The a2 Milk Company Limited v LD&D Australia Pty Ltd

1. The appeals from the decisions of the delegates of the Registrar of Trade Marks given on 22 July 2019 in respect of trade mark application no 1708342 and on 3 June 2019 in respect of trade mark application no 1751238 be allowed.
2. The decisions be set aside.
3. The trade mark applications the subject of the appeals proceed to registration.
4. No orders be made as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BROMWICH J: 1 The milk that cows produce contains a number of different proteins, amounting to some 3.3% by weight of the milk. These proceedings concern a subset of those proteins that amount to less than 1% of cows' milk by weight. In particular: (a) most of the proteins in cows' milk are known as caseins, divided in to several families known as alpha-, beta- and kappa-caseins, amongst others; (b) bovine beta-caseins comprise less than 1% of cows' milk by weight; (c) there are at least 12 known variants of bovine beta-casein; (d) as relevant to these applications and appeals, in the scientific literature one such bovine beta-casein variant is known as A1, and another such variant is known as A2, which can also be rendered as A1 and A2; (e) a naming convention of using just A1 or A1, is not scientifically unique to bovine beta-casein, such that scientists would not use a naming convention such as "A1" or "A1 protein" on its own; there are also A variants of kappa-casein. 2 A2 protein is apparently the original beta-casein protein in cows' milk, but additional proteins have emerged over time as a result of genetic mutation. The applicant's milk and milk products contain A2 proteins, in common with nearly all other cows' milk. What distinguishes the applicant's milk and milk products is that they do not contain A1 proteins. A1 proteins are said to produce digestive problems for some consumers, and milk without A1 proteins are accordingly preferred by some consumers. Thus, curiously, the use of A2 is intended to highlight or signify the absence of A1 protein, the presence of A2 protein not being a distinguishing feature. There is a significant marketing advantage in the applicant having a trade mark monopoly in the use of A2 as a brand name. 3 The applicant has no objection on trade mark grounds to the use of "A2" by third parties, where it is used descriptively to refer to that protein. However, the applicant objects to the use of "A2" or "a2" as a brand, or part of a brand, for other milk and milk products of other producers. It is protection against that use which was sought to be achieved by the two trade mark applications which are the subject of these two related proceedings. 4 The applicant brings two appeals under s 56 of the Trade Marks Act 1995 (Cth) from decisions of two separate delegates of the Registrar of Trade Marks. The delegates had upheld the respondent's opposition to separate trade mark applications for the words "a2 Milk" and "TRUE A2" under s 41 of the Trade Marks Act. 5 The appeals have resolved inter partes. The respondent, a trade competitor of the applicant in relation to milk and milk products, no longer wishes to take any part in either proceeding and has consented to orders being made allowing the two appeals, setting aside the delegates' decisions, ordering that each trade mark application proceed to registration, and making no order as to costs. A similar situation occurred in Société des Produits Nestlé SA v Aldi Stores (A Limited Partnership) [2010] FCA 218 per Nicholas J (Nestlé v Aldi), which did not proceed to a hearing, and in Mars Australia Pty Ltd v Société des Produits Nestlé SA [2010] FCA 639; 86 IPR 581 per Bennett J (Mars v Nestlé), which resolved during the course of a contested trial after numerous hearing days. 6 In both Nestlé v Aldi and Mars v Nestlé, the Registrar provided a letter indicating no opposition to the decision of the delegate being set aside, which would lead to registration due to there being no continuing opposition to that taking place. That letter was given to the trial judge in each case, and was given a degree of weight in making orders that each application proceed to registration. The applicant sought a similar letter in this case, expressly relying upon what had happened in Nestlé v Aldi and Mars v Nestlé. However in this case, a Deputy Registrar concluded that the Registrar was "unable to issue a letter indicating that she has no objection to the decisions of her Delegates being set aside", having: (a) referred to the Registrar's position arising from each delegate's decision that registration be refused under s 41 on the basis of evidence and submissions then before the Registrar; (b) taken into account the public interest in dealing with each application expeditiously rather than pursuing them through this Court; (c) noted that the ground of opposition was an absolute public interest ground, not able to be answered by an agreement between two traders (that is, the present parties), in contrast to a relative ground of opposition such as under s 44 where the agreement of the parties would be given greater weight; and (d) referred to the applicant's reference to more extensive evidence before this Court than was before the delegate "relating to the threshold question of distinctiveness (not whether the trade mark is adapted to distinguish)", observing that the appeals had not been heard and none of the evidence had been read, and noting that although that evidence had not been read, it appeared to differ from that before each delegate, and concluded that whether that "alters the outcome on the initial question of whether a trade mark is capable of distinguishing the designated goods is now a matter for the court". 