian at 88 [83]; Unilever Australia Ltd v Societe Des Produits Nestlďż˝ SA (2006) 154 FCR 165 at 177 [57] (Bennett J); Time Warner Entertainment Co LP v Stepsam Investments Pty Ltd (2003) 134 FCR 51 at 59-60 [42] (Wilcox J); also Shanahan's Australian Law of Trade Marks and Passing Off (Mark Davison, Tracey Berger and Annette Freeman; 4th edition; Lawbook Co; Sydney; 2008) ('Shanahan's') at [25.650]. The less the mark is inherently adapted to distinguish, the more the actual use of the mark (or other circumstances) will be required to satisfy the Court that the trade mark does or will distinguish the designated services. Further, according to Shanahan's, where there are many other ways of describing the relevant services, the descriptiveness of the trade mark may be less significant than where the trade mark is close to being "a sign that is ordinarily used to indicate a characteristic of the goods": see Shanahan's at [25.650], quoting Kamyr Inc's Application (1996) 34 IPR 432 (Reg); also Austereo at 266 [38]. The evidence of use must be for the trade mark that is the subject of the trade mark application: Shanahan's at [25.655] and Woolworths Ltd v BP Plc at 126-7 [121]-[123] (in relation to s 41(6)). 111 Section 41(5) permits the registration of a trade mark that is not inherently sufficiently adapted to distinguish, but that has as at the lodgement date in fact acquired a capability to distinguish the relevant services: see Chocolaterie Guylian at 88 [84] and Austereo 61 IPR 268 [51]. In other words, s 41(5) recognises that marks which are insufficiently inherently adapted to distinguish may nevertheless by their use or other circumstances have become distinctive in the minds of consumers so that they will be able to "do the job of distinguishing" the applicant's goods: Chocolaterie Guylian at 88 [84]. Thus, under s 41(5), an applicant relying on use prior to the lodgement date will need to show that the mark has in fact been used as a trade mark prior to the lodgement date so as to have acquired the requisite capability to distinguish the applicant's goods: Chocolaterie Guylian at 88 [84]. 112 Evidence of use after the lodgement date may be relevant under s 41(5): see Austereo at 265 [32]-[33] and Re Pound Puppies Trade Mark [1988] RPC 530 at 533. As was said in the latter case: ... it is permissible when deciding whether the mark was capable of distinguishing to take into account use after the date of application. If a mark has in fact become distinctive, then it is at least likely to have had a capacity to distinguish. (Emphasis added) 113 As the above passage shows, the relevance of post-lodgement use depends on whether it supports an inference that the trade mark was capable of distinguishing the applicant's services at the lodgement date. In Austereo at 264 [33] Finn J said: What requires emphasis, though, is that subsequent use evidence, no less than evidence of intended use, is relevant only to the question of whether the mark possessed the required capability at the priority date. It will not assist an applicant for registration if that use demonstrates no more than (i) the mark has the potential or capacity to acquire that capability in the future; or (ii) that the mark has acquired distinctiveness only because the relevant community has since the priority date been "educated" to see the mark as an indicator of the origin of particular services: British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 at 306; Re Application by Cadbury Ltd (2002) 55 IPR 561 at 570. 114 See also Austereo at 268 [51]. In Austereo, Finn J held that the post-priority date evidence of use was that the trade mark SOUNDS DIFFERENT acquired distinctiveness after the priority date from its use with other marks. His Honour found (at 268 [52]): That use educated other traders and the public as to the association between the SOUNDS DIFFERENT mark and the [relevant] businesses. In other words, it was through the subsequent usage that the mark acquired a capability to distinguish. The evidence does not support an inference that the required capability existed at the priority date. In consequence, Finn J held that the SOUNDS DIFFERENT mark should not be registered. 115 Counsel for Sports Warehouse challenged Finn J's interpretation of the authorities referred to in the above passages from Austereo. Having re-read those authorities, I do not discern any material error. The discussion by Jacobs J in British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281 at 306 may permit of a different reading, but the essential point is incontestable: "[i]n the case of common or apt descriptive or laudatory words compelling evidence is needed to establish" that the mark has acquired a sufficiently distinctive character to become a trade mark. Subject to this, I would adopt his Honour's analysis for this case. Moreover, notwithstanding counsel's protestations to the contrary, there did not seem to me to be much difference between Finn J's statement of principle and that for which counsel contended - namely, "[e]vidence of use after lodgement may assist the court in determining whether, because of the intended use at the date of lodgement, the trade mark had the potential to in fact distinguish". 116 It is appropriate now to turn to the evidence about the applicant's use of the trade mark, which Sports Warehouse argued proved "an extensive degree of actual and intended use at the lodgement date which satisfie[d]" s 41(5). Fry Consulting submitted to the contrary that this evidence was insufficient to meet the cumulative requirements of s 41(5). In particular, Fry Consulting contended that the applicant's evidence "fail[ed] to address the critical question of what was the actual trade mark under which these online retail services were provided and, further, whether this was in fact use of the trade mark within the meaning of the Act". As Fry Consulting said, "[i]t is one thing to show, or to allege, a high volume of sales but if these have not been carried out under the trade mark, or one that contains only such additions or alterations as do not substantially affect its identity (as allowed under s 7(1)), such evidence is irrelevant for the purposes of s 41(5)". For the reasons that appear below, I essentially accept Fry Consulting's submissions in this regard.

