Starr Partners Pty Limited v Dev Prem Pty Ltd

Federal Court of Australia (Full Court)|2007-03-28|Before: Stein JJ, Finkelstein JJ

Introduction 1 The appellant, Starr Partners Pty Limited, appeals from an order of a Judge dismissing its application for relief in respect of alleged infringement of its registered trade mark by the respondent, Dev Prem Pty Ltd (Starr Partners Pty Ltd v Dem Prem Pty Ltd (No. 2) (2006) 70 IPR 113; [2006] FCA 1269). 2 The primary proceeding was brought against the respondent and two of its directors, not only in respect of alleged infringement of trade mark under s 120 of the Trade Marks Act 1995 (Cth) ("the Act"), but also for contravention of s 52 of the Trade Practices Act 1974 (Cth) and for passing off. The appellant sought injunctive relief, damages, an account of profits, interest and costs. 3 By the time the proceeding came on for hearing, the appellant had discontinued as against the two directors, was pursuing only its claim of infringement of trade mark, and was seeking only an injunction and costs.

Background 4 The appellant carries on a real estate franchise business in New South Wales under the name "Starr Partners" and has done so since 1992. It has 36 franchisees carrying on business in the State under that name. 5 Since 18 January 1999, Starr has been the registered owner of trade mark No 783181 which is as follows: As can be seen, the registered mark comprises a partial star device (with shadow) and two words, the word "Starr" being a proper noun and the word "Partners" being a common noun. Taken together, "Starr Partners" refers to the owners or structural identity of the business, as, for example, "Star and Co" might do. 6 The registered mark is not coloured. It is "black and white" as appears above. 7 The mark is registered for goods and/or services in various classes, including classes 35, 36, 37 and 42, all of which, in various ways, are services in relation to real estate. 8 The respondent carries on business as a real estate agent in certain northern suburbs of Brisbane under the name "Star Realty". In the course of its business it has been using the following unregistered device and word mark: 9 Like the appellant's registered mark, the respondent's unregistered one comprises a partial star device and two words. As in the case of the appellant's registered mark, the initial letter "S" is larger than the other letters of the first word. That letter intrudes into the star device more than the "S" in the appellant's registered mark does (if it does so at all). The word "Realty" describes the nature of the respondent's business activity. 10 In the case of the respondent, the partial star device and the words "Star" and "Realty" appear in white against a deep blue solid background. 11 The respondent has been using its mark in relation to services in respect of which the appellant's mark is registered (see s 120(1) of the Act), and services of the same description as that of services in respect of which the appellant's mark is registered (see s 120(2) of the Act). Nothing has turned on the defence provided to a claim of infringement in s 120(2) of the Act, and the case was fought as a s 120(1) case. 12 Under s 120(1), there was infringement if the respondent used as a trade mark a sign that was "substantially identical with" or "deceptively similar to" the appellant's registered mark in relation to services in respect of which the latter was registered. 13 The expression "deceptively similar" to is defined in s 10 of the Act as follows: For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion. 14 It was not in dispute that the respondent had been using its mark as a trade mark. In its defence, the respondent admitted that it had used its mark in advertising, letterheads, business cards and brochures in the south east Queensland area. 15 The primary Judge found that the respondent's mark was neither "substantially identical with" nor "deceptively similar to" the appellant's registered mark. On the appeal, the appellant did not contest his Honour's conclusion in relation to "substantial identicality" and relied only on deceptive similarity.

