Telstra Corporation Limited v Phone Directories Company Australia Pty Ltd

Background 17 Telstra has been producing telephone directories since 1906 through its predecessors, by itself and through its wholly owned subsidiary Sensis. It had a statutory monopoly on telephone communications in Australia until the early 1990s, and it had a marked advantage over any competitors in relation to telephone directories as it held the information necessary to produce them. 18 Telstra changed from using pink coloured paper to using yellow coloured paper in its print business directories in 1975, and from that date it branded it directories "Yellow Pages". The primary judge found that over the years since then, it has had a strong yellow-related theme in its branding, including yellow coloured pages and yellow covers on its print business directories, and yellow branding on its online directory website. In 1977, it registered the composite YELLOW PAGES trade mark associated with the Walking Fingers device and, in 1990, the words YELLOW PAGES. Since 1977, it has registered numerous YELLOW PAGES trade marks, together with a number of others which have the word yellow as one of its elements. 19 Until about 1987, Telstra had no real competition in respect of the production and distribution of telephone directories. From that date, BIG Directory commenced operations in Melbourne, and then in capital cities and regional centres around Australia, and it continued until 2002. Since 1993, Telstra has also been in competition with PDCA which produces and distributes print business directories for regional markets in Queensland, Northern Territory and New South Wales, and operates an online directory covering the same areas. Due to Telstra's trade marks, PDCA did not name its directories YELLOW PAGES, but over the years it too had yellow coloured pages and yellow covers on its print business directories, yellow branding on its online directory, and yellow corporate branding. The primary judge found that other business directories around Australia have done the same. One directory was named YELLOW DIRECTORIES for about three years until made to cease by Telstra. Yellowbook has operated a small online directory at www.yellowbook.com.au since 2006, and applied to register yellowbook.com.au as a trade mark. 20 The primary judge found that by 25 July 2003 when Telstra applied to register the word YELLOW as a trade mark, it owned and had traded extensively under various YELLOW PAGES trade marks, and it had conducted extensive marketing campaigns around YELLOW PAGES and other trade marks, including HELLO YELLOW. 21 After Telstra had lodged its application to register the YELLOW trade mark, it initially did nothing with that mark. It registered and used other trade marks, including FIND IT IN YELLOW, YELLOW with a Walking Fingers device, YELLOW 12456 with a Walking Fingers device, WELCOME TO THE WORLD OF YELLOW, and YELLOW WORLD. In February 2006, it also applied to register the colour yellow as a trade mark. 22 In May 2006, it decided to refresh its brand by making YELLOW rather than YELLOW PAGES the overarching or "umbrella" trade mark of its designated goods and services. From September 2006, it conducted an extensive $20 million campaign to rebrand its print and online business directories as YELLOW, and it used the YELLOW trade mark as its principal brand for about the next three years. However, in 2009 it abandoned the YELLOW mark as its principal brand and returned to using YELLOW PAGES. 23 The primary judge made detailed findings about Telstra's pre-Lodgement and post-Lodgement Date use of the word yellow, and the pre-Lodgement and post-Lodgement Date use of the colour and word yellow within Australia and overseas in connection with print and online directories. The findings were based on the evidence of nine witnesses called by PDCA and Yellowbook, and four witnesses called by Telstra, and a reasonably significant volume of documentary evidence. It is necessary for us to identify some but not all of the witnesses. 24 We start with the witnesses called by PDCA and Yellowbook. Mr Geoffrey Moule was the former credit manager of Business Marketing Australia Pty Ltd ("BMA") and he gave evidence about BMA's publication of its BIG Directory in capital cities and regional centres in Australia from 1987 to 2002. Ms Catherine McGarry was the general manager of Local Directories Pty Ltd which was a related company of PDCA and she gave evidence about the PDCA group's publication of print and online directories for various parts of the Northern Territory, Queensland and New South Wales from 1994 to the present. Her evidence was also relevant to the use of the colour and word yellow in Australia and overseas in respect of directories. Ms Dale Kerferd was the managing director of Sound International Pty Ltd trading as RMK Directories and she gave evidence about the company's publication of print and online directories covering the communities of Rockingham, Kwinana and Mandurah, Western Australia from 1985 to the present. Mr Darren Lee was the managing director of Market Creations Pty Ltd ("Market Creations") and he gave evidence about the company's publication of regional and community directories in various regions in Western Australia from 1985 to the present. 25 We turn now to the witnesses called by Telstra. Ms Michelle Sherwood was employed by Sensis in a position entitled Executive General Manager - Strategic Marketing and she gave evidence about the evolution of Telstra's trade marks and its use of the YELLOW mark. Mr Stephen Harvy was employed by Sensis in a position entitled Group Manager of Distribution and he gave evidence as to the evolution of Telstra's trade marks, its use of the YELLOW mark and various marketing campaigns in support of its trade marks. 26 The next two sections of these reasons are based on the primary judge's findings, most of which are not challenged on the appeals. We will identify the challenge where there is one. 27 The first section deals with Telstra's use of the word yellow before 25 July 2003. That use, together with the use of the colour and word yellow by other traders, is relevant to the issues that arise under s 41(3). It is also relevant to the issue which arises under s 41(5) (see s 41(5)(a)(ii)). Before the primary judge, it was also relevant to the issue which arose under s 41(6), but as we have explained, that is not an issue on the appeals. The second section deals with Telstra's use of YELLOW after 25 July 2003. As we will explain, use of the trade mark after the Lodgement Date can be relevant to the issue which arises under s 41(5).

Telstra's use of the word yellow before 25 July 2003 28 In 1975, Telstra began publishing its classified telephone directories on yellow paper and it renamed its directories the YELLOW PAGES. In 1977, it registered a composite trade mark featuring its Walking Fingers logo and the words YELLOW PAGES, as follows: 29 Telstra registered what the primary judge described as YELLOW PAGES trade marks over the period from 1977 to 25 July 2003 as follows: Trade Mark No. Mark Status 304264 Registered from 1977 387413 Registered from 1983 478792 Registered from 1987 478793 Registered from 1987 478794 Registered from 1987 507905 TALKING YELLOW PAGES Registered from 1989 507906 TALKING YELLOW PAGES Registered from 1989 507907 TALKING YELLOW PAGES Registered from 1989 545667 YELLOW PAGES Registered from 1990 545668 YELLOW PAGES Registered from 1990 545669 YELLOW PAGES Registered from 1990 558728 Registered from 1991 558729 Registered from 1991 558730 Registered from 1991 705463 Registered from 1996 704079 YELLOW PAGES Registered from 1996 710697 Registered from 1996 820729 Registered from 2000 820731 Registered from 2000

30 At the beginning, Telstra only produced its directories for capital cities. By 1986, it was producing directories for regional areas and by 1994 it was producing directories for local areas within major capital cities. 31 The evidence before the primary judge was that from 1975 to 1996 Telstra distributed approximately 231 million YELLOW PAGES directories to Australian businesses and households, and it spent more than $200 million in the same period promoting the YELLOW PAGES brand. The primary judge found that Telstra's marketing campaigns were very successful, and he noted that in 2003, the Superbrands Council, an independent body of marketing, communications and business experts, described the YELLOW PAGES as "one of Australia's most loved and memorable brands". 32 In the early 1980s, Telstra launched an extensive marketing campaign for its YELLOW PAGES directories using the slogan "HELLO YELLOW". It screened over 450 commercials on Australian television between November 1982 and June 1983 and it ran over 1,200 30 second radio advertisements in Sydney alone from 1982 to 1984. It mailed out about 100,000 letters and brochures to Australian businesses and consumers which featured the appearance of a YELLOW PAGES print directory and a YELLOW PAGES trade mark. The primary judge said that it was clear from the brochures that the campaign was aimed at increasing usage of the YELLOW PAGES print directory. 33 The primary judge said that Mr Harvy gave evidence to the effect that the HELLO YELLOW advertisements referred to yellow on its own, and the judge recorded the fact that five television advertisements were tendered in evidence. His Honour set out two examples of the television advertisements which were part of the HELLO YELLOW advertisements and which Mr Harvy claimed referred to yellow on its own. It is unnecessary for us to set out the details of those advertisements because the primary judge's finding with respect to those advertisements is not challenged by Telstra. His Honour found that, contrary to Mr Harvy's evidence, the commercials did not use the word yellow standing alone. He found that the word yellow was only used in the jingle as part of the phrases "Hello Yellow" or "Hello YELLOW PAGES". He found that this illustrated that yellow was merely a shorthand reference to YELLOW PAGES. He noted that Mr Harvy conceded that the reference to yellow in the trade mark HELLO YELLOW was "clearly and obviously a reference to YELLOW PAGES directories". 34 The primary judge said that Mr Harvy gave evidence of other television advertisements in the HELLO YELLOW campaign, including advertisements named "Yellowmania", "Goggomobil", "Train Set", "Lamp", and "Leak". Again, the primary judge set out an example of one of the advertisements. Again, it is not necessary for us to set out the details because the primary judge's finding is not challenged by Telstra. His Honour found that the advertisements did not use the word yellow standing alone, and that it was used only as part of the phrase "HELLO YELLOW". He found that the advertisements in the HELLO YELLOW campaign referred to the YELLOW PAGES trade marks rather than to YELLOW as a badge of origin. He noted that the print advertising in the HELLO YELLOW campaign also featured a YELLOW PAGES composite mark, including the Walking Fingers logo. 35 The primary judge found that following the use of the slogan HELLO YELLOW in the HELLO YELLOW campaign, Telstra registered HELLO YELLOW as a trade mark in 1990. The primary judge noted that by this time Telstra was facing competition in the market for directories, and he referred to the directories being published by BIG Directory in 1987, and PDCA's launch of its first directory in 1993. 36 In 1993 to 1994, Telstra launched an operated assisted directory service named HELLO YELLOW which allowed consumers to obtain information about businesses advertising in the YELLOW PAGES directories and to be connected directly through to the chosen business. The operator would welcome customers who telephoned the service with the words, "Hello Yellow, how can I help you?". The primary judge said that importantly the operated assisted directory service changed its name to YELLOW PAGES Direct from 1997 and to YELLOW PAGES Connect from 2001 to 2002. The primary judge inferred that the HELLO YELLOW operated assisted directory service only ran for three or four years and the use of "Hello Yellow" in the greeting by the operator ceased with the change of name in 1997. 37 The primary judge referred to the evidence of Ms Sherwood who joined Telstra in 2002. At that time the print directory and online directory businesses were separate. Ms Sherwood gave evidence that it was commonplace for employees in the online directory marketing and sales teams to refer to the online business as "Yellow" and that she referred to it in that way. The primary judge accepted Ms Sherwood's evidence that it was common practice for employees in the online business to introduce themselves as being from "Yellow" when calling customers and potential customers, even though the internet address of the online directory was www.yellowpages.com.au. 38 In 1994, Telstra established an online directory under the YELLOW PAGES trade marks at the domain name previously referred to. Telstra operated an online directory at this internet address under the YELLOW PAGES brand for 19 years from 1994 to 25 July 2003. During this period, Telstra distributed between about 11 and 14 million YELLOW PAGES directories per year to Australian businesses and households. 39 In the early 2000s, there were discussions within Telstra about refreshing Telstra's YELLOW PAGES brand. The primary judge accepted the evidence of both Mr Harvy and Ms Sherwood to the effect that the refreshment of the brand was necessary for Telstra to transfer its considerable reputation in printed directories to its online directories, and to ensure that Telstra's online products were seen as synonymous with its more well-known printed directories. 40 By 25 July 2003, Telstra had registered further trade marks which used the word yellow as an element as follows: Trade Mark No. Mark Status 545658, 545659, 545660 HELLO YELLOW Registered from 1990 545664, 545665, 545666 YELLOWMANIA Registered from 1990 710701 HELLO YELLOW Registered from 1996 796436 Registered from 1999

41 As already noted, on 25 July 2003 Telstra applied to register the YELLOW trade mark in relation to the goods in classes 9 and 16 and the services in classes 35, 38, 41 and 42.

Telstra's use of YELLOW after 25 July 2003 42 Telstra registered the following relevant trade marks after 25 July 2003: Trade Mark No. Mark Status 1042570 FIND IT IN YELLOW Registered from 2005 1120486 Registered from 2006 1222378 Registered from 2008 1268043 Registered from 2008 1275292 Welcome to the World of Yellow Registered from 2008 1275301 Yellow World Registered from 2008 1277458 Registered from 2008

43 In 2003, Telstra began planning a marketing campaign to promote its directories on television, print and online media centred around the slogan FIND IT IN YELLOW. The primary judge found that this campaign was intended to encourage consumers to use Telstra's various YELLOW PAGES products and to reinforce the message that there was an online equivalent to the printed directory. The campaign was launched in February 2005, and it ran until June 2006. It involved a marketing campaign which cost Telstra approximately $9 million. As set out above, in 2005 Telstra registered FIND IT IN YELLOW as a trade mark. 44 The primary judge said that Telstra's case was that the FIND IT IN YELLOW campaign involved the use of the word yellow standing alone. Its case was that the campaign focused on just the word yellow rather than on YELLOW PAGES, and showed confidence that consumers would recognise the YELLOW PAGES directories simply by using the first word of that trade mark. Telstra's case was that the use of the word YELLOW rather than YELLOW PAGES in the phrase FIND IT IN YELLOW was intended to encapsulate the portfolio of products it offered and to focus the marketing on a theme that had been common to preceding advertising campaigns. 45 The primary judge analysed these contentions. He found that the FIND IT IN YELLOW campaign consisted of five separate phases and that it used a range of media. He addressed each phase and the market research conducted by Telstra at or about the time of various phases. It is not necessary for us to set out the details. 46 The primary judge addressed Telstra's evidence concerning the launch of the YELLOW trade mark. Again, it is not necessary for us to set out the details. He said that in September 2006 Telstra relaunched its print and online YELLOW PAGES directories as YELLOW directories. He said that the effect of the evidence of Mr Harvy and Ms Sherwood was that they considered the evolution and prominence of the YELLOW PAGES trade mark meant that the word YELLOW had, by extension, become a recognisable brand element by which consumers would recognise its business directories across all types of media. 47 The primary judge said that it was not in contention that from September 2006 Telstra used the YELLOW trade mark as the overarching brand of its directories and related goods and services. 48 The primary judge noted that the launch of the YELLOW mark was accompanied by significant press attention. In the 2006/2007 financial year, Telstra allocated a budget of nearly $20 million to the campaign. The word YELLOW featured prominently on the home page and each subsequent page of Telstra's online directory, and the domain name was changed to www.yellow.com.au. The primary judge found that the launch was accompanied by a refreshment of the branding of other Telstra and electronic products and services, including the following: (1) HOME AT YELLOW, a website launched in July 2006 to provide users with in depth information relating to home renovations; (2) YELLOW MOBILE, an application allowing mobile phone users to browse Telstra's business listings online via their phone; and (3) YELLOW IN THE CAR, a glove box sized print directory. 49 The primary judge referred to the evidence of Mr Harvy to the effect that the first advertising campaign using the YELLOW trade mark was called "Search by Suburb", which ran between September and December 2006. He found that the objective of this campaign was to introduce the new overarching YELLOW trade mark and to maintain and increase usage of YELLOW products by both consumers and advertisers. The campaign involved the use of print media, flyers, television advertisements and online advertisements, and was conducted at a cost of $3.3 million. The advertisements consistently made prominent use of the YELLOW trade mark and the colour yellow, sometimes with the Walking Fingers trade mark. Phrases such as "They come out of YELLOW", "Welcome to the world of YELLOW", "Open new doors with YELLOW" and "Get online with YELLOW" were used to reinforce the new brand. 50 The primary judge found that from January to February 2007, Telstra ran the ORIGAMI campaign in the Melbourne and Sydney markets. He referred to the evidence of Mr Harvy to the effect that this campaign was aimed at increasing the use of YELLOW print directories and improving the perceptions of consumer usage among advertisers. The budget of $1.4 million was spent on a variety of print media, television and radio advertisements. Some of the advertisements were targeted at consumers encouraging them to search the directories, and others were targeted at businesses encouraging them to use the YELLOW products to promote their goods and services. The primary judge found that the advertisements showed a consistent use of the YELLOW trade mark in some way, both alone and sometimes accompanied by the Walking Fingers trade mark. He found that the campaign had considerable reach and he gave an illustration of Telstra distributing 45,000 "Yellow Regional Ad Options" brochures, 30,000 "How to design an effective advertisement", and 25,000 "Yellow Mobile" brochures. 51 The primary judge found that from April 2007 Telstra conducted the YELLOW INTEGRATED campaign which was intended to increase awareness and use of YELLOW products. He referred to the marketing brief which identified the primary objectives of the campaign as being to: (1) increase consideration of the YELLOW directories from 45% in February 2007 to 50% in June 2007; (2) increase consideration of the YELLOW brand from 72% in February 2007 to 79% in June 2007; and (3) remind consumers of the benefits of using the YELLOW directories. 52 The primary judge found that the strategy of the YELLOW INTEGRATED campaign was to identify the most valuable consumer and advertiser categories within the directories and to relate these to common real life situations. The budget of $8.3 million funded advertisements in print media, television, radio and outdoors. The YELLOW INTEGRATED campaign was nationwide in its coverage. The most prominent component was the "Need a hand?" television advertisements and corresponding radio advertisements depicting a scene in which a person encountered a succession of problems while renovating their home which were resolved by obtaining assistance through the YELLOW directory. The television commercial was screened over 7,000 times. 53 In 2008, Telstra conducted the Chicken Boy campaign. This campaign featured a boy in a chicken suit and the tagline "How will you get noticed if you're not in Yellow?" The total cost of the campaign was approximately $3.6 million. Television was the primary medium and between May and August 2008 the advertisement was screened 6,500 times in metropolitan areas alone. The advertisements featured the YELLOW trade mark in conjunction with the Walking Fingers logo. There were corresponding radio, outdoor, paper and internet advertisements mimicking aspects of the television advertisement. Post-it notes were also distributed bearing the phrase "How will you get noticed if you're not in Yellow?" featuring the YELLOW trade mark accompanied by the Walking Fingers Logo. 54 The primary judge said that it was significant that Telstra adduced no cogent evidence to establish the different YELLOW campaigns such as "Search by Suburb", YELLOW INTEGRATED, and Chicken Boy were effective in changing consumers' understanding of the origin of its print and online directories from the well-recognised YELLOW PAGES brand to YELLOW. 55 Telstra conducted research into the success or otherwise of its campaigns. A market research company, TNS, was commissioned by Telstra to conduct consumer surveys covering the period from July 2006 to June 2007. TNS provided a report setting out the survey results in June 2007 ("June 2007 TNS Report"). The report covered the timeframe over which Telstra ran the YELLOW campaign and it reported on the level of consumer recognition of YELLOW printed and online directories. The primary judge set out the results of the survey. He said that consumers were asked, without prompting, about which services they were aware of which could help them find information within Australia. The June 2007 TNS Report stated that out of almost 1,000 respondents, 0% were aware of the YELLOW directory; only 3% were aware of yellow.com.au, and where YELLOW was recalled by a consumer, that recall was typically accompanied by a direct or indirect reference to YELLOW PAGES. The primary judge said that the 2007 report recorded a negligible level of unprompted consumer awareness of YELLOW directories despite the extensive $20 million YELLOW campaign. 56 The primary judge said that it was significant that when the survey taker prompted the consumer by mentioning, amongst other things, the YELLOW PAGES directories, 79% of the respondents said that they were aware of the YELLOW directory. However, he said that because this only arose from prompting, the survey indicated a low level of unaided consumer recognition of the YELLOW brand. 57 The primary judge also referred to a statement in the 2007 June TNS Report to the effect that 48% of respondents had a spontaneous awareness of what the report described as "Nett Yellow". The primary judge said that Telstra's reliance on this statement was quite misplaced because the figure of 48% spontaneous awareness of "Nett Yellow" was just an aggregation of the negligible recognition of YELLOW products with the higher levels of recognition of YELLOW PAGES, YELLOW PAGES Metro Directory, YELLOW PAGES Local Directory, and www.yellowpages.com.au. 58 In 2009, Telstra abandoned the YELLOW trade mark as the umbrella brand for its directories and related goods and services. The primary judge rejected evidence of Mr Harvy and Ms Sherwood to the effect that the YELLOW campaign did not fail. He inferred from the circumstances, particularly what he described as the inherent descriptiveness of the YELLOW mark, the June 2007 TNS Report, and Telstra's decision to abandon the mark despite spending almost $30 million on the FIND IT IN YELLOW and YELLOW campaigns, that it did not operate to distinguish Telstra's goods and services to a sufficient degree. 59 The primary judge turned to consider the use of the colour and word yellow by other traders in Australia both before and after 25 July 2003.