Use of the trade mark (1) Tennis Warehouse Australian customers and potential customers 117 As noted already, the majority of Tennis Warehouse sales were to customers in the USA. Prior to August 2005, less than 1 percent of sales were in response to orders from Australian customers. Notwithstanding this, between July 1995 and 2004, Sports Warehouse made internet sales to Australian customers through the tennis warehouse website totalling US$554,872. Between July 1995 and 2005, sales totalled US$793,192, although the proportion of 2005 sales attributable to the period before the lodgement date in August 2005 was undisclosed. The pre-lodgement sales were not insignificant in Australian terms, although they were not particularly large, and modest when compared with the totality of Tennis Warehouse sales in this period. 118 Although Sports Warehouse' expenditure on the advertising and promotion of the tennis warehouse website was considerable, the extent to which this was directed to, or capable of affecting, the Australian market was unclear. Only a limited amount of advertising and promotion was of such a kind (see below). 119 There was also evidence of post-lodgement sales: see [51] above. This showed that sales totalling US$2,085,180 were achieved between 2006 and September 2008. (For the precise post-lodgement figure, one would presumably need to add a proportion of the sales for 2005.) Although the figures evidenced growth in the Australian market, they did not reflect an especially high volume of sales in the Australian market, and remained comparatively modest when considered against Tennis Warehouse sales overall. Moreover, the relevance of this evidence (in the way outlined above) depends on whether it could be linked to sales and other relevant transactions that have occurred by reference to, or in relation to, the trade mark TENNIS WAREHOUSE. 120 As already noted, the evidence of page impressions (or page retrievals) by Australian internet users, before and after the lodgement date, needed to be treated cautiously. Taking account of the estimates for new visits in 2004 and 2005 (44,000 and 55,000 respectively), the estimated number of visits for 2004 (133,333) and for 2005 (166,666) were not insignificant but nor were they very large. There was no evidence relating to earlier years. The numbers of separate visits in 2005 would appear to have been considerably less than those in 2007. In any case, I accept that, as the respondent submitted, it is very difficult to put this kind of data in perspective and, in so doing, reliably assess its value as an indication of the volume of traffic to the tennis warehouse website in the relevant years. For the purposes of establishing distinctiveness under s 41(5), this evidence therefore is of limited value. (2) The tennis warehouse website 121 Most of Sports Warehouse's sales of tennis gear, tennis apparel etc have been made over the internet via the tennis warehouse website. Sports Warehouse presented evidence of the appearance of its home page for the tennis warehouse website from 1998 until 9 October 2008 (a little over three years after the lodgement date). The respondent accepted that there can be a use of a trade mark in relation to goods or services in Australia where the trade mark is used on a website outside Australia that is accessible to, and is accessed by, customers in Australia: see Ward Group Pty Ltd v Brodie & Stone Plc (2005) 64 IPR 1 at 14 [53]-[54] (Merkel J). This evidence of the claimed use of the trade mark on the tennis warehouse website was to the following effect. 122 Between 1998 and 2008, the home page for the tennis warehouse website used the words "Tennis Warehouse" in a generally consistent fashion, although the precise style of the words varied. A banner was introduced in 2001 and the "TW" logo, in 2003. The banner ran along the top of the home page and was approximately one inch long and ten inches wide ("the banner"). 123 The evidence showed that the 1998, 1999 and 2000 home pages presented only the words "Tennis Warehouse" without either the logo or the banner. This was as follows in 1998 and 1999: In 2000, the presentation differed slightly, as follows:

124 In 2001 and 2002, the home page again showed the words "Tennis Warehouse" slightly differently and this time, in the banner, as follows:

125 From 2003 to 2005, the homepage showed the words "Tennis Warehouse" with the "TW" logo adjacent and to the left of the words. The "TW" logo comprised the letters "TW" inside a roundel or oval. The banner remained but different styles of 'watermarks' formed the banner background, such as the letters "Wareh" as shown in the following example: 126 From 2006 to December 2008, the banner again displayed the words "Tennis Warehouse" with the adjacent "TW" logo. In addition, the letters "TM" appeared in fine print next to the words and the logo in the banner, as follows: 127 The respondent rightly accepted that, in principle, use of the trade mark on the tennis warehouse website home page was capable of being regarded as use in relation to the online retailing services offered at the applicant's website. As the above examples illustrate and Mr Sczbecki confirmed in cross-examination, since 1994, Sports Warehouse has used the words TENNIS WAREHOUSE in various styles and fonts. Prior to 2003, Sports Warehouse used the words in a stylised form, with the enlarged "T" extending over two lines and a capital "W" nestling under the "T". There was some slight background shading added in 2000. The most significant change was the addition of the "TW" logo in the oval in 2003. From 2005, the symbol "TM" was added after the "TW" device and the words TENNIS WAREHOUSE. 128 The respondent submitted that these and other changes within the banner underlined the "highly descriptive/non-distinctive character of the alleged mark" and that prior to 2003 Sports Warehouse was using various stylised representations of the words "TENNIS WAREHOUSE", rather than the words themselves. The respondent further submitted that, from 2003, Sports Warehouse was effectively using a composite mark that comprised the "TW" symbol together with the words "TENNIS WAREHOUSE" against the rectangular banner background. Fry Consulting argued that "[e]ach or any of these versions might provide evidence of use of that particular version for the purpose of s 41(5), but none was equivalent to the use of the words 'TENNIS WAREHOUSE' themselves". Fry Consulting added that Sports Warehouse could not "pray in aid here the provisions of s 7(1) on the basis that these [were] only additions or alterations that [did] not substantially affect the identity of the mark". 129 Sports Warehouse argued that the changes in the way the words "TENNIS WAREHOUSE" were presented, with and without the "TW" logo, assisted its case. Sports Warehouse submitted that, since the trade mark was the word mark, it was the use of the words that was important, rather than the font or style. In this connection, Sports Warehouse relied on the evidence of the trade and consumer witnesses to the effect that the words "TENNIS WAREHOUSE" were important (although some also attached varying importance to the "TW" logo). I return to this evidence below. 130 As already noted, the delegate held that the applicant had not proved its use of the mark in Australia for the purposes of s 41(5). Of course, use of the mark was not said to be confined to use on the tennis warehouse website and I discuss other uses below. Further, on this appeal, Sports Warehouse has adduced more evidence than before the delegate. The delegate's finding that "there [was] no example of use by the applicant of the words, separated from the logo" was contradicted by the further evidence before the Court that showed various instances of separate uses of the words "TENNIS WAREHOUSE" on the website home page prior to 2003. There was evidence of other separate use too: see below. 131 Notwithstanding the respondent's submission about the stylised versions of the words "TENNIS WAREHOUSE" used on the tennis warehouse website home page prior to 2003, I accept that, as Sports Warehouse argued, these uses were relevant uses of the mark. The trade mark was for the word mark that appeared on the website. Up until 2003, the various styles in which the words appeared did not diminish the significance of this use. 132 The position is different after 2003. I accept the respondent's submission that the close association of the "TW" logo within the oval and the words "TENNIS WAREHOUSE" to some degree deprived the use of the words "TENNIS WAREHOUSE" of their significance as a trade mark on the webpage that standing alone they formerly had. It is, so it seems to me, unnecessary to decide whether the words together with the "TW" logo amounted to the one composite mark, or whether the words and the "TW" logo were two marks placed together in close association. Even if the latter, the effect of the "TW" logo placed in close association with the words "TENNIS WAREHOUSE" had the effect of substantially diluting any trade mark significance that attached to the words used by themselves. 133 I accept, as Sports Warehouse contended, that a sign may be registrable as a trade mark even though it is used together with another trade mark, and that there can still be use of a mark where it is a component of a larger composite mark: see Chocolaterie Guylian at 93 [97]; also E & J Gallo Winery at 662 [68]-[69]; also E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2008) 77 IPR 69 at 108 [186] (Flick J). Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 74 IPR 246 ('Colorado') is not authority for the contrary proposition. Each case turns on its own facts and the trade mark in question viewed in the context of those facts. In Colorado Allsop J held that on the facts of that case the significant use as a trade mark was use as a composite mark and that there was no relevant use of the word "COLORADO" as a separate mark: 273 [110] (Allsop J); see also 225 [36] per Gyles J. Where an application for registration relies on use, the question is whether the particular sign for which registration is sought has itself been used as a trade mark so as to become capable of distinguishing the relevant goods or services. In my view, when the "TW" logo was placed in close association with the words "TENNIS WAREHOUSE" in 2003, this had the effect of substantially diluting any trade mark significance that attached to the words "TENNIS WAREHOUSE" by themselves. 134 Sports Warehouse argued that the delegate had wrongly diminished the importance of the "TM" symbol that appeared beside the words "TENNIS WAREHOUSE", as well as beside the "TW" logo from 2006 to December 2008. I do not consider that the delegate was wrong to treat the use of the "TM" symbol as comparatively unimportant in this case. This use may show something about the applicant's subjective intentions post the lodgement date, but it says comparatively little about the use of the mark for the purposes of s 41(5). (3) Use on third party websites 135 Sports Warehouse conducted most of its advertising for the tennis warehouse website online. 136 From 2001, Sports Warehouse placed advertisements for its tennis warehouse website (and its retail services) on third party internet sites, such as the Men's Professional Tennis Tour ('the MPTT') and the Women's Professional Tennis Tour ('the WPTT') websites. These websites contained specific links to the tennis warehouse website. Mr Sczbecki said that, in 2007, 19.33 percent of Sports Warehouse's advertising expenditure was on advertising at third party websites, and that this advertising was typical of the advertising conducted by Sports Warehouse since 2001. The advertising payment arrangements with the third party sites varied. In some cases, Sports Warehouse paid an up-front fee for the use of a third party site - as for the MPTT and WPTT websites - but, in most other cases, a percentage of sales resulting from the direction from the third party site to the tennis warehouse website. 137 The evidence as to the number of Australian customers directed to the tennis warehouse website post-dated the lodgement date. It leant little support to the applicant's case. The evidence showed that the number of Australian customers directed to the tennis warehouse website varied, depending on the third party site. Thus, from June 2006 to 30 September 2008, the number of Australian customers directed from the MPTT website was 1,706, while only one customer was directed from each of the Tennis Resort Online and the Juniortennis.com websites. Overall, the number of Australian customers directly attributable to third party sites linked to the tennis warehouse website was small. 138 Further, the way in which the words "Tennis Warehouse" appeared on third party internet sites varied over time on the one site and between sites. In the main, the words "Tennis Warehouse" appeared with the "TW" logo, often with the "TW" logo being dominant. On occasions, the words "tennis warehouse" appeared in combination with other devices, or the words were used in a non-trade mark way, as in "Pro-Shop - Powered by TW Tennis Warehouse" or "Powered by TW Tennis Warehouse". There were even instances where the words "Tennis Warehouse" did not appear at all on the third party site, but customers clicking on a link would find themselves taken to the tennis warehouse website. As the respondent submitted, these instances of alleged third party use provided frail support for the proposition that the words "TENNIS WAREHOUSE" were being used as a trade mark in their own right. Even allowing for the fact that the links may have been seen and used by non-purchasing internet users, this form of advertising added little (if anything) to the applicant's case on use for the purposes of s 41(5). (4) Use on promotional emails 139 Sports Warehouse maintained a mailing list containing the email addresses of persons who had requested receipt of promotional emails. This list included emails addresses for Australian recipients. A sample of the promotional emails sent to the recipients in December 2001, February 2005 and September 2008 was in evidence. It suffices to note that in these promotional emails there were banners in which the words "Tennis Warehouse" appeared in different styles and, in the latter two examples, in combination with the "TW" logo. In cross-examination, Mr Sczbecki's evidence was that the style of these banners or headings might vary in each mailing between 2001 and 2005, but, in re-examination, he said that, for the most part, the headings had generally stayed the same over time. 140 Where the words "TENNIS WAREHOUSE" appeared with the "TW" logo, the observations at [132] to [133] are pertinent. As explained above, the effect of the "TW" logo placed in close association with the words "TENNIS WAREHOUSE" had the effect of substantially diluting any trade mark significance that attached to the words used by themselves. Moreover, the email of December 2001 depicted the words "Tennis Warehouse" with an oval running around most of the word "Tennis" and the "W" in "Warehouse". I would not regard any of these promotional emails as providing much support for the applicant's case on use of the words "TENNIS WAREHOUSE" as a trade mark for the purposes on s 41(5). (5) Use as a domain name 141 Sports Warehouse submitted that its use of the domain name (www.tennis-warehouse.com) was a relevant and substantial use of the trade mark. Sports Warehouse argued that once the content of a website was associated with a domain name, the domain name became a sign used in relation to the website content. According to Sports Warehouse, if the website content itself provided a mechanism for the sale of goods or services to consumers, then the use of the domain name in the context of the website would also constitute use as a trade mark in relation to at least the online retailing of those goods and services or in relation to those goods or services. Sports Warehouse supported this argument by reference to the following provisions of the Act. 142 In addition to the definition of "sign" in s 6, and ss 8 and 17 of the Act, Sports Warehouse referred to s 7, which provides that: (1) If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark. (2) To avoid any doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, a use of the trade mark. (3) An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark. (4) In this Act: Use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods). (5) In this Act: Use of a trade mark in relation to services means use of the trade mark upon, or in physical or other relation to the services. 143 Sports Warehouse concluded that the "use of a domain name in relation to a website which retails a certain type of goods will be use of that name as a trade mark to distinguish the online retailing service of that website owner from online retailing services of others". Sports Warehouse observed that "[i]t is the context in which the aural representation or domain name is used that will make its use as a trade mark or not - not the fact that it is an aural representation or a domain name itself". 144 Fry Consulting argued to the contrary that Sports Warehouse could not rely on the use of the domain name as evidence of use of the trade mark TENNIS WAREHOUSE either before or after the filing date. It contended that: The domain name www.tennis-warehouse.com is clearly not the same as the applicant's trade mark because of the addition of the prefix www. and suffix .com, to say nothing of the hyphen between "tennis" and "warehouse". These additions clearly identify this as a domain name, rather than anything else. 145 Further, the respondent submitted that, even if s 7(1) overcame the point about differences, nonetheless there was no use as a trade mark, within the meaning of s 17 of the Act. Thus, according to Fry Consulting, "a domain name is only an address on the internet, which provides a link to the [a]pplicant's website, in the same way as a name in a telephone directory will lead an inquirer to the telephone number or address of a particular person". Fry Consulting submitted that, in view of this, as a matter of principle, even if the trade mark were within the domain name, there was not a trade mark use. That is, so the respondent said, the connection between a domain name (identifying a webpage) and an online retailing service accessible at that webpage was too remote to constitute use as a trade mark, or use of the words as a badge of origin of the services offered on the webpage. Fry Consulting submitted that, on its own, the domain name said nothing about the goods and services of the trader whose name it is "until such time as the customer or inquirer arrives at the associated website and can see what those goods and services are". 146 As explained below, I accept that the better view is that a domain name may constitute use of a trade mark. 147 This is consistent with Australian authority, although Australian authority is sparse. In this Court, there was CSR Ltd v Resource Capital Australia Pty Ltd (2003) 128 FCR 408 ('CSR'), which was a case of cyber squatting. The respondent obtained registration of the domain names "csrsugar.com" and "csrsugar.com.au" and then offered to sell these registered domain names to the applicant. The applicant brought an action against the respondent under ss 52 and 53 of the Trade Practices Act 1974 (Cth) and an infringement action under s 120 of the Act. Hill J found it only necessary to deal with the s 52 case, holding that the respondent's conduct was misleading or deceptive or likely to mislead or deceive. In obiter dictum, his Honour said at 416 [42]: I think there is a real difficulty in relief being given under the Trade Marks Act 1995 (Cth) by virtue of RCA having infringed the CSR trade marks. It is a problem that is noted by the Court of Appeal in the British Telecommunications plc v One in a Million Ltd (1998) 42 IPR 289 case but not ultimately decided by it. It is one thing to say that a cyber squatter who registers a name intending to sell that name to the owner of the trade mark or threaten a sale to a competitor if the owner does not come up with the money may have registered the name as an instrument of fraud, and thereby be guilty of the tort of passing off as was held by the Court of Appeal in England. The case of British Telecommunications plc v One in a Million Ltd (1998) 42 IPR 289 was followed by Architects (Australia) Pty Ltd (t/a Architects Australia ACN 010 362 937) v Witty Consultants Pty Ltd [2002] QSC 139 and Australian Stock Exchange Ltd v ASX Investor Services Pty Ltd (unreported, Federal Court, Burchett J, 3 June 1999). But it is another thing to say that for the purposes of s 120 of the Trade Marks Act 1995 (Cth) RCA used the domain name as a trade mark in relation to goods or services in respect of which CSR had registration or for that matter closely related to either goods or services referred to in the CSR registrations. No doubt it can be said that the interests of CSR were likely to be adversely affected by the acts of RCA but that is not sufficient to constitute an infringement. There could be a threatened infringement if one were to take seriously the suggestion that RCA intended to engage in the sugar trade. Clearly, however, that was not the real intention of RCA or Mr Boland, who at no time used or intended to use the domain names as trade marks in relation to either goods or services. (Emphasis added.) 148 If attention is paid to the words emphasized in the above passage, it is plain enough that Hill J allowed for the possibility that a domain name might be used as a trade mark and that, in other circumstances, use of a domain name as a trade mark could constitute an infringing use. The reasons why this was unlikely in CSR are made clear in the passage itself. 149 The decision of Havery J (UK High Court Chancery Division) in Ellerman Investments Ltd v C-Vanci (2006) 69 IPR 215 also supports the view that the appearance of a trade mark in a domain name can constitute use of the trade mark. The first claimant owned the Ritz Hotel in London. It had various registered trade marks incorporating or consisting of the name "Ritz", including for use for the provision of gaming services. The second claimant, a subsidiary of the first claimant, operated the hotel's casino, the Ritz Club, and was exclusively licensed to provide gaming services under and by reference to the trade marks. The claimant also provided, through their Ritz Online website, online gaming accessed via the domain names www.ritzclublondon.com and www.ritzclublondon.co.uk. The defendants registered as domain names www.ritzpoker.net, www.ritzpoker.co.uk, www.ritzypoker.net, www.ritzpoker.org, www.ritzpoker.info and www.ritzpoker.biz, which they used to promote a gambling-related website containing links to third-party gaming sites. They had also configured the internet addresses associated with each of these domain names so as to point to a new website called "RitzPoker". The claimants sought to restrain the defendants' alleged trade mark infringement under Article 5(1) of the European Trade Marks Directive 89/104/EEC and applied for summary judgment on the basis that the defendant had no real prospect of successfully defending the claim. 150 Havery J granted the claimants' summary judgment application, holding (at 220 [16]) that there was no real prospect that the claimants would fail to establish at trial that there existed a likelihood of confusion on the part of the public between the claimants' marks and the defendants' signs arising out of the similarity between the marks and the signs, and the services to which they respectively related. Further, Havery J held (at 220 [15]) that "[t]he RITZ mark has a highly distinctive character because of its use, and accordingly, confusion between it and the defendants' signs in question [was] the more readily to be inferred" and that the public were likely to believe, wrongly, that the parties' respective services came "from the same, or economically linked, undertakings". 151 The respondent referred me to Avnet Inc v Isoact Ltd [1998] FSR 16, for the proposition that use as a domain name does not amount to trade mark use. In that case, however, the plaintiff's and the defendant's services were not the same so that no case of infringement for domain name use of a trade mark could be established. 152 In the United States too, the appearance of a trade mark in a domain name may constitute use of the trade mark. For example, in Nissan Motor Co v Nissan Computer Corp 378 F.3d 1002 (9th Cir. 2004), Nissan Motor Company sued Nissan Computer Corporation for using the internet websites www.Nissan.com and www.Nissan.net. The US Court of Appeals, Ninth Circuit, held that the trade mark "NISSAN" used in connection with the sale of automobiles was infringed by these websites which, though not containing material regarding automobiles, provided links to other automobile-related websites, from which Nissan Computer Corporation profited: 378 F.3d at 1019. 153 It is not suggested that mere registration of a domain name can amount to use of the mark. More must be shown. Plainly enough, not all domain names will be used as a sign to distinguish the goods or services of one trader in the course of trade from the goods or services of another trader. Sports Warehouse is correct in its submission that that whether or not a domain name is used as a trade mark will depend on the context in which the domain name is used. In this case, the domain name is more than an address for a website, the domain name is also a sign for the applicant's online retaining service available at the website. In the context of online services, the public is likely to understand a domain name consisting of the trade mark (or something very like it) as a sign for the online services identified by the trade mark as available at the webpage to which it carries the internet user. 154 In this case, the obvious differences between the trade mark TENNIS WAREHOUSE and the domain name to which the respondent referred do not substantially affect the identity of the mark within the meaning of s 7(1) of the Act. As Sports Warehouse submitted, Windeyer J's statement of the test for substantial identity (see s 44 of the Act) in Shell Co (Aust) Ltd v Link Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 414 is also a guide as to whether "a person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark" (s 7(1)): see also Link Recruitment Pty Ltd v Employment and Training Inc (2006) 69 IPR 614 at [21]-[22] (Hearing Officer Nancarrow). Adapting Windeyer J's statement to the inquiry under s 7(1), whether a person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark requires a side by side comparison of the trade mark with the alleged use, assessing the importance of their similarities and differences having regard to the essential features of the trade mark and the total impression of resemblance or dissimilarity that emerges from the comparison. 155 Applying this test, I do not consider that the additions or alterations substantially affected the identity of the mark. In the present case, the prefix "www." and suffix ".com" are merely indicia of a domain name. The hyphen between the words "tennis" and "warehouse" is a well-known way in which domain name registrants overcome the need to exclude spaces from the name. I am fortified in this conclusion by The Architects (Australia) Pty Ltd t/a Architects Australia ACN 010 362 937 v Witty Consultants Pty Ltd [2002] QSC 139, a case of passing off and breach of s 52 of the Trade Practices Act 1974 (Cth), in which Chesterman J held (at [21]) that the name "Architects Australia" was identical to www.architectsaustralia.com.au. 156 Accordingly, I conclude that the use of the domain name www.tennis-warehouse.com constituted use of the mark TENNIS WAREHOUSE, being a use of the trade mark with additions or alterations that did not substantially affect the identity of the mark. (6) Advertising other than online 157 In addition to online advertising, outside Australia, Sports Warehouse undertook advertising activities under the "Tennis Warehouse" name through television and the sponsorship of tennis tournaments, but, since they were outside Australia, these activities were not relevant here. Sports Warehouse also advertised in "Tennis", a magazine distributed in Australia though published in the USA. Advertisements in the magazine can be regarded as use of the trade mark. 158 Dr Cross, who was an honorary associate professor in the Faculty of Science at the University of Sydney with an expertise in the physics of sports and forensic physics, gave evidence for Sports Warehouse. Dr Cross said that he had been aware of Sports Warehouse's tennis warehouse website since about 1998 as a result of seeing its advertisements in copies of "Tennis", which he had bought in Australia. In response to a question in cross-examination, Dr Cross produced a copy of the January 1998 issue of "Tennis", which included an advertisement for "Tennis Warehouse" at the tennis warehouse website. A copy of the April 1999 issue of "Tennis" was also exhibited to his affidavit, which included the same advertisement. These advertisements took the following form:

159 Dr Cross's evidence was that the advertisement "appears in every issue of those old issues and they are still advertising". Dr Cross agreed that the words "Tennis Warehouse" were represented in the magazine advertisements a way "that's consistent and recognisable". 160 I accept that the advertisements in "Tennis" illustrate use of the words "TENNIS WAREHOUSE" as a trade mark on its own from at least 1998. This evidence assists the applicant's case to some extent, although I also note that there was no evidence of the extent of the magazine's circulation in this country. 161 Furthermore, since 2001, Sports Warehouse has made available to the public garments and other articles such as t-shirts, bottles and sports bags, depicting the words "Tennis Warehouse" and sometimes the "TW" logo. These items were either provided free of charge to customers as promotional items, generally where the customer made purchases up to a certain value, or they were available for sale directly. Most items bore the words "Tennis Warehouse" - in various fonts and styles - and usually in conjunction with other words (such as "Team Athletics") or other logos (such as a graphic image of tennis players, a tennis ball, the "TW" device, or the "TW" logo (with the oval or roundel)). 162 The numbers of such items made available in Australia was not large. By mid-October 2008, 1008 t-shirts, 94 sports bags and around 350 bottles had been sent to Australian customers, and the bulk of these items were sent only after 2005. 163 Having regard to the very low numbers of these articles reaching Australian consumers and the fact that they arrived in Australia after the lodgement date, I would regard this evidence of use (if this was what it was: see below) as being of minimal assistance to the applicant's case. Furthermore, any assistance to the applicant's case is significantly diminished by fact that the words "Tennis Warehouse" almost always appeared with other letters, devices or logos that were, visually speaking, almost always equally or more important. For the reasons explained earlier, the effect of the different letters, devices and logos in close association with the words "TENNIS WAREHOUSE" had the effect of substantially diluting any trade mark significance that attached to the words used by themselves. As a consequence, I would attach almost no weight to the evidence of these articles, whether promotional gifts or sold in the ordinary way. 164 The respondent also submitted that, in so far as the articles were supplied as gifts, the use was not in the course of trade - a proposition that may be accepted. Further, the respondent argued that this evidence did not show the use of the TENNIS WAREHOUSE trade mark in relation to online retailing services, as the services were completed with the shipping of the goods ordered by the customer. Again, I consider that this proposition may very well be correct. For the reasons stated above, however, it is unnecessary to consider these points further. (7) Use on invoices 165 Prior to October 2005, the applicant's invoices bore the words "TENNIS WAREHOUSE", with the enlarged "T" and "W", as on the tennis warehouse webpage. A separate "TW" symbol appeared in the centre of the invoice. For the reasons already stated, I reject the respondent's submission that the use of this somewhat stylised version of the words "TENNIS WAREHOUSE" cannot amount to use of the words themselves. Further, the appearance of the "TW" symbol as a watermark did not detract from the use of the words TENNIS WAREHOUSE as a trade mark on these invoices. 166 As regards the invoices, the respondent submitted, however, that, if there were any trade mark use of the words "TENNIS WAREHOUSE" on these invoices, it was no longer in the course of trade, as required by s 17, as the goods had already been purchased by the customer, as recorded in the invoice. The respondent referred to Mr Szcbecki's evidence that the articles, when ordered online, did not leave the warehouse in California until such time as they had been paid for, and the invoices went out with the articles to the customer. Moreover, so the respondent argued, it would be difficult to say that this was a use in relation to "online retailing" as such since these services had been performed at the time the order was received online and conveyed by email to the warehouse for completion. 167 In order to understand this submission, one must bear in mind that, in dealing with the question, "what is a trade mark?", s 17 of the Act states: A trade mark is 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. 168 The judgment of the High Court in WD & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 1B IPR 511 ('WD & HO Wills') provides some guidance as to what is meant by "the course of trade". Rothmans applied to remove the appellant's registered trade mark from the register for non-use. The appellant claimed "use" in the form of transactions whereby purchasers in Australia ordered goods bearing the mark from, and were supplied by, a related company in the USA, in circumstances where the purchasers paid for the goods in the USA in US dollars, the goods were consigned to and imported by such purchasers (for private use) f.o.b. and bore a sticker containing the words "Made in USA for the proprietors in Australia [WD & HO Wills (Australia) Ltd]". The full High Court (Dixon CJ, McTiernan, Williams, Webb and Taylor JJ), dismissing an appeal from Fullagar J, held that all trade in the goods sent to Australia occurred in the USA and, therefore, no relevant use of the mark occurred in Australia, and as a result the mark would be removed from the register. The Court said (at 522) that: Fullagar J ... reached the conclusion that [the evidence] did not establish any use at all of [the] trade mark . . . in Australia by anybody. We agree with this conclusion. In our opinion the whole trading in the cigarettes took place in the United States. It was there and there only that the trade mark PALL MALL was being used for the purposes of trade. When the goods left the United States they were no longer in the course of trade. Trading in them had finished. They had been consigned to the consumer and were at his risk. To repeat the words of Lord Macmillan [in Aristoc Ltd v Rysta Ltd [1945] AC 68 at 87]: After goods have reached the consumer they are no longer in the course of trade. The trading in them has reached its objective and its conclusion in their acquisition by the consumer. 169 Plainly enough, there are differences between the present case and WD & HO Wills. This is borne out in the High Court's discussion of the "use" significance of the sticker. In relation to the sticker, the Court said (also at 522): An interpretation that would suit the appellant best would be that they are a notification to the Australian consumers that the cigarettes which they had purchased from the British-American Tobacco Co had been manufactured in the United States for the appellant and that the appellant was the proprietor of Pall Mall cigarettes sold in Australia. From this it might be inferred that the sale of the packets in the United States by the British-American Tobacco Co to the Australian consumers was made on behalf of the appellant. But this would not be a use of the mark in Australia. It would be a use of the mark in the United States where the goods were offered for sale and sold. It was only there that the mark was being used for the purposes of trade. The appellant was not offering for sale or selling any Pall Mall cigarettes in Australia either directly or indirectly.