Reasoning of the Primary Judge 16 His Honour discussed the meanings of the expressions "substantially identical with" and "deceptively similar to". He referred to the discussion of both expressions by Windeyer J in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414-415. In particular, he referred to Windeyer J's "side by side comparison" test of substantial identicality, and his Honour's statement that deceptive similarity, in contrast, involved questions of recollection, memory and impression. 17 In a passage criticised by the appellant, the primary Judge said that the test for deceptive similarity is "one of impression based on recollection: … which will be an imperfect recollection, measured against a standard of side by side comparison" (at [44]). The appellant submits that this passage shows that his Honour erred by basing the test of deceptive similarity on a side by side comparison. 18 We reject the criticism: the passage quoted does not show this. His Honour's reasons demonstrate that he appreciated that whereas a side by side comparison was an appropriate description of the approach to be taken to the issue of substantial identicality, something different was involved in determining whether there was deceptive similarity. We are inclined to think that in referring to "an imperfect recollection, measured against a standard of side by side comparison", his Honour meant "an imperfect recollection, contrasted with a standard of side by side comparison". However, even if he meant that a side by side comparison had some role to play in the test of deceptive similarity, we would not disagree with him. A side by side comparison is the starting point, but only the starting point, for the test of deceptive similarity. Section 10 of the Act makes this clear. It is only possible to determine if two trade marks "resemble" one another by a side by side comparison of the two. The point is that the side by side comparison is all that is involved in the test of substantial identicality (although even in a side by side comparison, it is appropriate to allow for differences in the significance of, and weight to be given to, different features), but a side by side comparison is only the beginning of the inquiry as to deceptive similarity, which goes to the effect that resemblance will be likely to have on relevant minds in terms of recollection and impression. 19 While we reject the criticism made by the appellant of the passage set out above, the question remains whether his Honour did in fact err by giving too much weight to the differences in the content of the two marks. The differences that were influential were the presence of the word "partners" in the appellant's mark and "realty" in the respondent's mark, the different spellings of "Starr" and "Star", and the differences between the star logos. The primary Judge thought it important that the words "Starr Partners" and "Star Realty" were neither aurally nor visually similar. He likened the case to the dispute about the names "Rain King" and "Rainmaster" considered by the High Court in Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 at 538-539. 20 In the result, his Honour concluded that the visual and aural differences between the two marks were too great for there to be a real and tangible danger of deception or confusion, and that while one could not reject the possibility of deception or confusion, a mere possibility was not sufficient.

Reasoning on the Appeal 21 The test for deceptive similarity and the cases that have articulated the test are well known and need not be repeated. Having regard to the way the primary Judge approached his task, we think it is worthwhile making one or two points about the test. We will be brief. 22 The first step in the analysis is to identify the impression produced by the registered mark considered in its entirety. Similarity is not based on only part of the registered mark. On the other hand, when one decides upon the impression produced by that mark it is not improper to give more or less weight to particular features of it, provided the ultimate conclusion is based on a consideration of the mark in its entirety. This approach does no more than recognise that one word or feature of a mark can be more striking and memorable than another. This kind of analysis appears not to have been the approach taken by the judge. 23 It may also be appropriate when comparing the registered mark with the allegedly infringing mark to have regard to the pronunciation of words in the mark or any verbal translation of devices. But a comparison based on sounds is likely to be important only if the goods or services to which the mark relates are acquired by reference to words based on the mark. For example, one might commonly hear a person say "Can I have a Coke?" but not "We need to find a new tenant, let's call Star Realty". Put in another way, phonetic similarities and differences will not have a large role to play if words in the mark are not usually spoken or devices in the mark are not usually orally conveyed. 24 The final point we wish to mention arises from one of the appellant's submissions. It was said that the comparison required to determine deceptive similarity is between the registered mark as used and the allegedly infringing mark. The appellant drew attention to the fact that its mark was applied in a particular shade of blue, and, as we have mentioned, the respondent's mark appeared in white against a blue background. The appellant's argument cannot be accepted. In a trade mark case, the impression or recollection of the registered mark must be of the mark as registered. Naturally, the position is different in a passing off case or a case under s 52 Trade Practices Act 1974 (Cth). Nonetheless, the commercial setting in which the two marks are used can be relevant. For example, the strength or fame of the registered mark can be a relevant factor, as can be the similarity of the goods or services to which the marks in question are applied, and even the geographic area in which the marks are used. One could add to the list of potentially relevant factors the relationship between the parties' forms of advertising (whether the marketing takes place through the same media) and their respective channels of distribution (whether they are the same or similar). Conversely, if the marks are not encountered together, minor differences in style will not count for much. 25 Returning to the case at hand, we think that the respondent's mark so nearly resembles the appellant's registered mark that it is likely to deceive or cause confusion. 26 Because the likelihood of deception or confusion must be assessed in the light of the imperfection of human recollection, where a trade mark includes both common and uncommon words, the uncommon words (such as "Star" or "Starr") will be the more memorable, and therefore significant for infringement purposes, than the common words (such as "Partners" or "Realty"). 27 The hypothetical person will have seen both marks. He or she may have seen both of them some time before the hypothetical moment at which the likelihood of deception or confusion is to be assessed, or he or she may have seen one or both of them only a short while before that moment. For some people the spelling of the family name "Starr" with its double "r" ending and the associated play on the "star" idea will be more striking than it will be for other people. Sensitivity to such matters differs widely in the community.