The use of the colour and word yellow within Australia before 25 July 2003 60 The parties put before the primary judge a document which recorded their agreement of facts relating to the use of the colour and word yellow in respect of third party directories (i.e., directories prepared and published by parties other than Telstra). After referring to this document, the primary judge set out his findings in relation to the evidence of other traders. On the appeals, Telstra did not challenge these findings. Rather, it submitted that the primary judge failed to refer to other evidence given by the witnesses or did not properly apply the onus of proof. 61 Mr Moule said that from 1987 BMA published "The Melbourne BIG" directory annually in Melbourne and in about 1991, the name of the directory was changed to "BIG Colour Pages" ("the BIG directory"). Over the period from 1991 to 1997 the geographical coverage and distribution of the BIG directory expanded until it was published annually in Melbourne, Sydney, Perth, Brisbane, Gold Coast, Sunshine Coast, Northern Territory, Adelaide, Hobart, Northern NSW, Cairns, Townsville, Wollongong and Canberra. During the period from 1997 until 2002 when publication and distribution of the BIG directory ceased, BMA distributed approximately 3.5 million BIG Directories nationwide each year. From its inception, BMA used yellow pages in the business directory section of the BIG directory. BMA's decision in about 1986 to use yellow pages was made because yellow was accepted worldwide as the industry standard colour used for business directories. Yellow was so commonly used in international directories that BMA hardly considered using a different colour. Yellow pages was a good choice for a business directory as black writing on a yellow background stood out. 62 Although Mr Moule accepted that Telstra set the industry standard in Australia, it was not put to him that BMA's adoption of the colour yellow involved an improper motive, and the primary judge found that BMA acted innocently in using the colour yellow as it did. 63 Ms McGarry said that PDCA produced its print directories each year from 1993 in Rockhampton/Gladstone, from 1995 in Alice Springs, from 1996 to 2000 in the Gold Coast, from 1995 to 1996 in the Sunshine Coast, from 1996 in Townsville, from 1997 to 1998 in Cairns and Darwin, from 2001 in Mackay, and from 2003 in Mt Isa. PDCA distributed approximately 1.655 million directories in these regions before 25 July 2003. 64 The primary judge said that the evidence showed that from 1993 until 2003 PDCA's directories: (1) used yellow pages in the business directory section; (2) used yellow as the dominant colour on the covers from 1996; and (3) described the business directory as "Yellow" from 1994 and as the "Yellow Section" from 2000. 65 PDCA also adopted yellow as its corporate colour and had a strong yellow theme in its marketing and signage. 66 In 2001, PDCA established a website at the domain name www.pdc-group.com.au. It made only incidental use of the colour yellow in a header and in an image of a PDCA print directory. The use of the word yellow was confined to references to "yellow page directories" and "Yellow Section". 67 The primary judge rejected a contention advanced by Telstra that PDCA set out to produce directories which resembled Telstra's directories as closely as possible and that PDCA's motive in using the colour and word yellow as it did was improper. He rejected the contention for two reasons. First, he said that PDCA's motives were not improper because the use of the word and colour yellow was widespread overseas and yellow was the industry standard colour for business directories. Secondly, he said he could take little from the cross-examination of Ms McGarry because she was the only employee of PDCA to give evidence and she did not commence employment with the PDCA group until April 1998 when its use of the colour and word yellow was already established. When she did commence employment she did so only as a personal assistant rather than in a senior position. Telstra submits that the primary judge's approach to Ms McGarry's evidence reveals a misunderstanding of the onus of proof. 68 Ms Kerferd's evidence concerning Sound International Pty Ltd's publication of print and online directories covering the communities of Rockingham, Kwinana and Mandurah, Western Australia from 1985 to the present established that these directories: (1) used yellow as the dominant colour on the covers; (2) used yellow pages in the business directory section; and (3) yellow was the dominant colour in RMK's media advertising, corporate and promotional materials, invoices and statements, business cards, staff uniforms, car signage and in corporate sponsorship. The company branding had an unmistakeably strong yellow theme. 69 The primary judge said that the evidence showed that from 1985 to 2000 between 30,000 to 40,000 copies of the directory were distributed each year. 70 The primary judge accepted Ms Kerferd's evidence that RMK chose the colour yellow as a core part of its branding because it stood out and because it was complemented by other colours. He accepted her evidence that she chose yellow because it was a primary colour which worked with other colours, was easily identifiable, and was an appropriate corporate colour. 71 In 2000, RMK registered the business name YELLOW DIRECTORIES and the domain name www.yellowdirectories.com.au. From 2001, RMK published separate print directories for each of the Rockingham, Kwinana and Mandurah regions and also ran an online business directory for those regions. RMK used: (1) yellow as the dominant colour on the covers of the print directories; (2) yellow pages in the print directory; (3) yellow as the dominant colour on the website; (4) a large yellow YELLOW DIRECTORIES on each cover of the print directories, on the title pages and on the base of other pages; (5) the YELLOW DIRECTORIES name prominently on the website; and (6) yellow as the dominant colour in RMK's corporate branding. RMK distributed approximately 180,000 directories under the name YELLOW DIRECTORIES from 2001 to 2003. 72 The primary judge accepted Ms Kerferd's evidence to the effect that in about March 2003, she deregistered the business name YELLOW DIRECTORIES and changed the domain name in response to threats of legal action by Telstra. At Telstra's demand, she gave an undertaking not to use the name YELLOW DIRECTORIES "or any trade mark or name incorporating the word yellow" in respect of directory or similar products or services. She took these steps to avoid costly litigation rather than because she accepted the correctness of the legal position that Telstra asserted. 73 The primary judge accepted Ms Kerferd's evidence that RMK's directories were named YELLOW DIRECTORIES from 2000 to 2003 without reference to Telstra's YELLOW PAGES and that RMK did not have an improper motive in using the colour and word yellow as it did. 74 Mr Lee's evidence established that Market Creations published two regional directories in Western Australia prior to 25 July 2003, namely Karratha & Districts Chamber of Commerce & Industry Business & Community Directory annually in 2000 to 2002, and Mid West Business & Community Directory annually from 1999. 75 Although these directories did not use yellow coloured pages, they did use yellow or a yellow/orange colour coding on the edge of the pages to identify the business directory section. The Karratha & Districts directory referred to that section as the "Yellow Pages". 76 Mr Lee's evidence was that "the public probably looks at the colour yellow as being synonymous with business advertising in these sorts of publications". 77 The primary judge said that Mr Lee did not have an improper motive for using the colour yellow on the business directory or in the use of the words Yellow Pages to describe that section. Mr Lee chose the yellow colour coding in part because of his view that the public saw the colour yellow as being synonymous with business directories. It was not put to Mr Lee that he had an improper motive in choosing the colour yellow. 78 Mr Thomas Greene was the chairman of Horizon Media Pty Ltd ("Horizon") and he gave evidence as to that company's distribution of a direct mail advertising package named The Yellow Envelope throughout Australia from 1997 to the present. It distributed a direct mail package of advertising material and in 1997 its name was The Yellow Envelope Co Pty Ltd. In September 2000, it registered the trade mark "The Yellow Envelope" in class 35 for "unaddressed direct mailer for direct advertisers to regional and rural areas". These services were closely related to Telstra's designated goods of services of "marketing, merchandising, retail and wholesale distribution (excluding transport)" within the same class. 79 From 1997, Horizon distributed an envelope containing direct marketing material to households throughout Australia which prominently featured the words "The Yellow Envelope" and used yellow as its dominant colour. The Yellow Envelope was distributed around Australia to each recipient either once per year, three times per year or five times per year in the following volumes: Year Annual Volume 1997 4.41 million 1998 11.76 million 1999 17.05 million 2000 18.47 million 2001 18.70 million 2002 16.89 million 2003 16.93 million

80 The primary judge said that the evidence showed that the marketing of The Yellow Envelope had a strong yellow theme, and that a significant element of its brand was the colour yellow and the word yellow. He said that there was no evidence that Horizon had an improper motive in using the colour or word yellow as it did. 81 The primary judge drew the conclusion from this evidence that prior to 25 July 2003 other traders in Australia commonly used the colour yellow and the word yellow in respect of print and online directories.

Use of the colour and word yellow in Australia after 25 July 2003 82 PDCA continued to publish its directories bearing largely the same features previously described and significantly expanded the geographical coverage of the directories. It published directories annually in Alice Springs from 2003, Mackay from 2004, Darwin from 2005, the Sunshine Coast in 2007, and Townsville from 2008. Each directory had a distribution commensurate with the size of the relevant region ranging from approximately 25,000 for the Alice Springs directory to approximately 120,000 for the Townsville directory. 83 PDCA developed its online directory to correspond with its expanding printed directories. Its 2004 website at www.yourlocalphonebook.com.au referred to "yellow page listings" and "Yellow Section" and displayed images of a PDCA directory, but it did not use yellow as the dominant colour. In 2005, the website commenced to refer to PDCA as being a fully accredited member of the "Yellow Pages Publishers Association" and made prominent use of the colour yellow throughout the website. PDCA then published a website at www.localdirectories.com.au which used yellow as the dominant colour. 84 RMK continued to publish its print and online directories for Mandurah, Rockingham and Kwinana. Consistently with the undertaking provided to Telstra, it no longer used the name YELLOW DIRECTORIES, but it continued to use yellow as the dominant colour on the covers of its print directories and on its website. The directories no longer used yellow coloured pages. RMK distributed approximately 64,000 copies of the directories annually. 85 Market Creations continued producing regional community directories in regional Western Australia and expanded the distribution to include directories for Jurien Bay, Narrogin, Newman, Carnarvon, Esperance, Broome, as well as Karratha and the Mid West. Each directory had a distribution commensurate with the size of the relevant region ranging between 6,000 and 20,000 copies annually. The business directory sections commonly used a yellow or yellow/orange colour coding for its business directory section and some editions used yellow headings in the business directory section. 86 Yellowbook published its directories at www.yellowbook.com.au and www.yellowbook.net.au from 2006. In addition to using the word yellow in the domain name and throughout the website, it used the colour yellow in the header, footer and search button. In 2008 Yellowbook launched www.yellowcoupons.com.au with similar features and layout, in 2011 www.yellowdirectory.com.au, and in 2012 www.yellpages.com.au and www.yellbook.com.au. 87 The primary judge referred to other Australian print business directories in evidence before him, including the Chinese Business Directory, the Australian Business Directory - Your Multicultural Guide, and Market Creations' Community Directories. He found that many of these adopted yellow as the colour for the spine of the print directories but that they had little other significant use of yellow. Some other online directories were also in evidence including chineseyellowpagesaustralia.com.au, christianyellowpages.com.au, and jewishyellowpagesaustralia.net. He found that these all used the word yellow in their title and domain name, but otherwise had little use of the colour yellow on the websites. 88 The primary judge drew the conclusion that after 25 July 2003 the colour and word yellow were commonly used by other traders in Australia in respect of print and online business directories.

Use of the colour and word yellow by overseas traders both before and after 25 July 2003 89 There was evidence before the primary judge of the use of the colour and word yellow overseas both before and after 25 July 2003. Telstra challenge his use of this evidence for reasons we will address later in these reasons. 90 The primary judge accepted as correct a statement in one of the documents annexed to Mr Harvy's affidavit to the effect that the pink pages of the classified directory were changed to yellow, "which is the internationally recognised colour for classified directories". 91 Mr Harvy accepted that the words "Yellow Pages" and the Walking Fingers logo were in use in the USA prior to Telstra commencing to use them in 1975, and that when Telstra commenced using YELLOW PAGES it looked at the international marketplace in respect of business directories and picked up on an international trend in adopting YELLOW PAGES and the Walking Fingers logo. 92 The primary judge accepted Mr Moule's evidence that from 1976 to 1986 he worked for Directories Australia Pty Ltd ("Directories Australia") and then for Australian Directory Services Pty Ltd, which at the time published the YELLOW PAGES directories in Australia under contract with Telstra. He said that Directories Australia was a subsidiary of GTE which published business directories around the world, including in the USA. He said that the directories "were always yellow". He said that prior to 25 July 2003, yellow was accepted worldwide as the industry standard colour for business directories, and that this was confirmed by a document entitled "Yellow - a time line". 93 The primary judge referred to international directories produced by the opponents which showed the use of the colour and word yellow prior to 25 July 2003, namely: (1) the 1993 Jackson Hole, Wyoming, USA print directory which used yellow coloured pages for the business directory section and named that section the "Yellow Pages". The evidence was that this directory was used by PDCA as a sales tool when it was first promoting its telephone directories in the early 1990s; (2) the 2000 Pacific Bell "Smart Yellow Pages" print directory for the Napa Valley, California, USA. This directory used yellow as the dominant colour on its cover, used yellow coloured pages for the business directory section, and had the words "Yellow Pages" in its title; and (3) the 2003 Papua New Guinea "Yellow Pages" print directory. This directory also used a yellow cover and "Yellow Pages" in its title. The primary judge inferred that it also used yellow coloured pages. 94 The primary judge inferred that these directories were published in this format not only in the years for which evidence was adduced but also in some later years. 95 The primary judge found that prior to 25 July 2003 in many overseas countries: (1) yellow pages were used in print business directories; (2) yellow was used as the dominant colour on the cover of print business directories; (3) "Yellow Pages" was used in respect of print and online directories; and (4) yellow was used as the dominant colour on online directory websites. 96 The evidence dealing with the period after 25 July 2003 included examples of 2009 or 2011 from numerous locations in the USA, and on Yellow Pages and similar websites in South Africa, Thailand, Singapore, Hong Kong, Peru, France, Italy, Indonesia, Papua New Guinea, Egypt, Malaysia, China, Eritrea, Bahrain, Cyprus, Germany, USA, Macau, Vietnam, Bermuda, Malta, Turkey, Brazil, United Kingdom and through www.jewishyellow.com. He found that of these websites, approximately 28 used the words Yellow Pages in the title and many used these words in the domain name too. He found that many had domain names incorporating the word yellow, such as USA websites www.yellowpages.com and www.yellowbook.com, Canadian website www.yellowpages.ca, South African website www.sayellow.co.za, Singapore website www.yellowpages.com.sg and Thai website www.yellowpages.co.th. 97 He noted that Mr Harvy accepted in cross-examination that "Yellow Pages" print directories were published in Canada, France, Ireland, Israel, New Zealand and the Netherlands and for the most part used yellow covers. 98 The primary judge referred to this usage as widespread international usage of the colour and word yellow after 25 July 2003. He said that he inferred from the evidence of Mr Moule and Mr Harvy that there were more examples of overseas use after 25 July 2003 than Telstra adduced. 99 The primary judge found that after 25 July 2003 the colour and word yellow were commonly used by traders internationally in respect of print and online business directories.