In this case, the designated services were being offered by Sports Warehouse in Australia. 170 I reject the respondent's submission that the designated services were performed at the time the order was received online and conveyed by email to the warehouse for completion. The despatch of the articles subject to the purchase order was necessarily incidental to the designated services. Those services were not concluded until Sports Warehouse despatched the articles ordered and paid for by the customer. As the respondent contended, however, by the time an invoice left Sports Warehouse with the articles to which it related, the customer had paid for his or her purchases and the articles had been consigned to the customer: compare E & J Gallo Winery at 654 [33], 657 [47] referring to WD & HO Wills. The trade was complete. Accordingly, I accept the respondent's submission that the use of the trade mark upon invoices was not a use "in the course of trade" for the purposes of s 17 of the Act. 171 If I were wrong in this regard, I would regard the pre-October 2005 invoices as evidence of trade mark use. I would reject the respondent's submission that the use of the words "TENNIS WAREHOUSE" on the invoices could not otherwise amount to a trade mark use. The respondent submitted that the words "were simply used to refer to the name of the business, followed by some trade puffery ... and then detailed information as to the applicant's email address, its physical address ... direct telephone and fax numbers, and an international email address [being] standard information of the type one would normally expect to see at the top of any business invoice". I disagree. The words "TENNIS WAREHOUSE" were no less a badge of origin because they appeared in the context of other information. 172 After October 2005, the applicant's invoices adopted a different lay-out. The invoices continued to have the words "Tennis Warehouse" in the top right corner but these words were now accompanied by the "TW" logo (i.e., "TW" inside the roundel or oval). This, it seems, remained the format for some time up until March 2008 (when the roundel was deleted). With the addition of the "TW" logo, the use of the words "TENNIS WAREHOUSE" as a trade mark was significantly diminished. As I have already said in regard to other alleged uses, the effect of the "TW" logo placed in close association with the words "TENNIS WAREHOUSE" had the effect of substantially diluting any trade mark significance that attached to the words themselves. Further, for the reasons already stated, the use of the trade mark upon these invoices was not a use "in the course of trade" for the purposes of s 17 of the Act. (8) Use on Packaging 173 Further, since 2000, Sports Warehouse has branded the shipping boxes used for delivering online purchases with the words "Tennis Warehouse", together with the tennis warehouse website address and a 1-800 telephone number. These boxes were used for its Australian customers, as well as customers elsewhere. 174 As already stated with respect to the pre-October 2005 invoices, I reject the respondent's submission that the use of the somewhat stylised version of the words "TENNIS WAREHOUSE" cannot amount to use of the words themselves. For the reasons stated above, however, I would accept the respondent's submission that the use of the trade mark upon packaging was not a use "in the course of trade" for the purposes of s 17 of the Act. By the time the shipping boxes left Sports Warehouse, the customer had paid for his or her purchases and the articles within the boxes had been consigned to the customer. The trade was complete. If I am wrong in this regard, I would not in any event attach much weight to use on boxes for purposes of determining whether the mark did or would distinguish the applicant's services as at the lodgement date. (9) Trade and Consumer evidence 175 In addition to evidence of the actual use of the trade mark "Tennis Warehouse" in Australia, Sports Warehouse relied on the evidence of trade and consumer witnesses for the issue of distinctiveness. 176 Mr Jackson gave evidence that he was the director of an Australian company that manufactured strings, predominantly used for sporting equipment such as tennis racquets. The company distributed its products in Australia and overseas, including the USA. Mr Jackson deposed that he had been aware of the brand name "Tennis Warehouse" since 2002, when it was brought to his attention by his company's US distributor, and that he associated the name "with an online retailing business of tennis sporting equipment based in the US at the domain name www.tennis-warehouse.com". Mr Jackson said that, in 2004, he became aware that, under the name "Tennis Warehouse", the US business sold tennis apparel and equipment to the Australian market "when he received inquiries from Australian customers comparing [his company's] prices displayed on the Tennis Warehouse website relative to [its] domestic prices". The "Tennis Warehouse" business was and continued to be one of his company's customers (through its US distributor). Mr Jackson asserted that "[i]f any other trader were to use the words Tennis Warehouse as their trade mark in Australia or as part of their trade mark for the provision of online retail sale of tennis goods, [he] would assume that other trader [was] a subsidiary or distributor for the Tennis Warehouse business". Mr Jackson reiterated this opinion in cross-examination. 177 Mr Balestrat gave evidence that he had been involved in tennis for over thirty years and ran a business manufacturing, repairing and selling tennis ball machines and stringing equipment in Melbourne. Mr Balestrat said that he first became aware of Sports Warehouse's "Tennis Warehouse" business over ten years ago when travelling in the United States with his wife, who was a professional tennis player.Since thattime he had regularly purchased tennis gear from the tennis warehouse website and frequently visited that website to find out information on tennis products. He was aware too that numerous other tennis related websites referred back to the tennis warehouse website. 178 Mr Balestrat stated that, when he became aware of the respondent's www.tenniswarehouse.com.au website in 2004, he immediately thought the applicant's US-based business had set up an Australian subsidiary. He defended this position in cross-examination. He agreed that there were differences between the respondent's webpage and the tennis warehouse website home page, having regard to colours, logos, words and word styles, but he said that, despite these differences, the eye-catching element was the name "Tennis Warehouse", and that he would expect there to be some association with the US-based tennis warehouse website. 179 I would over-rule the objection by Fry Consulting to the admissibility of Mr Balestrat's statement in his affidavit as to his reaction on first seeing the respondent's webpage in 2004. I accept that, as Sports Warehouse argued, the evidence is relevant to the issue whether, as at the lodgement date, because of the applicant's use of the trade mark, the trade mark did or will distinguish the designated services as those of the applicant and is thus relevant to the inquiry under s 41(5)(a)(ii) of the Act. 180 Dr Cross, whose evidence was referred to earlier at [158], said that he had been involved in the research of tennis for the past 14 years and knew "a lot more than the average academic about the operation of tennis shops". Dr Cross was interested not only in how the tennis products work, but also in how they were sold, particularly on the web. Dr Cross stated that, about five or six times a year, he visited the applicant's tennis warehouse website for the availability of tennis equipment and that, at other times, he visited the website to view the online forum for popular discussions on technical tennis issues. 181 In cross-examination, Dr Cross stated that he had not "consciously" noted changes in the way the name "Tennis Warehouse" was presented at the tennis warehouse website. Also in cross-examination, when directed to the respondent's home page for "Tennis Warehouse Australia", Dr Cross stated that he would have thought that there was some connection with the US-based proprietor of "Tennis Warehouse". In this regard, he said: All companies have a certain name, a trading name, and to me the words "Tennis Warehouse" because of my familiarity with the company in the United States, means the company in the United States. So Tennis Warehouse Australia implies to me that it's a branch of the American company that's operating in Australia.