Essential features 28 The essential features of the two marks are the star device, its close relationship with the initial capital letter "S", and the idea or concept of a star. One does not expect to encounter such features as a matter of course in the advertising of a real estate agency, whereas the word "realty" is unremarkable in that context, and the word "partners" almost equally so. 29 The appellant has taken advantage of the association between the family name "Starr" and the idea of a star. By doing so, and juxtaposing the word "Starr" and the star device, it has drawn attention away from the double "r" ending of "Starr" as signifying a family name in favour of the star device and the capital letter "S".

Inessential features 30 While the word "Partners" differs from "Realty", the question is whether the two words would make such a lasting impression on the hypothetical reader's mind that he or she would not be likely to be deceived or confused. We do not think they would do so. 31 It must be remembered that both marks would be used in relation to real estate services. This consideration reduces the effect of the presence of the word "realty" in the respondent's mark: the reader knows from the context that the business entity in question is engaged in "realty" business. 32 Similarly, the word "Partners" in the appellant's registered mark is not distinctive. While it is encountered less frequently than "Pty Ltd" of "and Company", it is far from arresting and is certainly not calculated to cause the reader to ponder the form of business structure adopted by the appellant. The word "Partners" would not be remembered as indicating one form of business structure as distinct from another. Indeed, the respondent is a proprietary company, not a partnership. The word "Partners" is a fairly non-descript term that does not seriously convey much meaning more than "and Company". It would be forgotten very soon after being read. 33 In sum, a reader would gloss over the words "Partners" and "Realty", and would be likely to remember only the star device and a "star kind of word" associated with it as the mark of a real estate agency.

The question of aural infringement 34 The appellant's registered mark includes the partial star device: it is not simply "Starr Partners". The question before his Honour was whether "the registered trade mark" had been infringed, not whether only part of it had been, and whether it had been infringed by the respondent's mark taken as a whole. 35 Although there was a passing reference to aural similarity in his Honour's reasons for judgment, it was only visual representations of the respondent's mark that were pleaded (and admitted by the respondent in its defence). Therefore any question of aural similarity may be put to one side.

Role of appellate court 36 We are conscious of cautions against a too ready interference with the view of a primary Judge in matters of impression, but we are, with respect to his Honour, sufficiently clearly convinced that his Honour erred in over-emphasising a literal and side by side comparison of the respective marks at the expense of considerations of imperfect recollection, that we consider we should interfere.

Conclusion 37 The appeal should be allowed with costs; the primary Judge's order of dismissal and order that the appellant pay the respondent's costs should be set aside; there should be injunctive relief as sought below; and an order that the respondent pay the appellant's costs of the proceeding at first instance. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate: Dated: 28 March 2007 Counsel for the Appellant: Mr DB Studdy

Trade Practices Act 1974(Cth)

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