The primary judge's reasons 100 The primary judge referred to the reasons of the respective delegates and to a number of general principles. Subject to one matter, we do not need to refer to these matters at this stage. His Honour said that if Telstra was applying to register the colour yellow as a trade mark "it would face an uphill battle to establish that it was inherently adapted to distinguish its products" (at [168]). He referred to authority in support of that proposition and then said (at [170]): Of course, the present application is for a word denoting a colour rather than a colour itself. But, in my view it is difficult to draw a distinction between a word denoting a colour and a colour when dealing with the issue of a trade mark's inherent capacity to distinguish. Each of the parties relied on authorities pertaining to colour marks in their submissions. 101 One of Telstra's complaints is that the primary judge impermissibly "conflated" the word yellow and the colour yellow. 102 The primary judge then turned to consider whether the YELLOW trade mark was descriptive and he found that it was. The primary judge referred to the taxonomy identified by Finkelstein J in BP PLC (formerly known as BP Amoco PLC) v Woolworths Ltd [2004] FCA 1362; (2004) 62 IPR 545 and formulated by Judge Friendly in Abercrombie & Fitch Co v Hunting World Inc 537 F 2d 4 (1976) at 9-11. Finkelstein J said at 554 [20]: ... The classic formulation of the different categories of distinctiveness in relation to marks is found in the judgment of Judge Friendly in Abercrombie & Fitch Co v Hunting World Inc 537 F 2d 4 9-11. The categories are: (1) generic; (2) descriptive; (3) suggestive; and (4) arbitrary or fanciful. Generic terms can never be trade marks. Descriptive terms can, but only if they have acquired a secondary meaning. Suggestive arbitrary or fanciful terms are inherently distinctive: Two Pesos Inc v Taco Cabana Inc 505 US 763 (1992) 768-9; (1992) 24 IPR 61 at 65. See also Gruner & Jahr USA Publishing v Jahr Printing and Publishing Co 991 F 2d 1072 (1993). 103 The primary judge then analysed the issue by reference to these categories. By reference to a dictionary definition of the word yellow, he said that the word was descriptive. He said that the word yellow was not a made up, meaningless or fanciful word which is distinctive as a result and he said that it was not distinctive on the basis that it was dislocated from or inappropriate to the designated goods and services. Nor, in his Honour's opinion, was the word yellow an arbitrary term when the evidence showed that it was the colour commonly used in respect of print and online directories by Telstra and other traders in Australia, and also by other traders overseas (at [181]). His Honour considered that the YELLOW trade mark referred to a character or a quality of some of the designated goods and services and fell within the terms of Note 1 to s 41(6) (at [183]). 104 The primary judge said that although he accepted that YELLOW PAGES was not a generic term in Australia, that did not mean that the word YELLOW was inherently adapted to distinguish. In context, the word yellow, standing alone, was merely descriptive. 105 In light of the authorities and, in particular, Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 ("Registrar of Trade Marks v Du Cros") and Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 51 ("Clark Equipment v Registrar of Trade Marks"), the primary judge turned to consider whether other traders, acting without improper motive, would wish to use the YELLOW mark, or a similar mark, in a way likely to infringe it if registered. 106 The primary judge said (at [186]): The authorities establish that the extent, if any, of the inherent adaptability of the YELLOW Trade Mark to distinguish turns on whether there is a likelihood that other traders will, in the ordinary course of their business and without improper motive, want to use the same or a similar trade mark, in a manner that is likely to infringe the proposed mark. 107 His Honour said that in making that assessment he would take into account evidence of the actual activities of other traders prior to the Lodgement Date and what other traders are likely to do. As to the former matter, he referred to his findings about the use of the colour and word yellow prior to the Lodgement Date by other traders in Australia and overseas and said that he was satisfied that other traders in Australia and overseas commonly used the colour and word yellow in respect of their print and online business directories. The primary judge said that no Australian trader had an improper motive in doing so. 108 The primary judge then addressed Telstra's contention that use of the colour and word yellow overseas was irrelevant to the question of whether the YELLOW trade mark was inherently adapted to distinguish the designated goods and services from those of other traders. As we understand the primary judge's reasons, he accepted that it would be impermissible to reason that because the colour and word yellow were not distinctive overseas, they could not be distinctive in Australia (Eclipse Sleep Products Inc v Registrar of Trade Marks (1957) 99 CLR 300 ("Eclipse Sleep Products v Registrar of Trade Marks") or The Seven Up Co v O.T. Ltd (1947) 75 CLR 203). However, that did not mean that the position overseas was not relevant to what traders in Australia without improper motive might want to do. The primary judge said that "at a minimum" the position overseas was relevant to what hypothetical other traders in Australia were likely to do because, his Honour said, overseas commercial practices, particularly from the USA, often take root in Australia. He also noted (again) that the widespread use of the colour and word yellow overseas preceded Telstra's adoption of yellow colour paper in its print directories in 1975. 109 The primary judge said that other traders were likely, without improper motive, to want to use the word yellow to signify their goods in a way that will infringe the YELLOW trade mark because the word yellow is descriptive of the colour widely used in respect of directories, and because it is likely that consumers recognise directories by reference to that colour (at [201]). The finding we have emphasised is an important one for reasons which will become clear. 110 The primary judge said that if there was any doubt about the likelihood of other traders legitimately wishing to use the proposed mark, the application should be refused. The primary judge said that there was little evidence of other traders using the word yellow as a trade mark, but said that was likely to be because of Telstra's strong stance in protecting its intellectual property rights. 111 The primary judge found that if the YELLOW trade mark was registered, it was likely that any use of the word yellow in a trade mark in respect of directories and related goods and services will infringe it and that there were likely to be serious difficulties for other traders in knowing where to draw the line in using trade marks that contain the word yellow or use the colour yellow. 112 The primary judge referred to Philmac Pty Ltd v Registrar of Trade Marks (2002) 126 FCR 525 ("Philmac v Registrar of Trade Marks") which was a case about an application to register as a trade mark the colour terracotta as applied to the connection insert of polypipe fittings. Mansfield J said that in considering whether the colour mark was inherently adapted to distinguish, a relevant factor was the competitive need for the colour to remain available. The primary judge said that there was a commercial imperative for other traders to use the word yellow, and he again made a point which he had earlier made that the public saw the colour yellow as synonymous with business directories, and yellow was seen by other traders as the standard colour for business directories (at [227]). 113 The primary judge found it likely that innocent traders would want to use the word yellow or a similar mark in relation to "broad non directory-related products". He then briefly referred to what he identified as policy considerations. 114 The primary judge concluded by saying that while the issue was not straightforward, he considered that the YELLOW trade mark had no inherent adaption to distinguish the designated goods and services.