Whilst Dr Cross agreed that there were differences between the applicant's and the respondent's home pages in terms of colours and logos, he said that these differences did not impact on his assessment of the connection between the companies. 182 Dr Cross's affidavit included a statement about what he would think if he were "to encounter a retailer of tennis goods operating with or by reference to a name that included as a predominant feature, the phrase 'Tennis Warehouse'". I would uphold the respondent's objection to the admissibility of this statement on the basis that it is too speculative. If it were not inadmissible, I would not attach any weight to the statement. 183 There were two consumer witnesses. Mr Samuel described himself as an avid tennis player, who had been playing tennis recreationally for over twenty years. His evidence was that he first became aware of the tennis warehouse website in 2003 when using an internet search engine and that he had become a regular customer, in the sense that he made from 5 to 8 purchases a year through the website. Mr Samuel also stated that, in September 2008, whilst driving his car, he saw a sign with the words "Tennis Warehouse Australia" on a building in Alexandra Parade, Fitzroy (see [70] above) and that the words "Tennis Warehouse" led him to believe that the US-based proprietor of the Tennis Warehouse business had set up a store in Melbourne. Mr Samuel said, however, that when he went to the Fitzroy store, he knew that it was not the same store as the one associated with the tennis warehouse website. 184 The respondent challenged the admissibility of Mr Samuel's evidence of events after the lodgement date. The applicant responded that evidence tended to show that its trade mark distinguished in 2008, which could provide a basis for the Court to infer that the trade mark was capable of distinguishing the applicant's services at the lodgement date. I accept that evidence of this kind could be relevant on this basis. Mr Samuel's evidence alone would not, however, support any strong inference in this regard. 185 Like Mr Samuel, Mr Weir had played tennis recreationally for the past decade and had purchased tennis products over the internet. Mr Weir became aware of the tennis warehouse website in 2004 and, in that year, he made his first purchase from there. Mr Weir stated that, when he chanced upon the www.tenniswarehouse.com.au website of Fry Consulting in 2005 through an internet search engine, his first impression of that domain name was that Tennis Warehouse had set up an Australian subsidiary. 186 I would over-rule the objection made by Fry Consulting the admissibility of this last-mentioned statement. For the reasons already stated, I accept that, as the applicant stated, the evidence is relevant to the issue whether, as at the lodgement date, because of the applicant's use of the trade mark, the trade mark did or will distinguish the designated services as those of the applicant, Sports Warehouse, and is thus relevant to the inquiry under s 41(5)(a)(ii) of the Act. 187 I accept that, as the applicant said, the witnesses all considered the words "TENNIS WAREHOUSE" to be important in distinguishing the applicant's online retailing services. They maintained that, when they first saw the respondent's website, they believed that it was associated with the applicant's online services. Sports Warehouse relied on this evidence to support its contention that, as at the lodgement date, the words "TENNIS WAREHOUSE" did or would distinguish the designated services as being those of its business. 188 Ultimately, though, I would not give a great deal of weight to this trade or consumer evidence. First, the scope of this evidence was very slight. It could not be compared with survey evidence in any real sense. Secondly, the trade witnesses - Mr Jackson and Mr Balestrat - had acquired their knowledge of the Tennis Warehouse business because of the specialist nature of their respective businesses and background. Further, Mr Jackson was neither especially familiar with website use and online retailing nor with the meaning of the word "trade mark" as an indication of origin. Thirdly, Dr Cross did not fit comfortably into the category of trade or expert witness, and nor was he a customer of the applicant. As the respondent said, Dr Cross was not an expert in the sense that he had expertise in the areas of branding, marketing, or as an active participant in the tennis industry. Whilst admitting his evidence, I would not give it much weight. There were merely two consumer witnesses, both of whom were very familiar with the applicant's online retailing services, both before and after the lodgement date. It is difficult to assess the extent to which they would be representative of a wider body of consumers. Further, when Mr Samuel visited the respondent's store, he understood that it was different from that of the applicant's business, despite an earlier misapprehension when driving past. While Mr Weir was initially confused when he saw the respondent's website, he understood that it was a different business. 189 Whilst the evidence of these witnesses assists the applicant's case that, as at the lodgement date, it could be said that the trade mark did or will distinguish the applicant's services, the evidence does so in a general way only. Overall, I would not accord this evidence a great deal of weight. (10) Use by Fry Consulting 190 As we have seen, Fry Consulting used the name "Tennis Warehouse" on its website from September 2004 until late December 2004, when it substituted the name "Tennis Warehouse Australia". The company was using the domain name www.tenniswarehouse.com.au in or shortly after September 2004. 191 Sports Warehouse submitted, first, that the respondent's reputation in the trade mark was irrelevant for the purposes of assessing its case under s 41(5) of the Act. Second, if it were relevant, then, so the applicant submitted, the respondent's reputation must: (1) be clearly proven so as to satisfy the respondent's onus; (2) have been established without knowledge of the applicant's use of the trade mark; and (3) have been significant enough, as at the lodgement date, that persons would distinguish between the two reputations rather than consider them to be one and the same. In written submissions, Sports Warehouse argued that: [I]t cannot be the case that reputation of another in the trade mark should defeat trade mark registration pursuant to section 41(5) when such reputation was obtained with improper motive. Furthermore, where the reputation of another is significant not in and of its own right but only by reason of riding on the coat tails of the trade mark applicant's, that should not stand in the way of registration pursuant to section 41(5) of the Act.