7 Through an email from my associate, I indicated to the applicant (copied to the respondent) that, while I was willing to make orders by consent allowing each appeal, setting aside each of the delegates' decisions, and making no order as to costs, I was not willing to make a consent order that each trade mark application proceed to registration in light of the public interest concerns expressed by the Deputy Registrar. In reply, the applicant raised a concern that it was not clear that this Court would have power to remit the extant applications for registration for further determination, but even if there was such a power, expressed concern that the Registrar might be considered functus officio in relation to each application. That latter concern was recast at the hearing to refer to the role of the Registrar being exhausted in relation to s 41 in the absence of an opponent, leaving nothing for a delegate to determine. Either way, the applicant remained concerned at the uncertainty attendant upon orders for registration not being made. 8 Upon reflection, I can see that the Deputy Registrar's letter left the applicant with some legitimate uncertainty as to what would happen if the delegates' decisions were set aside, and if no orders as to the applications proceeding to registration were made. That letter perhaps indicated a view that the now abandoned opposition to registration under s 41 might still somehow have some work to do on public interest grounds, or at least in some other way impede the progress towards registration. The possible reasoning and the likely outcome were not clear. 9 Noting the concerns raised by the Deputy Registrar about the s 41 grounds and the question of public interest, the applicant asked whether the Court would be willing to consider the evidence that had been filed, receive written submissions and hear any necessary oral submissions, albeit without opposition from the respondent. The respondent did not object to this course but again did not wish to participate. 10 Having regard to the de novo nature of each appeal proceeding I decided to accede to the applicant's request in the interests of certainty and finality. I therefore received from the applicant a comprehensive court book of just under 5,000 pages containing the relevant decisions and detailed affidavit evidence, together with concise but detailed submissions referring to key aspects of that evidence and relevant authority. A hearing took place with the applicant represented by senior and junior counsel. 11 Section 41 of the Trade Marks Act at the time of the filing of the trade mark applications (and unchanged at the time of the hearing) provides as follows: 41 Trade mark not distinguishing applicant's goods or services (1) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (the designated goods or services) from the goods or services of other persons. Note: For goods of a person and services of a person see section 6. (2) A trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons only if either subsection (3) or (4) applies to the trade mark. (3) This subsection applies to a trade mark if: (a) the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and (b) the applicant has not used the trade mark before the filing date in respect of the application to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant. (4) This subsection applies to a trade mark if: (a) the trade mark is, to some extent, but not sufficiently, inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and (b) the trade mark does not and will not distinguish the designated goods or services as being those of the applicant having regard to the combined effect of the following: (i) the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of other persons; (ii) the use, or intended use, of the trade mark by the applicant; (iii) any other circumstances. Note 1: Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate: (a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or (b) the time of production of goods or of the rendering of services. Note 2: For goods of a person and services of a person see section 6. Note 3: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (5) and 7(3) and section 8). (5) For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant. Note 1: For applicant and predecessor in title see section 6. Note 2: If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8). 