Analysis of the challenge to the primary judge's decision 115 Telstra filed a Draft Notice of Appeal with its application for leave to appeal. All parties filed an outline of submissions and Telstra sought and obtained leave to rely on an Amended Draft Notice of Appeal. Telstra's documents contained a number of threads and, without wishing to be unduly critical, it was only at the hearing that these threads were brought together. 116 Telstra made two broad submissions concerning the primary judge's reasoning with respect to s 41(3). First, it submitted that even if the primary judge found, and was correct to find, that the YELLOW mark signified print and online directories, he erred in finding that the mark was descriptive of the goods and services. Telstra gave examples of words descriptive of print and online directories: business directories, advertising directories and classified directories. The YELLOW trade mark was not such a word. The goods and services were not yellow goods or services or inherently yellow like, for example, bananas. Secondly, Telstra submitted that the primary judge erred in proceeding on the basis that the YELLOW mark signified print and online directories in the absence of making a finding to that effect or, if he did make a finding to that effect, such finding was erroneous having regard to the evidence. If the YELLOW mark did not signify print and online directories then it was not wholly descriptive and it was inherently adapted to distinguish, at least to some extent. Telstra identified what it contended were other errors in the primary judge's reasons which in one way or another fall within the rubric of these broad submissions. For example, Telstra argued that the primary judge had approached the issues under s 41(3) as if the onus was on it, whereas the authorities clearly establish that the onus to show that the mark lacked any inherent adaption to distinguish was on the opponents. Another example is that Telstra argued that the primary judge at one stage misdirected himself by considering its application as if it was an application for registration of the colour yellow and, by doing so, effectively placed a higher onus on it than was required. A further example is that Telstra submitted that the primary judge erred in relying on evidence of the use overseas of the colour and word yellow in connection with print and online directories. 117 We did not understand Telstra to argue that the YELLOW mark was capable of distinguishing print and online directories on the basis of inherent adaption alone and it accepted that, ultimately, capacity to distinguish would be decided by reference to s 41(5). We would say at the outset that it was appropriate for Telstra to proceed on the basis that capacity to distinguish could not be decided by reference to inherent adaption alone even if the Court accepted all of its arguments. The word yellow describes a colour and, even without evidence, it would be appropriate to infer that at least some other traders might wish to use that colour. Furthermore, there was at the very least evidence in this case of not infrequent use of the colour yellow in connection with print and online directories. 118 Telstra's first broad submission can be dealt with relatively briefly. In our opinion, if it is correct to find that the YELLOW mark signified print and online directories to the consumers of these goods and services, then the mark would be merely descriptive of the goods and services and not inherently adapted to distinguish in the same way as the examples of descriptive words for print and online directories given by Telstra of business directories, advertising directories and classified directories are merely descriptive. Although not quite on all fours, the following passage from the judgment of Whitford J at first instance in the Blue Paraffin Trade Mark [1977] RPC 473 at 494 illustrates the point: Since 1905 the Trade Marks Act has recognised that colour may form an element in the distinctiveness of a mark. A word descriptive of a colour is not in my view necessarily to be considered as being inherently descriptive of goods. In relation to a vast range of goods, colour or words denoting colour must necessarily be inherently descriptive - paints, for example, or articles of clothing such as socks. There are categories of goods in relation to which colour has no inherent significance. In the field of drugs it has been held that coloured or multi-coloured capsules are registrable as trade marks. In relation to a particular and restricted category of goods within a broad range where colour is inherently descriptive, particular colours may prima facie be the reverse of descriptive, red, for example, for whitewash or white spirit. 119 In deciding whether a word is inherently descriptive, the Court may consider evidence of the use of the word in the particular trade. In FH Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537 ("Faulding"), Kitto J (with whom Barwick CJ agreed) said that the Court could have regard to evidence in considering the use of the word "Barrier" in connection with skin protection creams. His Honour made the point that but for the evidence it might have been concluded that, although inherently suited to be used adjectivally for the purpose of referring to the distinguishing characteristic of skin protection creams generally, the word "Barrier" would not be one which would spring instantly to the mind of a person who wanted a word for the purpose, but had never known "Barrier" to be so employed. However, the evidence showed that such a conclusion would not be correct. His Honour said (at 555): ... But the evidence shows clearly, and it satisfied the learned primary Judge, that Barrier has long appealed to persons in industry, in pharmacy and in allied occupations as meeting their need for a word to describe succinctly and yet exactly the essential characteristic of protection which distinguishes the whole of the relevant class of creams. In particular there has been since about 1945 a growing use of the word to describe creams designed to protect workers in industry from contracting dermatitis, and there was an earlier usage of the word in such expressions as "barrier agents" and "barrier substances". In published matter that was put in evidence the expression Barrier Creams has been used over many years (as the learned Judge observed) "in a way which would show to the ordinary reader with no technical training that the writers are referring to a class of protective creams and not specifically to the plaintiff's product". The evidence satisfied his Honour "that in describing its cream as Barrier Cream the defendant was using the word Barrier as a reference to the character or quality of its cream and that the word Barrier can be regarded as a correct description of the creams. 120 His Honour's conclusion was that the word "Barrier" had such a place in the vocabulary of persons concerned with skin protective creams that it could not be considered distinctive, and was not entitled to the monopoly conferred by registration. 121 In our opinion, the same principle applies if the evidence establishes that because of the use of the colour yellow, with or without the word yellow, consumers and traders understood the word yellow to signify print and online directories. 122 Telstra's second broad submission is that the primary judge erred in concluding that the word yellow signified print and online directories. In support of this submission, Telstra first contended that the primary judge erred in not addressing the ordinary signification of the YELLOW mark. 123 The primary judge found that yellow is a word in ordinary usage which describes a primary colour. He referred to the Oxford English Dictionary of the word yellow as meaning, when used as an adjective, "of the colour of gold, butter, the yolk of an egg, various flowers, and other objects", and, when used as a noun, meaning "one (the most luminous) of the primary colours occurring, in the spectrum between green and orange". He noted that Telstra did not argue that yellow had any colloquial or new meaning such that the dictionary definition had limited application (at [178]). 124 The primary judge also found that prior to the Lodgement Date, other traders in Australia commonly used the colour yellow and the word yellow in respect of print and online directories (at [137]). The primary judge refers to this finding in a number of passages in his reasons. (e.g., at [188], [201], [203]). Telstra accepts that the colour yellow was often used in connection with print directories and perhaps online directories. It does not accept that the word yellow was often used in connection with print and online directories. It does not accept that the primary judge's finding about the use is a finding by him that either the colour yellow or the word yellow signified print and online directories. Telstra contends that the primary judge did not make such a finding and that he made the same mistake which the High Court identified in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48; (2014) 315 ALR 4 ("Cantarella") as having been made by the Full Court of this Court. 125 The majority in Cantarella (French CJ, Hayne, Crennan and Kiefel JJ) referred to a word mark which made direct reference to the character or quality of the goods in respect of which registration was sought which would not be inherently adapted to distinguish, and a word mark which conveyed an allusive or metaphorical meaning in respect of the goods which may be inherently adapted to distinguish (at 21 [73]). The finding of the primary judge in that case (which was not disturbed on appeal) was that it would not be generally understood in Australia that the words "ORO" and "CINQUE STELLE" had the meanings of "gold" or connected with gold and "five stars" respectively (at 6 [4]). The majority reviewed the evidence and saw no reason to disagree with that conclusion (at 22 [75], [76]). The error committed by the Full Court of this Court was to consider whether rival traders without improper motive might want to use 'ORO" and "CINQUE STELLE" without first considering the ordinary signification of the words in Australia by persons concerned with coffee products. The majority said (at 20-21 [71]): As shown by the authorities in this Court, the consideration of the "ordinary signification" of any word or words (English or foreign) which constitute a trade mark is crucial, whether (as here) a trade mark consisting of such a word or words is alleged not to be registrable because it is not an invented word and it has "direct" reference to the character and quality of goods, or because it is a laudatory epithet or a geographical name, or because it is a surname, or because it has lost its distinctiveness, or because it never had the requisite distinctiveness to start with. Once the "ordinary signification" of a word, English or foreign, is established an enquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods. If a foreign word contains an allusive reference to the relevant goods it is prima facie qualified for the grant of a monopoly. However, if the foreign word is understood by the target audience as having a directly descriptive meaning in relation to the relevant goods, then prima facie the proprietor is not entitled to a monopoly of it. Speaking generally, words which are prima facie entitled to a monopoly secured by registration are inherently adapted to distinguish. 126 If a word mark is taken as an example, the ordinary signification of the mark, and the question of "whether other traders are likely, in the ordinary course of their business and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods" (Registrar of Trade Marks v Du Cros at 635 per Lord Parker) (or to note alternative formulations: such traders actuated only by proper motives "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" (Clark Equipment v Registrar of Trade Marks at 514 per Kitto J), or "a trader might without any improper motive, want to use to describe his goods" (Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417 ("Burger King") at 425 per Gibbs J (as his Honour then was), or "other traders might legitimately need to use the word in respect of their goods" (Cantarella at 20-21 [71])) are closely related questions. Often the answer to the first question, i.e., what is the ordinary signification of the word mark will provide the answer to the second question, i.e., is it the case that other traders might legitimately need to use the mark in respect of their goods. Sometimes the issues will be relatively clear and little evidence will be required. Burger King appears to be such a case (see Gibbs J at 425). In other cases, evidence might be called on the issue of the ordinary signification of the word mark as happened in Faulding. Evidence of other traders about their use of the mark, or something similar, seems to be admissible on the second question (Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519 ("Sports Warehouse v Fry Consulting") at 543-544 [102] per Kenny J), but would be considered in light of all of the evidence in the case. It is important to note the possible dual significance of such evidence. Evidence of other traders using the word yellow or the colour yellow in connection with their print and online directories could be evidence of the ordinary signification of the YELLOW mark and of the fact that other traders might want to use the word to describe their goods or services. 127 A consideration of what persons in the trade or other traders might want to do includes, at least in the ordinary case, a consideration of the views of consumers of the relevant goods or services because the perceptions of traders in goods and services will be based on, or strongly influenced by, the perceptions of the consumers of those goods and services. 128 The thrust of Telstra's complaint based on Cantarella is that, although the primary judge set out the meaning of the word yellow (and Telstra does not complain of the primary judge's conclusion in that respect), he did not consider the ordinary signification of the word (if any) in relation to print and online directories. For example, it contended that there might be considerable use of the colour yellow in connection with print and online directories, but the primary judge did not analyse whether the colour was used to signify the directories as directories as distinct from using the colour for decorative or eye-catching purposes. 129 We reject this criticism of the primary judge's approach. There are at least two passages in his reasons where his Honour referred to the colour yellow signifying or being likely to signify directories: The evidence shows that prior to the Lodgement Date the colour and word yellow were commonly used in Australia and overseas in respect of print and online business directories. This use is likely to have formed or strengthened the desire of innocent traders to use the word yellow in respect of their directories. Because the word yellow is descriptive of the colour widely used in respect of directories, and because it is likely that consumers recognise directories by reference to that colour, traders are likely, without improper motive, to want to use the word yellow to signify their goods in a way that will infringe the YELLOW Trade Mark if registered. (Our emphasis) (at [201]) These utilitarian and economic functions in the colour yellow also point to a commercial imperative for other traders to use the word yellow. This is confirmed by the evidence that prior to the Lodgement Date the public saw the colour yellow as synonymous with business directories (as per Mr Lee's evidence), and yellow was seen by other traders as the standard colour for business directories (as per the evidence of Mr Moule, Mr Harvy and "Yellow - a timeline"). (Our emphasis in the second sentence) (at [227]). 130 We can take the finding in the second passage alone because that is the stronger of the two findings. The primary judge addressed the ordinary meaning of the word yellow and he addressed its significance in relation to print and online directories. He did not make the error which the High Court identified in Cantarella. 131 We think that the burden of Telstra's appeal with respect to s 41(3) is that the primary judge made a number of errors in connection with his finding that the colour yellow and, therefore, the word yellow signified print and online directories, and that other traders might want to use the word yellow. The submission was that these errors varied in significance, but, at the very least, considered together, justified this Court's intervention. 132 We start with the onus of proof. Generally speaking, the opponent bears the onus under s 41(3) and, by reason of the text of s 41(5) and s 41(6), the applicant for registration bears the onus under those subsections (Blount Inc v Registrar of Trade Marks [1998] FCA 440; (1998) 83 FCR 50 ("Blount v Registrar of Trade Marks") at 56-58 per Branson J; Chocolaterie Guylian NV v Registrar of Trade Marks [2009] FCA 891; (2009) 180 FCR 60 ("Chocolaterie Guylian") at 67-69 [15]-[27] per Sundberg J; Sports Warehouse v Fry Consulting at 527-528 [26]-[28] per Kenny J). We say generally speaking because it is important to bear in mind as Branson J pointed out in Blount v Registrar of Trade Marks (at 56-58) that s 41(3)-(6) control the process whereby the Registrar determines the issue raised by s 41(2) and it is perfectly possible that the Registrar will conclude under s 41(3) 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 there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the designated goods or services. 133 A related issue which has been considered in the authorities is whether the onus on the opponent to registration is on the balance of probabilities or an onus to establish that the trade mark should clearly not be registered. That issue received little attention in the oral submissions. We would follow Kenny J in Sports Warehouse v Fry Consulting who in turn followed Sundberg J in Chocolaterie Guylian at 70 [26], and Gyles J in Pfizer Products Inc v Karam (2006) 237 ALR 787 at 793 [18] that the standard of proof is proof on the balance of probabilities. The primary judge considered this issue in his reasons and, with respect, somewhat confusingly said it did not matter because he had decided Telstra's appeal under s 41(6) and s 41(5) (at [37]). We are satisfied that this was no more than a slip and that it is of no consequence. 134 There are passages in the primary judge's reasons which indicate that he understood where the onus of proof lay. For example, in the introductory section of his reasons, he said (at [31]-[32]): The onus of proof in an opposition hearing before a delegate of the Registrar and on appeal to the Court rests upon the opponent to registration: Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9 ("Food Channel") at [32] per Keane CJ, Stone and Jagot JJ. Accordingly, in the YELLOW Appeals as the opponents to registration, PDCA and Yellowbook must prove the grounds of opposition they rely upon. But where the enquiry proceeds to s 41(6) of the Act (as I have found) or s 41(5), then the onus shifts to Telstra as the applicant for the mark to persuade the Court of its entitlement to registration. 135 However, later in his reasons when considering the likelihood of other traders wanting to use the word yellow as a trade mark, he made the following observation (at [204]): It is important to remember that if there is any doubt as to the likelihood of other traders legitimately wishing to use the proposed mark the application should be refused: Chancellor, Masters and Scholars of the University of Oxford (Trading as Oxford University Press) v Registrar of Trade Marks (1990) 24 FCR 1 at 25 per Gummow J. 136 With respect to the primary judge, we think that his reliance on Chancellor, Masters and Scholars of the University of Oxford (Trading as Oxford University Press) v Registrar of Trade Marks (1990) 24 FCR 1 ("Oxford University Press") was misplaced. That was a decision under the Trade Marks Act 1955 and the onus was on the applicant to establish that the mark should be registered, and if the question was left in doubt, then the application should be refused (Oxford University Press at 7 per Lockhart J; at 21, 25 per Gummow J; Eclipse Sleep Products v Registrar of Trade Marks at 314 per Dixon CJ, Williams and Kitto JJ). As we have said, the position under s 41 is different. 137 We have carefully considered that section of his Honour's reasons where the passage set out above (at [135]) appears. We do not think that it was decisive in terms of his decision with respect to s 41(3). We think he decided that other traders would wish to use the YELLOW trade mark and that it was not inherently adapted to distinguish to any extent. 138 In the course of his reasons, the primary judge said (at [227]): These utilitarian and economic functions in the colour yellow also point to a commercial imperative for other traders to use the word yellow. This is confirmed by the evidence that prior to the Lodgement Date the public saw the colour yellow as synonymous with business directories (as per Mr Lee's evidence), and yellow was seen by other traders as the standard colour for business directories (as per the evidence of Mr Moule, Mr Harvy and "Yellow - a timeline"). Telstra made submissions with respect to the primary judge's reliance on each item of evidence referred to in this passage. 139 Mr Lee swore an affidavit which was put before the primary judge. It contained evidence of the use of the colour yellow and the word yellow in association with directories which he identified. He did not proffer an opinion in his affidavit about the public's perception of the link between the colour yellow and directories. In fact, he did not offer an opinion on that topic until he was asked a question by the primary judge in cross-examination. We set out the question and answer and then the follow-up question by counsel for Telstra: HIS HONOUR: It's this. Mr Lee, going back to the various directories you've produced over the years, there are - it isn't always the case, but there are a number of occasions where the predominant colour on the classified pages is yellow. Is there any reason for that, other than consistency?---Only thing that we think the public probably looks at the colour yellow as being synonymous with business advertising in these sorts of publications as a norm, and thereafter, where possible, we've tried to apply it consistently. Then later on, as Ms Schoff has taken you to, there has been a number of occasions where there has been a fair bit less yellow. Is there any reason for that?---No. It's just probably the designers having influence over the end product and looking at more - a more modern look and feel than perhaps just a solid band of one colour bordering the page. MS SCHOFF: But if I might answer --- HIS HONOUR: Yes. MS SCHOFF: --- ask a question, your Honour - but as we've seen with the Port Hedland Directory for 2012 where the advertising pages are what might be described as entirely orange, would you agree that you were now confident to publish a directory with advertising pages published on orange - advertising listings on orange coloured pages? Were you confident that the users of the directory or the public would still understand that they were the classified listings in your directory?---I think, as you pointed out earlier, they're small markets and relatively small publications, so the users are not really greatly affected by a change up of colour. And we would be confident that the viability of the publication would be the same if colours were changed up for any of the sections respectively. We only aim to keep it consistent to keep the consumer better informed as to how to use it year on year. 140 Telstra submitted that this was too slender a basis for a conclusion that the public considered that the word yellow signified print and online directories, particularly in circumstances where Mr Lee was disposed to emphasise the need for consistency rather than any particular colour. 141 Mr Moule said that BMA adopted the use of yellow coloured pages for the classified section of its directories because that was the industry standard at the time. He also said that directories around the world were always yellow and that they were yellow pages. He said that he did not think it ever entered our (i.e., BMA's) head that its directory would be anything other than yellow when the company decided to produce its own directory. On the appeals, Telstra referred to the fact that in cross-examination Mr Moule agreed with the proposition that the industry standard in Australia in 1986 was set by Telecom (Telstra's predecessor) and its directory products, and that if there was an industry standard, it was comprised solely of the products of Telecom. It is not clear to me what Telstra seeks to make of this evidence. It seemed to argue that it meant that there was a possibility that the colour yellow and, therefore, the word yellow signified not print and online directories generally, but Telstra's print and online directories. Telstra argued that the onus under s 41(3) was on the opponents and they had to exclude that possibility and if they did not do so, the yellow mark had inherent ability to distinguish, at least to some extent. This submission must be rejected. It seems to us that Mr Moule's evidence is really quite anodyne as far as the present issue is concerned. The issue is what the colour and word yellow signified on 25 July 2003, and the party which set the industry standard in 1986 does not bear on that issue. 142 Mr Harvy gave evidence that directories were always yellow, and that prior to the Lodgement Date "yellow was accepted worldwide as the industry standard colour for business directories". The primary judge said that this was confirmed by the document "Yellow - a timeline". It was difficult to follow Telstra's criticism of the primary judge for relying on this document. It seemed to be the statement that yellow was the internationally recognised colour was made as at 1975. That is true, and if there was a change then that would clearly be relevant. However, that does not mean that the evidence is irrelevant and that the primary judge was not entitled to place some weight on it. 143 Telstra submitted that the primary judge failed to consider evidence which he accepted and which was relevant to the issue of whether the word yellow signified directories. Telstra submitted that although the primary judge noted the evidence of Ms Kerferd of RMK that she chose yellow because it stood out and because it was complemented by other colours, and that she chose yellow because it was a primary colour that worked with other colours, was easily identifiable, and was an appropriate colour, he failed to bring it to account as evidence that at least one other trader did not use yellow because it signified print directories. There is some force in this submission. 144 Telstra submitted that the primary judge erred in failing to place sufficient weight on the document containing the agreed facts (see [60] above). The document is in tabular form and it sets out the name of the publisher, the name of the publication, the year of the publication, whether the word yellow was used, whether the colour yellow was used, and the distribution of the publication. The category identifying whether the colour yellow was used is broken into sub-categories indicating whether the use was on the front cover/spine/back cover, incidental or decorative use on covers, the colour of the pages for the classified section, or incidental or decorative use on the pages. The primary judge referred to this schedule (at [114]-[117]) but he analysed the evidence by reference to each of the other traders who gave evidence. A number of these other traders and their publications are referred to in the schedule. The schedule shows in relation to print directories between 1995 and 25 July 2003 (and reviewed by the parties), an almost invariable use of the colour yellow on the front cover/spine/back cover of the directory or of the pages for the classified section, and sometimes both. There is less evidence in the case of online directories, but such evidence as there is shows the use of the word yellow in two out of the three cases in the title and domain name and throughout the website. We are not persuaded that the primary judge erred in his treatment of this evidence. 145 The primary judge used his conclusions as to the use of the colour and word yellow overseas in relation to his conclusion about whether other traders would want to use the mark in Australia. As we have said, his Honour said the desire of other traders in Australia would be formed or strengthened by knowledge of the widespread (and apparently successful) use by overseas traders of the colour and word yellow in respect of their directories because overseas commercial practices, particularly from the USA, often take root in Australia. He had an example in the case of Mr Moule from BMA. He rejected the argument that the two markets were quite different because Telstra had registered marks and the use of the colour and word yellow overseas was already widespread before Telstra's adoption of yellow in 1975, and noted that Telstra itself was following an international trend when it adopted yellow coloured pages and the YELLOW PAGES composite mark with the Walking Fingers logo. We do not see an error in this line of reasoning. 146 Telstra submitted the primary judge erred in his approach to Ms McGarry's evidence. He said that Ms McGarry joined the PDCA group in 1998 and by then the group's use of the colour and word yellow was well established. He was not satisfied that PDCA's motives for adopting the colour and word yellow were improper because the word and colour yellow was widespread overseas and yellow was the standard industry colour for business directories and because Ms McGarry was not able to give evidence as to PDCA's motives in adopting the colour and word yellow. Telstra submitted that this approach reversed the onus of proof under s 41(3) and the primary judge impermissibly put the onus on it to show an improper motive, rather than on the opponents to show proper motives. We reject Telstra's submission. Although they are related, it is necessary to distinguish between evidence of the use of the colour and word yellow for the purposes of determining its ordinary signification and the question of whether other traders acting without improper motives might wish to use the mark to describe their goods. The first matter is a matter of fact where motives are irrelevant. Ms McGarry can and did give evidence as to that matter. The second matter is essentially a hypothetical inquiry as the authorities make clear (see, for example, Sports Warehouse v Fry Consulting at 544 [105] per Kenny J). 147 Telstra submitted that the primary judge erred in placing weight on The Yellow Envelope direct mail service from 1997 to 2003 because that did not involve directories and was the subject of a registered trade mark. The primary judge was aware that the evidence did not relate to directories. It is not clear what use was made of the evidence, but on any view it was minor. 148 Telstra submitted that the primary judge erred by approaching the issue under s 41(3) in relation to the YELLOW mark as if the application was an application for the registration of the colour yellow. Telstra submitted that the primary judge referred to authorities which suggested that it was difficult, if not very difficult, to show that a colour was inherently adapted to distinguish colour and mark, and that he referred at some length to the case of Philmac v Registrar of Trade Marks. Telstra submitted that this affected his approach and, in effect, involved the use of a test of inherent adaptability which was too onerous. 149 We think that there are two answers to this submission. First, we think the primary judge was well aware that the application for registration was for the word yellow. For example, he said (at [220]): While I accept that the use of the colour yellow by other traders cannot be determinative in relation to the word yellow, in my view the use of the colour yellow and the word yellow cannot be separated as cleanly as Telstra contends. ... 150 Secondly, the word yellow describes the colour yellow and if, as the primary judge found, the colour yellow signifies print and online directories, the word is descriptive of those goods and services. There is clearly a link between a word describing a colour and the colour itself (Cadbury Ltd v Effem Foods Ltd [2007] NZCA 303; (2007) 78 IPR 672 at 678 [27], 680 [34]). 151 It is true that, with respect, some criticisms may be made of aspects of the primary judge's reasons. However, overall they are minor and we think his Honour was correct to conclude that the YELLOW trade mark had no inherent adaption to distinguish the designated goods and services.

Section 41(5) 152 In view of our conclusion in relation to s 41(3), s 41(5) is irrelevant. However, like the primary judge, we will consider the subsection in case there is an appeal.