Third, Sports Warehouse contended that the respondent's use of the mark simply did not amount to a reputation prior to the lodgement date that could stand in the way of registration. 192 The respondent argued that this case was not concerned with its conduct, but rather it was concerned with the distinctiveness of the mark under s 41(3) or (5). The respondent submitted that its conduct was irrelevant for the purposes of the proceeding. In any event, the respondent argued that mere knowledge of the existence of the applicant's mark could not amount to bad faith or impropriety on the respondent's part, because the words "tennis warehouse" were descriptive of its services and it should be free to use them. The respondent also urged that no adverse inference should be drawn with respect to the respondent by reference to communications between Mr Hightower and Mr Fry in December 2004. Finally, the respondent submitted that the evidence of use of its own mark, even after the filing date, was relevant for the purposes of assessing the likelihood that other traders might wish to use the trade mark without improper purpose. The respondent added that : The evidence of Fry as to sales from 2005 on … and that of Watson as to Google searches yielding numerous "hits" for the [r]espondent … indicates that the [r]espondent now has a considerable presence on the Australian market under the name "Tennis Warehouse Australia", and this accordingly reduces the claim of the [a]pplicant that its mark "Tennis Warehouse" was distinctive in Australia within the meaning of s 41(5) as at August 2005, or that this has subsequently become the case.