12 The applicant's cascading arguments based upon s 41 are: (a) primarily, each trade mark is sufficiently inherently adapted to distinguish the designated goods from the goods of other persons - that is, that neither s 41(3) nor s 41(4) being engaged, the Court need inquire no further, and should therefore order that the applications proceed to registration; (b) alternatively, each trade mark is to some extent inherently adapted to distinguish the designated goods from the goods of other persons (so as to exclude the operation of s 41(3)), and each trade mark will also distinguish the designated goods as being those of the applicant having regard to the combined effect of: (i) the extent to which each trade mark is inherently adapted to distinguish the goods from the goods of other persons; (ii) the use, or intended use, of each trade mark by the applicant; and (iii) other circumstances, so as to also exclude the operation of s 41(4), such that the Court should order that the applications proceed to registration; (c) further and in the alternative, the applicant has used each trade mark before the filing date (20 July 2015 for "a2 Milk" and 9 February 2016 for "TRUE A2") to such an extent that each trade mark did in fact distinguish the designated goods as being those of the applicant as at the application/priority date, such that the Court should order that the applications proceed to registration. As it transpired, the last point at (c) above does not need to be addressed. 13 I consider it appropriate to make a number of preliminary observations. 14 First, the applicant submits that the approach taken in Nestlé v Aldi and in Mars v Nestlé will suffice in each of the present closely related cases, which are more like the latter scenario. The applicant submits that little more is needed than the brief application of relevant principles to the facts and the evidence. The problem I have with accepting that approach, if taken too literally, is primarily that each of those cases were quite different from the present. 15 In the case of Nestlé v Aldi, the dispute concerned a trade mark application for the shape of goods (confectionary known as KitKat) which resolved before trial. Nicholas J considered the lack of opposition by the Registrar to be of some importance, and also found that it was in no sense self-evident that the mark should not be registered. 16 In the case of Mars v Nestlé, the dispute concerned registration of a particular shade of purple in relation to cat food packaging. The appeal from the Registrar's upholding of an objection pursuant to s 41 went to trial but resolved after a significant number of hearing days. Bennett J found that the evidence established that as of the priority date, the applicant's use of the mark had made the particular shade of purple capable of distinguishing its goods. Her Honour found that in the absence of opposition from the respondent or from the Registrar, there was no good reason to refuse to allow the trade mark to proceed to registration, citing Nestlé v Aldi in support of that approach. 17 In the present cases, there are extant and apparently maintained findings by delegates that the grounds of objection under s 41 have been established. There also remains a question of public interest to be resolved. Accordingly, in my view, the approach taken in both Nestlé v Aldi and Mars v Nestlé cannot safely dictate the approach to be taken here, at least insofar as the Court is called upon to make an order in the case of each application that would lead to registration of the two trade marks. In those circumstances there was no real practical alternative but to determine whether there was any s 41 impediment to registration, in light of the further evidence adduced, before making the additional order sought. 18 Secondly, the applicant submits that because of the substantial additional evidence before the Court that was not available to the Registrar, the weight to be given to each delegate's decision is "necessarily quite limited". Having read the reasons of each delegate, I am not satisfied that is so, not least because numerous points made by the delegates continue to have relevance and are not necessarily to be discarded by reason of the additional evidence adduced. Each are reasoned decisions, to which I propose to give the usual degree of weight as opinions of skilled and experienced persons, without necessarily agreeing with them or any of the conclusions reached: see the Full Court decision in Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; 93 FCR 365 at [33] per French J (with whom Tamberlin J agreed, Branson J dissenting). As French J observed, weight can be given to the Registrar's opinion without compromising the Court's duty to construe the relevant legal criteria. 19 The factual judgment of the delegate can properly be treated as a factor relevant to the Court's own evaluation of the material before it, still falling well short of applying any kind of doctrine of deference by the judiciary to executive expertise, sometimes called the Chevron doctrine after Chevron USA Inc v National Resources Defense Council Inc, 467 US 837 (1984). As Derrington J observed in Tohi v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 125 at [36], that doctrine has no application in Australia, citing Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; 199 CLR 135. However as Gleeson CJ, Gummow, Kirby and Hayne JJ observed in Enfield at [45], Registrar of Trade Marks v Muller (1980) 144 CLR 37 at 41 is authority for the proposition that (omitting footnotes) in a proceeding in the original jurisdiction of a court on "appeal" from that tribunal, the "court should attach great weight to the opinion of the [tribunal]". That observation was made when dealing with an appeal from a refusal of registration by the Registrar of Trade Marks where the issue was whether a proposed trade mark was distinctive and ought to have been registered.