The primary judge's reasons 153 In considering s 41(5), the primary judge proceeded on the basis that if he was wrong and the YELLOW mark had some inherent adaption to distinguish albeit it was to a minor extent only (at [278], [283]). He noted that in those circumstances, more by way of actual use and other circumstances needed be shown. He also noted that although capacity to distinguish under s 41(5) is to be decided as at the Lodgement Date, use of the mark after the Lodgement Date may establish that the trade mark has in fact become distinctive which in turn, and in appropriate cases, allows an inference to be drawn that as at the Lodgement Date the mark had a capacity to distinguish. Finn J in Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd [2004] FCA 968; (2004) 61 IPR 257 ("Austereo v DMG Radio") stated the relevant principles in the following way (at 264-265 [32]-[33]): Evidence of subsequent use is, in my view, admissible in opposition proceedings not only where it is claimed that the use of a mark would be likely to deceive or cause confusion: see 43 of the Act; Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 at 509; but also where the capability of a mark to distinguish is in issue: see J Lahore and J Garnsey (eds), J W Dwyer and A Dufty, Patents, Trade Marks and Related Rights, Butterworths, Sydney, 1996 at [54,210]; Shanahan's Australian Law of Trade Marks and Passing Off, 3rd ed, Lawbook Co, Sydney, 2003 at [6.95]. As was said in Pound Puppies Trade Mark [1988] RPC 530 at 533: … 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. Though Austereo has submitted that only prior use is admissible for s 41(5) purposes, I am satisfied that the view expressed above reflects the true construction of s 41(5) which, unlike s 41(6), is not limited to prior use. It also expresses "the cold common sense" that commended itself to Burchett J in Conde Nast Publications at 509 of seeing actual events as being "capable of illuminating the probabilities already inherent in [a prior] situation". 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. 154 In that case, Finn J found that the mark had been used in a way which educated the public as to the association between the mark and the applicant's business and that, therefore, the subsequent use did not support an inference that the required capability existed at the priority date (at 268 [52]; see also Sports Warehouse v Fry Consulting at 546 [112]-[113] per Kenny J; British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 ("British Sugar") at 306 per Jacob J). 155 The primary judge found that Telstra did not use the YELLOW trade mark at all before the Lodgement Date. It used the word yellow but not as a trade mark. His Honour went on to say that even if it was used as a trade mark, it did not in fact distinguish Telstra's goods and services because its trade mark significance was substantially diluted by the association of the word yellow with other elements of the composite YELLOW PAGES trade marks and, in addition, it did not use YELLOW to a sufficient extent or for a sufficient duration. 156 Telstra relied on two campaigns it conducted after the Lodgement Date in support of its case that the YELLOW trade mark had become distinctive, or at least sufficiently distinctive to show that at the Lodgement Date, it was capable of distinguishing the designated goods and services. They were the FIND IT IN YELLOW campaign and the YELLOW campaign. The primary judge made detailed findings about those campaigns (at [76]-[92], [93]-[112]) but, for reasons which will become clear, it is not necessary for us to set out the details. 157 The FIND IT IN YELLOW campaign consisted of five phases and was conducted from early 2005 to mid-2006. The primary judge described the campaign as involving the following (at [287]): (a) cost in the order of $9 million to conduct; (b) was large and broad-reaching, using press, television, electronic, distribution of merchandise, outdoor and online advertising; and (c) included the nationwide distribution of about 10.2 million printed YELLOW PAGES metropolitan, local, regional, and On the Go directories featuring the FIND IT IN YELLOW trade mark accompanied by the composite YELLOW PAGES Trade Marks. 158 The primary judge referred to evidence given by Mr Harvy and Ms Sherwood about the use of the word yellow alone during the FIND IT IN YELLOW campaign. The primary judge rejected that evidence. He found that the word yellow was not used during that campaign standing alone and as a badge of origin. The primary judge said that the external and internal reviews conducted by Telstra said nothing about the extent to which the word yellow was recognised by consumers as a badge of origin and that there was little or no cogent evidence that consumers saw Telstra's directories as originating from YELLOW as distinct from YELLOW PAGES. 159 The YELLOW campaign commenced in September 2006 and the primary judge said that the campaign (at [290]): (a) was aimed at rebranding the YELLOW PAGES print and online directories as YELLOW; (b) promoted YELLOW as an umbrella brand in respect of Telstra's print and online business directories; (c) was broad-reaching and launched with significant publicity; (d) cost just under $20 million in 2006 to 2007; (e) promoted the entire range of Telstra's business directory products under the YELLOW mark; and (f) made extensive use of the YELLOW mark on its online directory, in its promotional campaigns, and on material handed out to consumers. 160 The primary judge found that the YELLOW campaign was not successful in changing consumers' perceptions so that they understood that YELLOW was the source of Telstra's directories and related goods and services. First, he said that Telstra had not adduced any cogent evidence that consumers understood from the FIND IT IN YELLOW campaign that YELLOW was the source of Telstra's directories. Secondly, his Honour said that the 2007 TNS Report following the two campaigns showed negligible consumer recognition of the YELLOW trade mark unless consumers were prompted by reference to, amongst other things, YELLOW PAGES. He rejected evidence of Mr Harvy and Ms Sherwood to the contrary and said that it was not credible. Thirdly, the primary judge relied on the fact that Telstra decided to abandon YELLOW as an overarching brand in 2009 and revert back to YELLOW PAGES. 161 The primary judge expressed the following conclusions (at [310]): I infer from all the circumstances, including: (a) the descriptiveness of the word yellow; (b) the negligible unprompted consumer recognition of YELLOW revealed by the June 2007 TNS Report; (c) Telstra's decision to abandon the YELLOW mark in 2009 notwithstanding its broad-reaching and expensive campaigns in support of it; and (d) Telstra's failure to adduce cogent evidence that the YELLOW mark was well recognised by consumers; that despite Telstra's best efforts the high levels of consumer recognition of the YELLOW PAGES Trade Marks were not effectively transferred to the new YELLOW mark. Telstra did not establish that its post-Lodgement Date use of the YELLOW mark was capable of distinguishing Telstra's directory products as at the Lodgement Date. 162 His Honour found that there was little in the "other circumstances" (s 41(5)(a)(iii)) and said that he would have dismissed Telstra's case under s 41(5) had he considered that subsection to have been engaged.

Analysis of the challenge to the primary judge's decision 163 Telstra submitted that the primary judge made two errors. First, he put an onus on Telstra to establish that consumers recognised Telstra's products by reference to YELLOW in lieu of YELLOW PAGES. However, Telstra submitted that that was not the issue. The issue was simply whether the YELLOW trade mark had come to distinguish Telstra's products. Telstra points to various passages in the primary judge's reasons, including his statement that there is little or no cogent evidence that consumers saw Telstra's directories as originating from YELLOW, as distinct from YELLOW PAGES (at [301]). In fairness to the primary judge, his approach may well be based on the way the case was put to him. In any event, we do not need to decide this point because of our conclusion with respect to the second alleged error. 164 Telstra submitted that the primary judge overlooked a second TNS Report prepared in 2008 ("2008 TNS Report") and evidence of Ms Sherwood based on the report. Telstra submitted that the evidence was directly relevant to the issue of the distinctiveness of the YELLOW trade mark and indirectly and more generally relevant to the credit of both Mr Harvy and Ms Sherwood. 165 Ms Sherwood has qualifications and experience in the field of advertising and marketing. She swore two affidavits and in her first affidavit she produced the 2007 TNS Report. She expressed opinions about consumer perceptions based on that report. In her second affidavit, Ms Sherwood produced the 2008 TNS Report and expressed the opinion that a phase of the YELLOW campaign was "very successful". The report was produced in support of that opinion. Ms Sherwood was cross-examined at some length about this report. She rejected the suggestion that the report showed customer disengagement from the new branding. For example: Right, at paragraph 58 - sorry, just one last question about this: would you accept that the customers were disengaged from the new branding and as a consequence you moved back to the old branding?---No, I don't accept that at all. If you go back to the information you pointed out earlier to get 12 per cent of people recognising Yellow Directory, which is far more than the people naming Yellow Pages Directory, plus yellow, the 12 plus the four is 16 per cent, which is quite a significant shift and proved to me that they were already seeing equity in the yellow brand from the marketing we have done. All right?---So I don't believe that. 166 Although the primary judge referred to the 2007 TNS Report in his reasons, he did not refer to the 2008 TNS Report. In our respectful opinion, the report was of sufficient significance that the primary judge ought to have addressed it in his reasons. His failure to do so was an error. 167 The respondents sought to overcome the consequences of the primary judge's failure to refer to the 2008 TNS Report by advancing two arguments. First, they submitted that the figures in the 2008 TNS Report in support of consumer recognition of the YELLOW trade mark were underwhelming and the report could not make any difference to the result. They referred to the type of analysis undertaken by Jacob J in British Sugar (at 306): Thus, assuming I am right so far, the question is whether British Sugar have shown that the mark now has a distinctive character. Is my finding that to some but not most people "Treat" has some trade mark significance enough? This depends on what is meant by a distinctive character. Neither the Directive nor Act throw any light on this. So I have to use what I at least regard as my common sense. Take a very descriptive or laudatory word. Suppose the proprietor can educate 10% of the public into recognising the word as his trade mark. Can that really be enough to say it has a distinctive character and so enough to let the proprietor lay claim to the word as a trade mark altogether? The character at this stage is part distinctive but mainly not. I do not think it would be fair to regard the character of the word as distinctive in that state of affairs. But if the matter were the other way round, so that to 90% of people it was taken as a trade mark, then I think it would be fair so to regard it. This all suggests that the question of factual distinctive character is one of degree. The proviso really means "has the mark acquired a sufficiently distinctive character that the mark has really become a trade mark." In the case of common or apt descriptive or laudatory words compelling evidence is needed to establish this. And in particular mere evidence of extensive use is unlikely to be enough on its own. Of course the power of advertising may be able to turn almost anything (save a pure description) into a trade mark, but it must be shown in a case of this sort that the mark has really become accepted by a substantial majority of persons as a trade mark - is or is almost a household word. 168 There is force in this submission, particularly when regard is had to the primary judge's findings about the alleged pre-Lodgement Date use of the YELLOW trade mark (see [28]-[41], especially [34]). However, we do not accept it because the evidence may have supported Ms Sherwood's credit (and perhaps that of Mr Harvy), and acceptance of her credit may have affected the acceptance of her opinions more generally. Secondly, the respondents submitted that, even assuming the YELLOW trade mark had become distinctive to some extent, that was because the public had been educated as to its use, not because the mark had any inherent capacity to distinguish. In other words, like the facts in Austereo v DMG Audio, the public had been educated about the new trade mark by its use in association with existing well-recognised trade marks. There are some findings of the primary judge which seem to support such an argument, but his Honour did not analyse the matter in that way. It is not possible for this Court to make findings about witnesses it has neither seen nor heard and review all of the documents in the case. 169 Had the appeals turned on the application of s 41(5), we would have allowed the appeals and ordered a retrial.

The primary judge's reasons 170 The opponents relied on four marks which were the subject of earlier applications and which related to comparable classes and designated goods and services: THE YELLOW ENVELOPE, YELLOW DUCK, YELLOW ZONE AND YELLOW DOOR. 171 The primary judge noted that the YELLOW DOOR mark, although on foot as at the Lodgement Date, had not been renewed and had been removed from the register. That raised a question as to whether it could form the basis of opposition to registration under s 44. The primary judge did not need to resolve that question because he was able to put the YELLOW DOOR mark to one side. He was able to do that because he held that the YELLOW trade mark was deceptively similar to the other three marks. As will be seen, we would overturn that conclusion. However, we do not need to consider the question either because we do not think the YELLOW trade mark is deceptively similar to the YELLOW DOOR mark for the same reasons it is not deceptively similar to the other three marks. 172 The primary judge said that the principles to be applied in order to determine whether a mark is deceptively similar to another mark were not in dispute, and he referred to the well-known cases of Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365; Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; (2004) 209 ALR 1; (2004) 61 IPR 212 ("Crazy Ron's"). There is no complaint about his Honour's statement of the relevant principles. 173 There was no dispute that Telstra's designated goods and services are the same or similar to some of the goods and services which are the subject of THE YELLOW ENVELOPE, YELLOW DUCK and YELLOW ZONE trade marks. 174 The primary judge held that the YELLOW trade mark was deceptively similar to each of the cited marks for five reasons. First, he said that the central or defining component and the one which would be left as an impression in the mind of the consumer in the case of the YELLOW trade mark and each of the cited marks was yellow. Secondly, he noted that the word yellow was at the beginning of each of the cited marks and it provided the initial visual and aural impression and it was likely to be the most significant in the mind of the consumer. Thirdly, although his Honour noted that the question of deceptive similarity was a matter for the Court, he noted that Telstra's position that the YELLOW trade mark was not deceptively similar to the cited marks was inconsistent with the position adopted by its in-house lawyers to the effect, among other things, that the YELLOW PAGES trade marks gave Telstra the exclusive rights to the word yellow in respect of directories. Fourthly, his Honour said that Telstra's position was inconsistent with its commercial practices and position before the Registrar of Trade Marks. He gave as an example, Telstra's contention that it had exclusive rights to the word yellow and that YELLOW DUCK was too close to the YELLOW PAGES marks to permit it to be registered. Finally, his Honour said that Telstra's position was inconsistent with its assertions that two of its campaigns - HELLO YELLOW and FIND IT IN YELLOW - involved the use of the YELLOW trade mark. If these campaigns involved use of the word yellow, then the YELLOW trade mark must be deceptively similar to the cited marks.

Analysis of the challenge to the primary judge's decision 175 Telstra's ground of appeal in relation to this ground of opposition is that it was irrelevant to take into account Telstra's history of protecting its YELLOW PAGES trade marks. That ground of appeal must be upheld. 176 His Honour did not accept that the YELLOW PAGES trade mark conferred on Telstra the exclusive right to use the word yellow or that the HELLO YELLOW or FIND IT IN YELLOW campaigns involved the use of the YELLOW trade mark (at [61]-[62], [77], [84]). Even leaving this aside, whether Telstra's stance had been consistent or otherwise was, with respect, completely irrelevant to the issue before the primary judge. 177 At one point, his Honour acknowledged this when he said that the question of deceptive similarity was a matter for the Court. However, he then said that the third matter was "significant" (at [338]) and, in addition, we note that three of the five matters he identified (at [335]-[341]) related to Telstra's position. We think it more likely than not that his Honour did place weight on these factors. With respect, he erred in doing so. 178 We think that the issue is a matter which this Court can consider and decide for itself. To the extent that evidence and findings of fact are relevant to the issue, they involve matters which are not in dispute. 179 The relevant principles with respect to deceptive similarity were set out by the primary judge and are not in dispute. We refer to those principles in paragraph 192 (9) below. 180 We note that the delegate in the opposition by Mr Khoury considered that the YELLOW trade mark was not deceptively similar to THE YELLOW ENVELOPE and the YELLOW DUCK. The delegate said that the latter were conceptually, phonetically and visually quite distinct from the former trade mark and that the word yellow in them tended "to fade as a strongly distinguishing feature of the potentially conflicting trade marks in the presence of an arbitrary noun which actually distinguishes the services" (at [65]). By contrast, the YELLOW trade mark consisting of the word "yellow" alone is a sole abstract concept, "apparently a noun which is the name of 'a bright colour like that of butter or lemons'". The delegate in the opposition by PDCA adopted this reasoning. He considered that the same position applied in the case of YELLOW ZONE mark which he said did not convey the same idea as the YELLOW trade mark and nor was it aurally similar (at [52]). 181 In our opinion, the reasoning of the delegates was correct and applies equally to the YELLOW DOOR mark. There are clear phonetic and visual differences between the marks. Furthermore, each of the cited marks conveys a different idea to the YELLOW trade mark. We consider the significance of the idea of a mark to the issue of deceptive similarity in the context of the appeal by Yellowbook (at [210]-[219]). Even when considered in light of the limited overlap with the relevant Telstra service, the use of YELLOW as a noun gives rise to different ideas from its use as an adjective in the context of an ENVELOPE, DUCK ZONE or DOOR. We are not disposed to see this as a borderline case, but even if we are wrong about that, we would be entitled to place weight on the opinions of the respective delegates (Yorkshire Copper Works Ltd v Registrar of Trade Marks (1954) 71 RPC 150 at 154 per Lord Simonds). 182 In our respectful opinion, the primary judge erred in upholding the opposition under s 44.

Conclusions 183 Sensis should be joined as a party to the application for leave to appeal. Leave to appeal should be granted. The appeals should be dismissed and Telstra should pay the respondents' costs of the appeals.

Background 184 By an application lodged on 1 October 2006, Yellowbook and Mr Khoury sought to register a trade mark "yellowbook.com.au" (application number 1138225) in respect of an online business directory listing both contact details and advertising information (the yellowbook mark). Telstra, the owner of four trade marks for Yellow Pages, opposed the application for registration. The Registrar of Trade Marks refused the application on 21 May 2010. Yellowbook and Mr Khoury appealed against this refusal but the primary judge, consequential on reasons published on 11 April 2014 (Phone Directories Company Australia Pty Ltd v Telstra Corporation Limited [2014] FCA 373), dismissed the appeal and made the following orders (amongst others) on 30 April 2014: 7. The First Applicant's appeal of the Delegate of the Registrar of Trade Marks' decision to refuse registration of Australian trade mark application number 1138225 be refused. 8. The Respondent's opposition to Australian trade mark application number 1138225 be allowed. 9. Australian trade mark application number 1138225 be refused. 10. The First Applicant pay the Respondent's costs of the proceeding concerning Australian trade mark application number 1138225. 185 Yellowbook and Mr Khoury contend that the primary judge erred in deciding that the application should be refused. They have filed an application for leave to cross-appeal and a Draft Notice of Cross-Appeal. It is convenient for us to refer to their application as the Yellowbook appeal. 186 In common with Telstra's proposed appeal, by s 195(2) of the Act, leave is required to appeal against the orders of the primary judge. 187 The Draft Notice of Cross-Appeal filed by Yellowbook and Mr Khoury identifies 23 separate errors said to have been committed by the primary judge in the reasons leading to the making of these orders (with another four further errors said to have been committed in respect of a decision on costs, which is dealt with separately below). Examination of the grounds discloses that they involve many ways of saying much the same thing. In any event, the alleged errors can be dealt with in two groups. The first group relates to s 44(2) of the Act concerning deceptively similar trade marks (grounds 1 to 18). The second group relates to the primary judge's consideration of s 44(3) of the Act concerning the honest concurrent user of the trade mark yellowbook.com.au (grounds 19 to 23).

The statutory provisions 188 The appeal before the primary judge, as before this Court, began and ended with the terms of s 44 of the Act. Section 44(2) is set out at [10] above. Section 44(3), which is relevant to the issue of honest concurrent use, and has not been set out previously, provides as follows: (3) If the Registrar in either case is satisfied: (a) that there has been honest concurrent use of the 2 trade marks; or (b) that, because of other circumstances, it is proper to do so; the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area. 189 Section 10 provided that: 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. 190 By s 14(2): For the purposes of this Act, services are similar to other services: (a) if they are the same as the other services; or (b) if they are of the same description as that of the other services.