(There was evidence of various internet searches before the Court. I have not referred in detail to them all. I mention them in these reasons only in so far as relevant to the disposition of this proceeding.) 193 It is unnecessary to deal with all these arguments. I have already considered the effect of the respondent's conduct on the application of the test in Clark Equipment: see [104]-[105] above. 194 It suffices to say that, prior to the lodgement date, evidence of the respondent's use of the mark was quite insufficient to prevent the applicant from making out its case under s 41(5) if the applicant's case had otherwise been made out. The respondent's sales in 2004 were very slight and, although considerably more in 2005, the evidence did not indicate what proportion of the respondent's sales occurred prior to the lodgement date. By August 2005, the respondent had spent very little on marketing and advertising. There were apparent differences between the applicant's and the respondent's webpage presentation of themselves. Prior to 18 August 2005, the name "Tennis Warehouse Australia" with a tennis ball device appeared on the respondent's invoices. The device also appeared on respondent's website. This evidence fell a long way short of establishing the kind of case with which the Court was concerned in Colorado (at 254 [30] (Kenny J), 257 [41] (Gyles J), 278 [131]-[135], 284 [180]-[181] (Allsop J)). In view of the conclusion I have reached with respect to the applicant's case (see below), it is unnecessary to consider what, if any, inferences might be drawn from the post-lodgement evidence concerning the respondent. (11) Summary 195 Given the low level of distinctiveness of the trade mark TENNIS WAREHOUSE, the applicant's evidence as to its use of the trade mark (whether before or after the lodgement date) and the evidence as to other matters (referred to above) are insufficient to satisfy me that as at the lodgement date it could be said that the trade mark distinguishes or will distinguish the applicant's designated services from the services of other traders. 196 There was evidence militating in favour of the applicant, but this was insufficient. That is, there was evidence of the use of the trade mark on the tennis warehouse webpage from 1998 until the end of 2002. There was evidence of the consistent use of the trade mark in the tennis-warehouse domain name. There was also evidence of use of the trade mark in advertisements in the magazine "Tennis" from 1998 until the time of trial, although the circulation of the magazine in Australia was not established. From 2003, however, there was no clear evidence of the use of the words "TENNIS WAREHOUSE" in the absence of the "TW" logo on the tennis warehouse website. Instances of alleged third party internet use of the trade mark, the promotional emails and promotional gifts provided little support for the proposition that the words "TENNIS WAREHOUSE" were being used as a trade mark in their own right. The use of the trade mark upon invoices and packaging was not a use "in the course of trade" for the purposes of s 17 of the Act. The evidence of the trade and consumer witnesses assisted the applicant's case, but only in a general way and, as indicated, I would not accord this evidence much weight. Moreover, given the relatively low level of distinctiveness of the trade mark and the uncertainty of the trade mark use in Australia, especially from 2003, evidence as to the volume of traffic between Australian customers or Australian internet users and the tennis warehouse website cannot meet the deficiencies in the applicant's case, for the purpose of showing capability to distinguish arising from use of the trade mark.

I. CONCLUSION 197 Having regard to the combined effect of the extent to which the trade mark is inherently adapted to distinguish the designated services, the applicant's use of the trade mark, and the other circumstances to which I have referred, I am not satisfied that, as at the lodgement date, it could properly be said that the trade mark distinguishes or will distinguish the designated services as being those of Sports Warehouse. Sports Warehouse has not made out its case under s 41(5) on the balance of probabilities. It follows from s 41(5)(c) therefore that the mark "TENNIS WAREHOUSE" is taken not to be capable of distinguishing the designated services of Sports Warehouse from the services of other persons and should not be registered. I would therefore dismiss the application that constitutes the appeal. I propose to order that the applicant pay the respondent's costs, subject to any submissions the parties may wish to make.

I certify that the preceding one hundred and ninety-seven (197) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

Trade Marks Act 1995(Cth)ss 7, 17, 41, 56, 197

Trade Mark Regulations 1995(Cth)

Business Names Act 1962(Vic)

Trade Practices Act 1974(Cth)

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