Deceptive similarity - the primary judge's reasons 191 The primary judge referred to Yellowbook and Mr Khoury as "Yellowbook" (at [366]). He referred to the trade mark yellowbook.com.au as "the YELLOWBOOK Trade Mark" (also at [366]). He referred to the Telstra trade marks as "the YELLOW PAGES Trade Marks" (at [367]). 192 There is no dispute that the primary judge correctly identified: (1) the issue he had to determine at [368], being "whether the YELLOWBOOK mark is likely to deceive or cause confusion"; (2) the nature of the appeal as a hearing de novo (at [370]); (3) that Telstra, the opponent to the registration of the trade mark Yellowbook.com.au, bore the onus of proof on the balance of probabilities (at [371]); (4) the fact that Telstra's trade marks were registered before the application for registration of the trade mark yellowbook.com.au (at [374]); (5) that the application was to register the trade mark yellowbook.com.au in class 35 in relation to the following services (at [373]): An online business directory listing advertising information such as contact details, companies name, address, addresses, telephone, phone, fax, contact, names, web, WWW, categories per states email directory services business to business, coupons to the public Australia wide. (6) the relevant Telstra Yellow Pages trade marks, being those set out in the table at [375] as follows: Trade Mark Class Goods/services No. 545667 YELLOW PAGES 16 Telephone books, telephone directories and business directories No. 545668 YELLOW PAGES 35 Advertising services relating to the provision and promotion of telephone directories and telephone directory business supplements of all kinds (including directories and business supplements provided to users in tangible or intangible form and those held in magnetic, electronic, electro-optic or other media) including: agency services in respect of such directories and business supplements; advertising services promoting the services and goods of advertisers in such directories and business supplements in any medium; advertising survey services, including telephonic and electronic surveys, relating to telephone directories and telephone directory business supplements; and co-operative advertising with those who advertise in telephone directories and telephone directory business supplements No. 545669 YELLOW PAGES 38 Telecommunication services and telephone services No. 704079 YELLOW PAGES 9, 42 Class: 9 Telephones and telephone equipment, apparatus and systems; computer software, CD ROMs and modems; publications in electronic form including publications supplied on-line from databases or from facilities provided on the Internet (including web sites); all associated parts, accessories and fittings Class: 42 Computer programming services; consultancy services; computer software design services; computer rental services; providing facilities for exhibitions, seminars and conferences; research and development of technology, including research and development in relation to telecommunications goods and services, including directory goods and services in both electronic and non-electronic form; wholesaling and retailing services namely, wholesaling and retailing of telecommunications goods, including directory goods in both electronic and non-electronic form

(7) the fact that Telstra's Yellow Pages trade marks are registered in respect of similar services or closely related goods as required by ss 44(2)(a)(i) and (b) of the Act (at [375] and [384]); (8) the test for deceptive similarity as set out in s 10 of the Act, that "a trade mark is deceptively similar to another trade mark if it so nearly resembles that other mark that it is likely to deceive or cause confusion" (at [379]; see also [382]); and (9) the orthodox principles which inform the determination of issues of deceptive similarity at [322]-[325] as follows: [322] In Woolworths [Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020; (1999) 93 FCR 365] at [50] French J drew on the principles enunciated by Kitto J in Southern Cross [Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592] at 595, and set out the following general propositions with respect to deceptive similarity: … (i) To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring. A mere possibility is not sufficient. (ii) A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt. It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source. (iii) In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services. (iv) The rights of the parties are to be determined as at the date of the application. (v) The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained. In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v The Bali Company Inc (1973) 129 CLR 353 at 362: ...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion. [323] In Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 61 IPR 212 ("Crazy Ron's") at [84] the Full Court, per Moore, Sackville and Emmett JJ, explained the relevant principles. More recently, the principles were succinctly summarised by Perram J in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 81 IPR 354 at [95], where his Honour said: (1) The question of deceptive similarity is not to be judged by a side by side comparison. Instead what is involved is a comparison, on the one hand, of the impression based on recollection of an applicant's mark that persons of ordinary intelligence would have and the impression such persons would get from the respondent's mark. In that regard it is important to consider the "idea of the mark". (2) In assessing deceptive similarity, questions of aural impression may be important. In that context I regard the aural similarity between Malt Balls and Maltesers as negligible. (3) The risk of deception must be tangible but it is enough if an ordinary person entertains a reasonable doubt. (4) Allowance must be made for imperfect recollections in considering whether a mark so nearly resembles another mark that it is likely to cause confusion or deception. (5) That principle extends even to marks which are not just invented words. If a registered trade mark includes words which can be regarded as an essential feature of the mark, another mark that incorporates those words may well infringe the registered trade mark. … [325] There is no dispute of significance between the parties as to the relevant principles, only as to their application in the present case. 193 Consistently with those principles, the primary judge said (at [383]): The test does not involve a side by side comparison of the YELLOWBOOK and YELLOW PAGES trade marks but rather the overall impression that a person of ordinary intelligence and with a possibly imperfect recollection would have of the marks. The question is whether there is a real and tangible risk that the result of the use of the YELLOWBOOK mark will be that a reasonable person will be caused to wonder whether it might not be the case that its services are from the same source as the YELLOW PAGES services. 194 At [385] the primary judge noted (also correctly) that: The closer the relationship between the services, the more likely any similarity in the marks will prove deceptive: Woolworths at [40] per French J. In the present case, where the two marks overlap the services are exactly the same. 195 At [386]-[394] the primary judge: (1) rejected the contention that because yellowbook.com.au was both a domain name and a trade mark it was in a "special position", having a "hybrid role", which set the trade mark apart from the ordinary principles governing the resolution of deceptive similarity issues; (2) concluded instead that: the addition of ".com.au" or ".net.au" as a suffix to a word mark, so that it represents a domain name as well, does not mean that the trade mark is to be considered differently. The words yellowbook.com.au may function as both a domain name and a trade mark but the same rules apply to its registration; (3) noted that: The symbol ".com.au" is common to many Australian domain names and simply signifies that the relevant website is that of a business in Australia. There is nothing distinctive in this component of the YELLOWBOOK mark, and in my view it is unlikely to play any part in indicating the commercial origin of the designated services. Nor are these common and non-distinctive words likely to be recalled by consumers or leave an impression on them; (4) said that the common practice of the Trade Marks Office was to disregard the ".com.au" element and that this had been an agreed position in the hearing before the delegate, an approach with which the primary judge said he agreed; (5) observed that this was consistent with the approach in both Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139 at [21] that the suffix ".com.au" merely indicated "that details of the business are to be found electronically, on the Internet" and Sports Warehouse v Fry Consulting at [155] that "the prefix "www." and suffix ".com" are merely indicia of a domain name"; and (6) accordingly, said he gave the ".com.au" component of the mark "little significance" in his analysis of deceptive similarity. 196 The primary judge, on this basis, then reasoned that: (1) the distinctive element of the trade mark yellowbook.com.au is the element "yellowbook" which is made up of two words, "yellow" and "book", and which must be considered against the Telstra trade marks (at [395]); (2) the word "yellow" is an important feature of the trade mark yellowbook.com.au and the Telstra trade marks. It is the first word in each mark, it is more distinctive than the words "book" or "pages", and it is the word which will leave the impression (at [396]); (3) the words "book" and "pages" are not distinctive (at [396]-[400]) but connote the same concept, with the one word resembling the other, both being "likely to be associated with a book". Those words thus convey "the same idea which would cause them to be remembered by consumers in the same way" (at [400]); (4) as both marks are in respect of directories, "consumers will likely take the idea of a book to be a reference to a directory. Both marks therefore create the impression of a directory, which is described as being "yellow", which also "illustrates their similarity" (at [401]); (5) the marks are "visually and aurally similar", in that they "start with the same word followed by another word of one syllable" (at [402]); (6) while the composite Yellow Pages trade marks include the walking fingers logo this is "not easily pronounceable and it is unlikely to be used by consumers speaking of the mark, and it is unlikely to be typed into an internet search" (at [403]); (7) "the fact that both marks are in respect of online business directories means that the services are likely to be marketed to and used by the same type of consumers" (at [404]); (8) such consumers, who must be considered (citing Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 ("Cooper Engineering") at 538), "are not making a purchase at all, and are instead accessing a free service to obtain a telephone number or address. It is unlikely that such consumers will be discerning as to subtle differences in the branding of such a service" (at [406]); (9) such consumers will also (at [407]): often access the directory at the same time the information is needed and will want the answer speedily. Often access will occur while consumers are involved in other activities, including while in transit, through smart phones, tablets and similar devices. I have little doubt that consumers will give scant consideration to small differences in branding in these circumstances; (10) Telstra's trade marks cannot be said to be so well recognised that no deception or confusion would arise, so that the case is not comparable to Australian Postal Corporation v Digital Post Australia Pty Ltd (No 2) [2012] FCA 862 where it was found that the word mark "Digital Post" was not deceptively similar to "Australia Post". Specifically (at [409]): (a) in Marshall J's view (at [59]) the purchasers of a digital mail service would be careful in their selection, while in my view users of a free online directory service are unlikely to be discerning; (b) the only different words between YELLOWBOOK and YELLOW PAGES are "book" and "pages" both of which are associated with the same idea which points to the similarity of the marks. In Digital Post the two different words were "Digital" and "Australia" which shows their dissimilarity; and (c) both the YELLOWBOOK and YELLOW PAGES marks start with the same word, namely the word yellow, which is not the case in Digital Post; and (11) in conclusion, "there is a real risk that consumers will be misled or confused if the YELLOWBOOK Trade Mark is registered. I consider it to be deceptively similar to the YELLOW PAGES Trade Marks" (at [412]).

Deceptive similarity - discussion 197 According to the submissions for Yellowbook and Mr Khoury the primary judge's analysis of the issue of deceptive similarity was riddled with error. As explained below, however, there appears to be only one immaterial error in his Honour's analysis and one potential inconsistency which is readily able to be resolved. 198 The immaterial error can be noted briefly. At [402] the primary judge described the yellowbook.com.au mark and the Telstra yellow pages mark as starting with the same word followed by another word of one syllable. The Telstra mark starts with yellow and ends with a word of two syllables. This immaterial error was not one of the numerous grounds on which the primary judge was said to have erred and thus it may be disregarded. 199 The potential inconsistency is that the primary judge said he agreed with the delegate that the ".com.au" suffix should be ignored at [391], but after further analysis said he gave that component of the mark "little significance" at [394]. On a fair reading of the whole of this part of his Honour's reasons, and having regard to the fact that before the delegate the parties agreed that the ".com.au" component of the yellowbook.com.au mark should be ignored (a fact the primary judge accurately recorded at [391]), it should be understood that the primary judge's overall conclusion was that the ".com.au" component of the yellowbook.com.au mark had little significance in assessing deceptive similarity. 200 This, said Yellowbook and Mr Khoury, meant that the primary judge found deceptive similarity by disregarding half of the yellowbook.com.au mark. The ".com.au" signified that the mark related to a domain name which militated against any conclusion of deceptive similarity. Moreover, the primary judge did so by illegitimately comparing the idea of the marks rather than the marks themselves. While the idea of a mark is a legitimate consideration in respect of pictorial and device marks, it cannot be a substitute for the text of s 10 which requires the marks themselves, being the whole of the marks, to so nearly resemble each other that it is likely to deceive or cause confusion. For word marks, such as the present, the primary judge's focus on the idea of the marks has led him into error. 201 These submissions are not persuasive. 202 First, the primary judge did not disregard or, as it was put, "parse" the trade mark so that it became equivalent with the idea of a yellow book which was then found to be deceptively similar to the idea of Telstra's yellow pages marks . The primary judge gave little significance to the ".com.au" part of the mark for the reasons he explained, particularly the lack of distinctiveness of that suffix and the nature of the consumers who would be using a free service, likely to be doing so in a rush, and unlikely to be giving other than scant attention to small differences in branding. 203 As a matter of principle the primary judge's reasoning is correct. There is no hard and fast rule concerning the significance of a domain name suffix, although when two domain names are being compared, the significance might usually be limited. But, as the primary judge concluded, in the circumstances of this case, and having regard to the nature of the consumers, the suffix had little significance. The primary judge's analysis is also consistent with authority, as the primary judge explained at [405] by reference to Cooper Engineering at 538. 204 In REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559; (2013) 217 FCR 327 ("REA Group") the issue involved trade marks which were also domain names, realestate.com.au and realestate1.com.au. Justice Bromberg said: [127] In determining whether one name suggests the business of another, the subsidiary elements of a name are generally not regarded as significant. Thus in Hornsby [Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216], the locality word ("Sydney") which prefixed the three descriptive words was given no particular weight. The comparison made was focused upon the dominant descriptive words alone. Similarly, in British Diabetic Association v Diabetic Society Ltd, the prefix "British" was "put on one side" in the comparison made between "British Diabetic Association" and "Diabetic Association": [1995] 4 All ER 812 at 831 (Robert Walker J). [128] The lack of attention which may be paid to a suffix such as ".com.au" is illustrated in Architects Australia [Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139]. In that case a comparison was made between the names "Architects Australia" and "architectsaustralia.com.au". To the suggestion that ".com.au" differentiated the two names, Chesterman J said at [21]: The words in contest in this case are not merely similar, they are precisely the same. The extended suffix ".com.au" does not detract from this conclusion. It does no more than indicate that details of the business are to be found electronically, on the Internet See further (but in a trade mark context) Kenny J in Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519 at [155]. [129] When considering whether the use of "www.solarhut.com.au" was deceptively similar to "SOLAHART" in relation to an allegation of trade mark infringement, Perram J in Solahart Industries Pty Ltd v Solar Shop Pty Ltd (2011) 281 ALR 544 said at [49]: In the context of domain names, one should put to one side in the analysis the various accoutrement of domain names such as "www" and ".com.au" to which consumers do not pay [sic] any substantive attention. [130] The tension created by ".com.au" being both essential to the term "realestate.com.au" being recognisable as a name or brand but at the same time subsidiary (because substantive attention will not ordinarily be given to it), means that the term is not readily recognisable as a name. In the absence of prior familiarity, it is only faintly recognisable as an intended name for a business or brand. The act of recognition requires a focus and attention not required when a distinctive word or phrase is recognised as a name or brand. The additional scrutiny given to a name not readily recognisable as such, means that in a comparative exercise with a very similar term, including an exercise based on recollection, small differences are more likely to be noticed. 205 Justice Bromberg continued: [238] I do not accept Real Estate 1's contention that for all purposes, an assessment of deceptive similarity in the context of domain names must involve the court ignoring what Perram J in Solahart described at [49] as "the various accoutrement of domain names such as 'www' and '.com.au'". Perram J continued that accoutrements of that kind are not paid substantive attention by consumers. He said: These do not have any impact on the questions either of substantial identicality (from which analysis they must be excised) or on deceptive similarity. [239] Real Estate 1 relied on that observation. However, I do not understand Perram J to have there been making an all encompassing statement of the kind that Real Estate 1's contention suggests. His Honour was there dealing with the use of the trade mark SOLAHART in the domain name "www.solarhut.com.au". The comparison in that case was between a concocted name registered as a trade mark and the use of a very similar word ("solarhut") as part of an internet address. All that I think Perram J was saying was that substantive attention is not paid by consumers to the common accoutrements of an internet address when seeking to identify or distinguish a brand, because of the usually limited function of accoutrements in that context. When used as part of an internet address, "www" and ".com.au" do not ordinarily serve the function of providing cues to brand or product identity. In that context, consumers in pursuit of brand identity are likely to be oblivious to terms that will not be ordinarily recognised as dealing with brand identity. [240] Where, however, a trade mark itself incorporates the accoutrements of a domain name as cues to product or brand identity, the position is different to that considered by Perram J. It is clearly different when the use of the same accoutrements as those incorporated in a trade mark are used not as cues to an address but, like the trade mark itself, as cues to the brand or trading identity of a product or a business… [241] In my view, the display of the term "realestate1.com.au" in the heading of a sponsored link would have been regarded by many consumers to be the trading and domain name of the business whose link it was. One of the central distinguishing features of REA's realestate.com.au trade marks is the idea that the term "realestate.com.au" is both a brand name and a domain name at the same time. When Real Estate 1 used "realestate1.com.au" as a trading name, it took up that precise idea. In that context consumers are likely to pay substantive attention to ".com.au" because it serves the function of identifying the brand whose domain name is also being used as a brand. The whole of the domain name is likely to be read or at least scanned. In a circumstance such as that, there was in my view, a real danger of confusion on the part of a consumer familiar with REA's realestate.com.au trade marks. That principally arises because in a scanning process of the kind which can occur on a search results page, the "1", which is not very distinct in the context of a domain name in ordinary type face, is likely to be missed by some consumers. 206 It must be recalled that Bromberg J was dealing with two marks each of which was also a domain name. In the present case, the mark yellowbook.com.au was also a domain name for the service of an online directory, whereas the Yellow Pages marks did not involve a domain name but were also for directory services including services provided online. In that context, of consumers using the two online services, the primary judge was satisfied that the ".com.au" component would not itself be distinctive and warranted being given little significance. The reasoning in REA Group depended on its own facts and evidence and does not suggest any error by the primary judge in the present case. As the primary judge concluded, when dealing with marks in respect of the same services, online directories provided for free, the nature of the consumer is critical to the assessment of deceptive similarity. We agree with the primary judge's view that consumers of these free online services will be paying scant attention to a non-distinctive suffix ".com.au" irrespective of the professed intention of Yellowbook that this forms an integral part of its branding. 207 Secondly, the argument sought to be made that the services to which the marks related are closely related but not necessarily the same does not go far. The point the primary judge was making, and about which he was correct, is that the main Yellow Pages mark in class 35 and the yellowbook mark (at [404]): are in respect of online business directories means that the services are likely to be marketed to and used by the same type of consumers. Both services are provided over the internet and are directed at Australian consumers. 208 The submission that this Telstra mark is not in respect of "an online business directory", as is the yellowbook mark, is without merit. The Telstra mark is used in respect of an online business directory, such use being within the scope of the class 35 registration. Even if it be the case that Telstra had engaged in blocking of internet search engines, as the primary judge found, the evidence fell short of establishing that searches for yellowbook would not also produce results from Yellow Pages, and that this was merely one consideration amongst many (at [411]). Yellowbook and Mr Khoury did not explain how the primary judge could be said to have erred in this regard, other than a bald assertion that his factual finding was wrong. 209 Thirdly, although there is visual and aural similarity in this case, we do not accept the submission that the primary judge was not entitled to consider the idea of the marks that would be left in the mind of consumers because the marks are word and not pictorial or device marks. 210 There are statements in some of the authorities that, if read in isolation, might suggest that the idea of a mark can only be considered once visual or aural similarity is found. For instance, in Sports Café Ltd v Registrar of Trade Marks (1998) 42 IPR 552 ("Sports Café Ltd") at 557, the Full Court of this Court said that: the fact that two marks convey a common idea becomes relevant only if the marks themselves look or sound alike. Commonality of idea might then tip the balance in favour of a finding that the likeness is deceptive. 211 We consider that the point that the Full Court was expressing in this passage was that ideational similarity is not sufficient independently of a consideration of whether the marks look or sound alike. As we explain below, the idea of a mark must still be relevant to an assessment of whether the two marks look and sound alike. Indeed, immediately before the passage quoted above, the Full Court had quoted from the decision of the High Court of Australia in Cooper Engineering. The High Court said (at 538-9): The two words are so unlike to the eye and to the ear that counsel for the appellant was forced to rely on the likelihood of deception arising from the two words conveying the same idea of the superiority or supremacy of the article … But it is obvious that trademarks, especially word marks, could be quite unlike and yet convey the same idea of the superiority or some particular suitability of an article for the work it was intended to do. To refuse an application for registration on this ground would be to give the proprietor of a registered trademark a complete monopoly of all words conveying the same idea as his trademark. The fact that two marks convey the same idea is not sufficient in itself to create a deceptive resemblance between them, although this fact could be taken into account in deciding whether two marks which really looked alike or sounded alike were likely to deceive. As Lord Parker said in the passage cited, you must consider the nature and kind of customer who would be likely to buy the goods. 212 The comments by the High Court which were being summarised in the quotation by the Full Court in Sports Café Ltd were emphasising the point that mere ideational similarity is not sufficient, although s 10 of the Act contains no such express restriction. Even then, it has been observed by Professors Burrell and Handler that the comments of the High Court were "closely tied to marks that are suggestive of the qualities or characteristics of the goods or services in question". Hence, it is arguable that it could be consistent with the decision in Cooper Engineering for a court to conclude that despite the absence of visual or aural similarity, the word mark "Red Star Brand" for glass is a mark that "so nearly resembles" the picture mark of a star on glass "that it is likely to deceive or cause confusion": Burrell R and Handler M, Australian Trade Mark Law (Oxford University Press, 2010) 183-184 citing La Societe Anonyme des Verreries de l'Etoile's Trade Mark (1894) 11 RPC 142. But the short point relevant to this case is that the commonality of idea is part of the process of determining if the marks look or sound alike. 213 It was said in submissions by Yellowbook and Mr Khoury that Jafferjee v Scarlett (1937) 57 CLR 115 ("Jafferjee v Scarlett"), in which reference was made to the importance of the idea of a mark at 121, concerned pictorial marks and nothing therein supported use of that concept for word marks. Jafferjee v Scarlett, it may be accepted, involved pictorial marks. However, as explained at 122 the "idea of the mark" is a tool courts use to assist their analysis in recognition of the fact that consumers, unlike a court, do not have the opportunity to compare marks side by side. The usual circumstance is that a consumer will see one mark and have a memory of the other mark. Because the issue is whether or not the consumer is likely to be deceived, and not whether on a side by side comparison of the two marks a court considers consumers might be deceived, the "idea of the mark" enables the court to place itself, as best as possible, into the minds of the consumer. Nothing in Jafferjee v Scarlett suggests that this analytical tool is confined to pictorial or device marks. No rational reason for excluding this approach from consideration when it comes to word marks has been put forward. Subsequent authority is also to the contrary. 214 Crazy Ron's involved both a composite mark and a word mark. In discussing the relevant principles at [72] to [81], the Full Court referred to the idea of the mark and drew no distinction between word and pictorial or device marks (see also the decision of the Full Court in Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58; (2010) 185 FCR 9 at [91]). To the contrary, the Full Court in Crazy Ron's referred with approval to Aristoc Ltd v Rysta Ltd [1945] AC 68; (1944) 1B IPR 467; [1945] 1 All ER 34 which involved two word marks, in particular the observation of Viscount Maugham adopting the reasoning of Luxmoore LJ in the Court of Appeal in Re Rysta Ltd's Application [1943] 1 All ER 400 at 407; (1943) 60 RPC 87 and 108-9 that: The answer to the question whether the sound of one word resembles too nearly the sound of another so as bring the former within the limits of the Trade Marks Act 1938, s 12, must nearly always depend on first impression, for obviously a person who is familiar with both words will neither be deceived nor confused. It is the person who only knows the one word, and has perhaps an imperfect recollection of it who is likely to be deceived or confused. Little assistance, therefore, is to be obtained from a meticulous comparison of the two words letter by letter and syllable by syllable pronounced with the clarity to be expected from a teacher of elocution. The court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description, but also of the shop assistance ministering to that person's wants. 215 Justice Parker, in Re Application by Pianotist Company Ltd (1906) 1A IPR 379 at 380, said: You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion - that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods - then you may refuse the registration, or rather you must refuse the registration in that case. 216 This is what the primary judge did. 217 Further, in Berlei Hestia Industries Ltd v Bali Co Inc [1973] HCA 43; (1973) 129 CLR 353 ("Berlei v Bali") the High Court dealt with two word marks, Berlei and Bali-Bra. As the Full Court explained in Crazy Ron's: [78] Aristoc v Rysta was applied by the High Court in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353; 1 ALR 443. The proprietor of the trade mark BERLEI, registered in respect of clothing, succeeded in expunging from the register the trade mark BALI-BRA, registered in respect of brassieres. Mason J (with whom Stephen J agreed) held that the use of BALI-BRA "would be likely to deceive or cause confusion" within the meaning of s 28(a) of the Trade Marks Act 1955 (Cth). His Honour considered (at CLR 362; ALR 449) that the strength of the proprietor's case lay in the finding that the two marks were phonetically alike, one being pronounced "Burley" and the other "Barley". Mason J accepted that the likelihood of confusion arising from phonetic similarity was reduced because the evidence showed that brassieres were usually bought after inspection or a fitting. But, his Honour said (at CLR 362; ALR 450): … that risk is not eliminated. No doubt orders are sometimes placed by telephone. And in considering the likely reaction of a customer it is important to take into account, not the person whose knowledge of the two marks and the goods sold under them enables her to distinguish between them, but the person who lacks that knowledge. As Luxmoore LJ said in Rysta Ltd's Application: "It is the person who only knows the one word, and has perhaps an imperfect recollection of it, who is likely to be deceived or confused." See, too, a decision of the House of Lords to the same effect on similar facts in Berlei (UK) Ltd v Bali Brassiere Co Inc [1969] 2 All ER 812. [79] Fifth, the authorities also recognise that the concept of imperfect recollection may be applied to trade marks other than those consisting simply of an invented word (as in Aristoc v Rysta and Berlei v Bali). If a registered trade mark includes words which can be regarded as an essential feature of the mark, another mark that incorporates those words may well infringe the registered trade mark. The other mark may also infringe if there is a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of the words constituting an essential feature of the registered mark. 218 The submissions for Yellowbook and Mr Khoury did not explain how the proposition, that the "idea of a mark" was relevant only to pictorial or device marks and not to word marks, could be reconciled with the decisions in Berlei v Bali, Cooper Engineering and Crazy Ron's. Nor did they provide any principled basis to confine the reasoning in those cases, and Jafferjee v Scarlett, to pictorial or device marks. In summary, we agree with the observation of Greenwood J in NV Sumatra Tobacco Trading Co v British American Tobacco Australia Services Ltd [2011] FCA 1051; (2011) 198 FCR 435 at [49] that: although words conveying the same idea cannot enable a de facto monopoly to arise, the fact the two marks convey the same idea can be taken into account in deciding whether the two marks which look and sound alike are likely to deceive or cause confusion. The presence of a common idea may be more likely to be recalled in connection with the relevant transaction than the precise details of the mark: Jafferjee v Scarlett (1937) 57 CLR 115 at 121 and 122; [1937] ALR 404 at 407. However, everything depends upon context as the suggestion of differing ideas may also serve to reduce the risk of confusion: Johnson & Johnson v Kalnin (1993) 114 ALR 215 at 219 ; 26 IPR 435 at 440. 219 Having found that the impression that would be left in the mind of relevant consumers would be yellow (book and pages being parts of the marks but less distinctive, and .com.au being of little significance), the primary judge found visual and aural similarity between the marks (at [402]). Yellowbook is visually and aurally similar to Yellow Pages. In the context of the relevant consumers, the finding of deceptive similarity was sound. The submission for Yellowbook and Mr Khoury should be rejected. The primary judge did not err in his analysis by reference to the idea of the marks. 220 Fourthly, the notion that the primary judge recited but failed to apply the definition in s 10 of the Act finds no support in his Honour's reasons. The primary judge's analysis was directed to determining whether or not the yellowbook mark did so nearly resemble the Telstra marks that it is likely that the yellowbook mark would deceive or cause confusion. Although framed as a plea against illegitimately substituting glosses for the statutory test in s 10, when analysed, the submissions for Yellowbook and Mr Khoury amount to the proposition that when compared side by side the mark yellowbook.com.au cannot be said to so nearly resemble the Yellow Pages marks that it will be likely to deceive or cause confusion. That this is so is apparent from the submission that the "character string" yellowbook.com.au, objectively, cannot be said to so nearly resemble the "character string" Yellow Pages so as to be likely to cause deception or confusion. If one thing is clear from the authorities, however, it is that a side by side comparison is wrong in principle because it cannot disclose whether the disputed mark is likely to deceive or cause confusion. Accordingly, the approach of the primary judge was orthodox and consistent with principle. The submissions for Yellowbook and Mr Khoury involve an invitation to enter into error. 221 It may be accepted that the fact that two words convey the same idea is insufficient to satisfy s 10. But that is not what the primary judge found. Nor is it the case that the primary judge's reasoning gives Telstra a monopoly over any words that convey the idea of a collection of yellow pages. These submissions appear to overlook the closely related services to which the trade marks related, the prominence of the word yellow in the various marks, the non-distinctiveness of the words pages and book, and the circumstances in which consumers would be confronted by the yellowbook mark. 222 To the extent that it was submitted that the Yellow Pages marks are so strong that consumers would notice even subtle differences so that there was no plausible, let alone tangible and real, risk that the yellowbook mark would be likely to deceive or cause confusion, no error in the analysis of the primary judge was identified. The primary judge rejected that proposition for a number of reasons, not the least of which was the circumstances in which consumers would see the mark, that is, in trying to find or to use a free service, where they would be paying scant, if any, attention to subtle differences in branding. The submissions for Yellowbook and Mr Khoury failed to grapple with that conclusion of the primary judge and its significance for the conclusions he reached. In failing to do so, they thus also failed to articulate any error which would warrant the grant of leave to appeal. In common with the primary judge, why it is that the fact that yellowbook.com.au constitutes a domain name would remove any possibility of deceit or confusion remains in the realm of assertion, unconnected to the factual analysis carried out by the primary judge about the consumers who would be confronted with the disputed mark and the circumstances in which they would do so. 223 It was otherwise submitted that the primary judge's conclusion that it is the word yellow in the yellowbook mark and the Telstra Yellow Pages marks that would leave an impression with consumers was inconsistent with his earlier conclusion at [233]-[234], in the context of Telstra's appeal, that Telstra's proposed mark "yellow" was not distinctive. Yet the exercises in which the primary judge was engaged were different. In one case he was considering whether the word "yellow" was inherently adapted to distinguish Telstra's goods and services. He found it was not. In the other case he was considering whether the yellowbook mark so nearly resembled Telstra's Yellow Pages marks so as to be likely to deceive or confuse. In that context, it was necessary for the primary judge to consider the marks as a whole (which, contrary to the submission for Yellowbook and Mr Khoury, he plainly did) and for him to consider also the impression which the marks would leave in the minds of the relevant consumers. It does not follow that, in the context of determining deceptive similarity, the primary judge had to first find that "yellow" was inherently able to distinguish before he could logically conclude that the impression left by the yellowbook mark and the Telstra marks would be yellow. Contrary to the submissions for Yellowbook and Mr Khoury, it cannot be said that the primary judge, in so concluding, improperly reduced a complex composite mark to a single word, contrary to the caution expressed in Crazy Ron's at [100]. The marks in the present case are not complex composite marks. They are relatively simple word marks, a point the primary judge rightly noted at [402]. 224 Nor does the fact that the primary judge, in the context of Telstra's appeal in respect of its proposed "yellow" trade mark, concluded that yellow is the colour internationally associated with business directories (at [140]) assist Yellowbook and Mr Khoury. It is Australian consumers, not international consumers, who would be faced with the yellowbook mark and the Telstra marks. In the Australian context, for many years, Telstra was a monopoly and, on the evidence, remains the overwhelmingly dominant provider of directory services. The submission for Yellowbook and Mr Khoury assumes that, in such a context, an Australian consumer would simply think of a business directory when confronted with yellow, rather than a Telstra business directory. But given Telstra's pre-existing marks in that context, the primary judge's conclusion of the real likelihood of confusion was sound. 225 The submissions otherwise constituted assertions that the primary judge should have found different facts, such as that the consumers of the two services would be different as consumers did not recognise Yellow Pages as having an online manifestation. These assertions were based on nothing more than a different view of the weight of the evidence from that taken by the primary judge in circumstances, moreover, where the same submission had been put to and rejected by the primary judge. The primary judge, for example, said at [410] that: Yellowbook submits that Mr Harvy's evidence is that consumers did not recognise that the YELLOW PAGES directories were available in an online as well as printed form. Based on this view of the evidence Yellowbook argues that if consumers are not aware that YELLOW PAGES Online existed they could hardly be deceived into thinking that yellowbook.com.au was in fact YELLOW PAGES Online. But this is not Mr Harvy's evidence. In my view his evidence is that Telstra wanted to improve consumer recognition of Telstra's online directory, but he did not suggest that consumers did not recognise and use it. The evidence shows that Telstra's marketing efforts were directed both at maintaining and increasing consumer recognition and use of its online directories. 226 The same submission rejected by the primary judge is made in support of the application for leave to appeal by way of mere assertion that the facts found by the primary judge were wrong. Nothing, however, discloses any error by the primary judge in his weighing up of the evidence and the drawing of inferences therefrom. 227 These conclusions dispose of most of the proposed grounds of the Yellowbook appeal. 228 Proposed ground 7 is that the primary judge erred by assuming that "book" could not be a verb. The proposed ground was not developed in any meaningful way. It is not apparent what difference results from treating "book" as a verb other than that, when preceded by the word "yellow" the phrase "yellowbook" becomes difficult to comprehend at all. In any event, if the primary judge made that assumption, it may be inferred to be one that relevant consumers would also make. The point, accordingly, does not assist Yellowbook and Mr Khoury. 229 Proposed ground 10 is that the primary judge erred by imputing to consumers knowledge of the classes in which the Telstra marks were registered and the yellowbook mark sought to be registered. Again, this proposed ground was not developed. The primary judge's reasons do not bear out this proposed ground. 230 Proposed ground 12 is that the primary judge erred in concluding that yellowbook and Yellow Pages were visually and aurally similar and the required comparison was between yellowbook.com.au and Yellow Pages. This is a variant of the submission that his Honour parsed the mark yellowbook.com.au, a submission rejected above. The primary judge's observation at [402] that "the YELLOWBOOK and YELLOW PAGES marks are visually and aurally similar. They start with the same word followed by another word of one syllable", understood in context, relates back to his conclusions that the marks both convey the impression of yellow and neither book nor pages are distinctive. In any event, the primary judge explained the extent of visual and aural similarity found, being the same first word followed by another word (of one syllable said the primary judge, when pages is two syllables, but that is immaterial). The primary judge was not saying that the case was of the Berlei/Bali kind where the words, particularly when spoken, sound almost the same. 231 Proposed ground 13 alleges error in the primary judge's view that the Walking Figures logo which forms part of Telstra's composite mark is not easily pronounceable and could not be typed into an internet search (at [403]). This proposed ground also remained undeveloped. In any event, why any error in respect of one of Telstra's marks (if error there be) would lead to a different result is not apparent. Moreover, the primary judge was correct to observe that the composite mark, involving the walking fingers with Yellow Pages underneath, is not easily pronounceable and could not be typed into an internet search. The internet search would be for Yellow Pages, not Yellow Pages with walking figures logo. Further, nothing in the submissions explains why these observations were irrelevant or illegitimate for his Honour to consider. 232 Proposed ground 15 is that the primary judge erred by regarding as relevant the fact that consumers would be likely to access the website for yellowbook.com.au at the same time as they needed the information. To the contrary, this was highly relevant to the likelihood of deception and an inference the primary judge was entitled to draw from the very nature of the service in respect of which the yellowbook mark was sought to be registered. A consumer who wants to find business contact details is not engaging in a substantial purchase as a result of careful consideration and forethought. Such a consumer, as the primary judge said, is using a free service and most likely paying scant attention to branding differences. 233 Proposed ground 16 is that the primary judge failed to consider the argument that the Yellow Pages marks are so strong that no deception or confusion is likely. It is said that, despite the primary judge having considered precisely this issue at [408], he did so only in the context of the decision in Australian Postal Corporation v Digital Post Australia Pty Ltd (No 2) [2012] FCA 862 and should have considered the same issue separately from that decision. This proposed ground lacks any merit. The primary judge dealt with the argument. No more can be said. 234 Proposed ground 18 is that the primary judge erred in placing the onus on Yellowbook and Mr Khoury to prove that search results for yellowbook would not also produce results for Yellow Pages when, as the opponent to registration, Telstra bore this onus. This is a reference to [411] of his Honour's reasons. However, his Honour well understood that Telstra bore the onus of establishing deceptive similarity (at [371]). Without entering the fraught waters of evidentiary and other forms of onus, the fact is that Yellowbook and Mr Khoury positively asserted that a search for yellowbook would not have yielded results for Yellow Pages because Telstra had engaged in search engine blocking. Telstra did not have to disprove that in order to succeed in its opposition. If the evidence had established that matter as a fact, then perhaps it would have been entitled to some weight. But, as the primary judge said, the evidence did not establish that fact and, in any event, it was only one aspect of deceptive similarity on which Telstra relied. 235 For these reasons none of the proposed grounds of appeal relating to s 44(2) of the Act are sustainable.

Honest concurrent use - the primary judge's reasons 236 The primary judge dealt with the issue of honest concurrent use at [414]-[422] of his reasons. 237 At [415] and [416] the primary judge set out the considerations which have been said to be relevant to honest concurrent use in McCormick & Co Inc v McCormick [2000] FCA 1335; (2000) 51 IPR 102 and Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252. It is not necessary that those considerations be repeated here, other than to say that the likelihood of confusion is a recognised relevant consideration. 238 At [417] the primary judge correctly recorded that the onus of proving honest concurrent use was that of Yellowbook and Mr Khoury. 239 The primary judge gave reasons for rejecting the claim of honest concurrent use in the following paragraphs: [418] Firstly, YELLOWBOOK is visually and aurally very similar to YELLOW PAGES, both contain the same essential feature which is the word yellow, and through the use of "book" and "pages" both convey the same idea of a yellow directory. Telstra has been operating its online directory at www.yellowpages.com.au since 1994, well before Yellowbook was incorporated and well before the YELLOWBOOK website commenced in January 2006. Yellowbook was aware of the well-known YELLOW PAGES Trade Marks, yet it chose to use a mark in respect of exactly the same services that closely resembled them. [419] Secondly, it is significant that Yellowbook's two earlier attempts to register trade marks featuring the word YELLOWBOOK were the subject of adverse reports by the Trade Marks Office on the basis of the YELLOW PAGES and YELLOW trade marks. The attempt in the present case simply involved the addition of the non-distinctive prefix "www" and suffix ".com.au" which did not reduce the similarity of the mark. That this did not add to the distinctiveness of the mark would have been plain from consideration of the Trade Marks Office Manual or a review of the authorities. It is significant too that prior to applying to register the YELLOWBOOK mark in Australia, Yellowbook was injuncted by YPG IP Ltd in New Zealand for attempting to use the mark in that country: see YPG IP Limited. [420] Thirdly, Mr Khoury conceded in cross-examination that Yellowbook and its predecessors and related companies had registered a number of well-known trade marks of other directory providers. I do not find that Yellowbook is a cyber-squatter, but there is little evidence that it operates a viable business. Rather, it is likely that its business model is to make itself a sufficient nuisance to Telstra such that Telstra is motivated to purchase it. The evidence shows that Mr Khoury sought proposals from Telstra to purchase the YELLOWBOOK online directory in October 2006. [421] Fourthly, Mr Khoury suggested in his evidence that following Telstra's failure before the WIPO in relation to the Yellowbook domain name he believed that Telstra was satisfied with his continued use of the YELLOWBOOK mark. This evidence was untrue. In cross-examination he conceded that Yellowbook had been informed in plain terms that Telstra continued to object. [422] Yellowbook failed to establish that its use of the YELLOWBOOK mark was honest concurrent use under the Act. But even if it had been able to establish its honest concurrent use I would exercise my discretion to refuse registration of the mark. In my view there is a high likelihood that consumers will be misled or confused by the similarity of the YELLOWBOOK and YELLOW PAGES marks. There is no real scope to limit the YELLOWBOOK mark to a particular area or by particular conditions and it should not be registered.

Honest concurrent use - discussion 240 It may be accepted at the outset that s 44(3) is premised on a finding of deceptive similarity. By s 44(2) an application must be rejected if, relevantly, it is deceptively similar to a pre-existing trade mark. Section 44(2), however, is subject to ss 44(3) and (4). Section 44(3) operates if, relevantly, the Registrar is satisfied that there has been honest concurrent use of the two trade marks which, logically, must include the deceptively similar trade mark for which registration must be refused by operation of s 44(2) (or, for that matter, s 44(1) dealing with goods). 241 Acceptance of these propositions does not mean that the deceptive similarity of the trade mark to a pre-existing mark is an irrelevant consideration when applying s 44(3). The point the primary judge was making at [418] is that this was not, in his view, a borderline case about which he might possibly have reached a different view. What his Honour was conveying, albeit using different language, was that the likelihood of confusion about the source of Yellowbook's services in the relevant circumstances was high. So much is apparent from [422] in which the primary judge said that in his view "there is a high likelihood that consumers will be misled or confused by the similarity of the YELLOWBOOK and YELLOW PAGES marks". 242 Accordingly, it cannot be said that his Honour erred in taking into account the nature, degree and extent of the likely deceptive similarity between the marks when dealing with the claim of honest concurrent use. Proposed ground 20 therefore must fail. So too must proposed ground 22 which asserts a lack of an evidentiary foundation for any finding that the disputed mark connotes Telstra's services. The relevant evidentiary foundation was that which supported his Honour's finding that the mark was likely to deceive and confuse. It is not necessary to repeat the matters set out above in which the primary judge identified the foundation for his conclusions to dispose of this proposed appeal ground. 243 Proposed grounds 19 and 21 relate to the WIPO Domain Name Decision in which Telstra failed in proceedings against Yellowbook and Mr Khoury in July 2006 in respect of the domain name, relevantly, yellowbook.com.au. The primary judge said at [421] that Mr Khoury gave untrue evidence about his belief that Telstra was satisfied with his continued use of the name. It was submitted that the primary judge's conclusion did not fairly reflect the evidence. We disagree. The cross-examination of Mr Khoury discloses that his affidavit was irreconcilable with his understanding of the true position that Telstra continued to object to his use of the name. Proposed grounds 19 and 21 cannot be substantiated. The primary judge was not bound to state in his reasons that he had taken into account the matters specified in proposed ground 19. The matters were plainly taken into account. His Honour was aware of the words involved in the marks, was aware of and expressly dealt with the WIPO decision, and did not have to give any weight to the fact (if it be the fact) that the use was not commenced or continued surreptitiously. A use may not be honest, even if done in the open. Indeed, with a service of an online directory it is hard to know how the use could have commenced or continued surreptitiously so the point is meaningless. Nor was the primary judge bound to give any weight to the fact that Telstra did not commence proceedings against Yellowbook and Mr Khoury after July 2006. The primary judge was not persuaded of honest concurrent use. Indeed, at [420] the primary judge characterised the use as one intended to make Yellowbook a "sufficient nuisance to Telstra such that Telstra is motivated to purchase it", Mr Khoury having actually offered to sell the Yellowbook online directory to Telstra in October 2006. That finding is inconsistent with any notion of honest concurrent use. 244 Other contentions, put in oral submissions, are equally without foundation. As the primary judge said at [419], it was relevant that there had been two failed attempts to register trade marks including the name yellowbook. The use continued despite those failed attempts. The fact that the trade mark was found to be registrable on the third attempt (the foundation for Telstra's opposition) does not mean that the earlier failed attempts, while use continued, became irrelevant. Further, it may be accepted that the reference to "www" in [419] was a slip. The mark sought to be registered does not have the prefix "www". But the error is immaterial. But for the error the position would have been worse in that all that had been added on the third attempt was the addition of the suffix ".com.au". 245 In proposed ground 23 it is contended that the primary judge erred by not separately considering ss 43 and 60 of the Act and assuming that the result under those provisions would follow from his conclusions about s 44. Given that the conclusion about s 44 determined the appeal, this proposed ground cannot alter the outcome. Accordingly, it would not be the subject of any grant of leave to appeal. In any event, the primary judge did not assume that the result would be the same under ss 43 and 60 merely because of the conclusion he reached under s 44. While his reasons at [423] are in an abbreviated form because it was unnecessary for him to decide the issues under ss 43 and 60, his Honour applied the particular statutory provisions to support his conclusions that the yellowbook mark also must be refused registration in accordance with ss 43 and 60. 246 For these reasons, while leave to appeal ought to be granted in respect of proposed grounds 1 to 22 (but not proposed ground 23 as explained above), the appeal should be dismissed with costs.

The costs orders 247 On 30 April 2014 the primary judge also made these orders in Telstra's Yellow appeal: 5. The Respondent pay the Applicants' costs of the proceeding concerning Australian trade mark application number 963492, save and except for the Applicants' costs of and relating to the purported assignment by the Second Applicant to the First Applicant of his right and interest in the opposition to Australian trade mark application number 963492, including the Applicants' appearance on 9 October 2012 and the correspondence, submissions and affidavit prepared by the Applicants in relation to the Second Applicant's purported assignment. 6. The Applicants pay the Respondent's costs of and relating to the Respondent's appearance on 9 October 2012 and the correspondence, submissions and affidavit material relevant to the purported assignment by the Second Applicant to the First Applicant of his right and interest in the opposition to Australian trade mark application number 963492, including any costs incurred by the Respondent by reason of it being ordered to pay the costs of the Applicant in VID 373 of 2011 in relation to the Second Applicant's purported assignment. 248 By order 6, Yellowbook Pty Ltd and Mr Khoury were ordered to pay Telstra's costs in connection with an assignment of the opposition to Telstra's trade mark by Mr Khoury to Yellowbook.

The primary judge's reasons 249 The primary judge published separate reasons in respect of the orders for costs (Phone Directories Company Australia Pty Ltd v Telstra Corporation Limited (No 2) [2014] FCA 418). 250 The primary judge's reasons for ordering Yellowbook and Mr Khoury to pay Telstra's costs relating to the assignment are as follows: [5] Telstra accepts that it should pay costs in the YELLOW Appeal, except for the costs of and relating to the purported assignment by Mr Khoury to Yellowbook of his rights and interest in the opposition to the YELLOW Trade Mark, which Telstra argues were unnecessarily incurred: see r 40.06 of the Federal Court Rules 2011. The Yellowbook Parties maintain that they are entitled to these costs. They argue that the assignment of Mr Khoury's interest was simply "good housekeeping" to deal with the consequences of an innocent administrative error that Mr Khoury had made when he commenced the opposition proceeding. [6] I do not accept the Yellowbook Parties' submissions in this regard. The surrounding circumstances are as follows: (a) for about four years prior to 21 September 2012 Mr Khoury opposed Telstra's application to register the word YELLOW as a trade mark, doing so in an individual capacity; (b) the Yellowbook Parties had difficulty in meeting an earlier costs order by Collier J on 6 May 2011; (c) just 18 days prior to trial Mr Khoury filed an affidavit attaching correspondence to IP Australia, and advising that he had assigned his rights and interest in the YELLOW Appeal to Yellowbook ("the Assignment"); (d) Telstra immediately expressed its concern to both Yellowbook and Mr Khoury that the Assignment was merely a device to allow Mr Khoury to extract himself from the proceeding, leaving Yellowbook as the only applicant when it was a small company with unknown assets. Telstra was in the position that it did not know whether Mr Khoury intended to, or was able to, continue as a party in the YELLOW Appeal. If Mr Khoury no longer intended to remain a party, or had no standing to do so, then the question of costs against him, and security for costs by Yellowbook arose; (e) unfortunately Mr Khoury failed or refused to explain to Telstra whether he intended to continue to be a party in the YELLOW Appeal, and what standing he had to do so; (f) on 8 October 2012 the parties filed submissions on the question of the standing of the applicants, and the matter was listed for urgent directions on 9 October 2012; (g) notwithstanding that just over one week remained until trial, on 9 October 2012 Mr Khoury did not inform the Court whether he intended to remain as a party. It appeared that Mr Khoury was unsure as to whether, upon the Assignment taking effect, he continued to have some residual interest in the YELLOW Appeal. However it was flagged that it was likely that he would later apply to be removed as a party; (h) on 11 October 2012 Mr Khoury filed submissions on the question of his standing in which he did not seek to be removed as a party, but accepted that he could not resist an order to that effect; (i) on the first day of trial, 15 October 2012, Mr Khoury conceded that he would remain a party and would be responsible for any adverse costs orders. [7] I am satisfied that the costs of and relating to the Assignment by Mr Khoury to Yellowbook of his rights and interest in the opposition to the YELLOW Trade Mark, including the appearances before the Court, the submissions and affidavits, were unnecessarily incurred. All of this work could have been avoided if Mr Khoury had assigned his interest in the appeal to Yellowbook in a timely way, or responded to Telstra's enquiries as to whether he intended, or was able, to continue as a party in the proceeding in a timely way. Telstra would then have been a position to decide whether it was appropriate to make an application for security for costs from Yellowbook. Leaving aside any question of whether Mr Khoury's actions were a litigation tactic, if he had acted in a timely way Telstra's urgent application would not have been necessary. [8] I have ordered that Telstra is not required to pay the Yellowbook Parties' costs relating to this issue, and that it is entitled to its party-party costs. 251 Rule 40.06 of the Federal Court Rules 2011 (Cth) provides that: A party may apply to the Court for an order: (a) that any costs that have been improperly, unreasonably or negligently incurred be disallowed; or (b) directing an inquiry whether any costs have been improperly, unreasonably or negligently incurred and providing for the costs of such inquiry. 252 Rule 40.06 is the foundation of order 5. The foundation for order 6, however, is the general power in s 43 of the Federal Court of Australia Act 1976 (Cth) to order costs, such costs being "in the discretion of the Court" under s 43(2).

The proposed grounds of appeal 253 Yellowbook and Mr Khoury seek leave to appeal against the costs orders on the following grounds: 24. The primary judge erred in regarding Mr Khoury's invoking of s.53 of the Trade Marks Act as improperly made or made at too late a stage of the proceedings; 25. The primary judge erred in proceeding on the basis that prior to 21 September 2012 Mr Khoury opposed Telstra's application to register the word YELLOW as a trade mark "in an individual capacity", contrary to Mr Khoury's sworn evidence; 26. The primary judge erred in failing to take account of the fact that Mr Khoury's action was precipitated by Telstra's solicitors' surprise refusal to communicate with the First Cross-Appellant's solicitor in relation to the YELLOW Opposition on the alleged grounds that he did not act for Mr Khoury, notwithstanding that no such point had been taken at any earlier stage of the proceedings. 27. The primary judge erred in adopting without evidence Telstra's assertion that Mr Khoury's action was a "litigation tactic" instead of accepting that Telstra's solicitors' peremptory cessation of communications with YCA's solicitor on the subject of the YELLOW Opposition precipitated the action. 254 It is well established that as the making of an order for costs involves the exercise of a discretion such an order is not open to appellate review unless the discretion miscarried in the relevant sense explained in House v The King (1936) 55 CLR 499 at 504-505 as follows: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution, for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. 255 Proposed grounds 24 and 25 concern how the primary judge viewed the evidence. As such, they do not fit readily within the principles which permit appellate intervention in respect of an order based on the exercise of discretion. In particular, it was reasonably open to the primary judge to consider that Mr Khoury had failed to act in a timely manner and, in so failing, had put Telstra to unnecessary costs. There was ample evidence to support this conclusion. No error of principle is apparent in this regard. Proposed ground 24 therefore cannot succeed. Proposed ground 25 is also without prospects of success. Mr Khoury's affidavit that he became the applicant because he misunderstood the application form is beside the point. The point is that at all relevant times until Mr Khoury purported to assign his rights to Yellowbook, Mr Khoury was the opponent. Telstra incurred costs in dealing with that opposition by Mr Khoury. Telstra was entitled to be concerned about the purported assignment to Yellowbook in terms of its own costs position. It incurred additional costs in taking steps to protect that position, none of which would have been necessary if Mr Khoury had responded to Telstra's concerns in a timely manner. Proposed ground 25, accordingly, also lacks merit. 256 Proposed ground 26 is also without substance. Telstra was well within its rights to insist that it deal with Mr Khoury's solicitor. Assuming Mr Khoury's actions were precipitated by Telstra's position, which came as a surprise to Mr Khoury, the primary judge nevertheless was entitled to characterise Mr Khoury's actions thereafter as having caused him and Telstra to unreasonably incur costs, providing a sound basis for the making of both orders 5 and 6. Mr Khoury's explanation for the purported assignment was immaterial. Having acted to assign the rights, Mr Khoury then failed to deal in a timely manner with Telstra's concerns. It was that failure which caused costs to be unreasonably incurred and that failure which founded the disallowance of Mr Khoury's costs and the order that Telstra's costs in that regard be paid. 257 Proposed ground 27 should be rejected. The primary judge did not adopt without evidence the proposition that Mr Khoury had acted as a "litigation tactic". He said that his conclusion was reached "[l]eaving aside any question of whether Mr Khoury's actions were a litigation tactic". 258 The arguments in respect of costs lack substance. Given the nature of the decision, being discretionary in character, leave to appeal in respect of proposed grounds 24 to 27 should be refused. I certify that the preceding two hundred and fifty-eight (258) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Besanko, Jagot and Edelman.