The Pops Group Pty Ltd as trustee for The Pool Shops Trust v Pro Pool Services Pty Ltd

The nature of the application 1 This is an application for summary judgment pursuant to r 26.01 of the Federal Court Rules 2011 (Cth) (the Rules). That rule makes provision for one party to obtain judgment against another for a variety of reasons. It provides as follows: 26.01 Summary judgment (1) A party may apply to the Court for an order that judgment be given against another party because: (a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or (b) the proceeding is frivolous or vexatious; or (c) no reasonable cause of action is disclosed; or (d) the proceeding is an abuse of the process of the Court; or (e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding. (2) The application must be accompanied by an affidavit stating: (a) the grounds of the application; and (b) the facts and circumstances relied on to support those grounds. … Note: See also section 31A of the Act. 2 Here, the applicant ("Pool Pro") relies upon r 26.01(1)(e) of the Rules, being that the respondent ("Pro Pool Services") has no reasonable prospect of successfully defending the proceedings or part of the proceedings.

Nature of the proceedings 3 In brief, the action concerns the alleged infringement, by the respondent, of certain trademarks registered in the applicant's name. On the present application, the applicant seeks declarations of infringement under s 120 of the Trade Marks Act 1995 (Cth) (Trade Marks Act) and orders restraining the first respondent from any further infringement. The other relief claimed in the amended originating application of 8 November 2024, being damages under s 236 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) or pursuant to s 126 of the Trade Marks Act, or for the tort of passing off, were not pursued on this application. 4 It is important to note from the outset that this is not a case where the respondent is alleged to have used an identical mark to that of the applicant as the registered trademark owner. Instead, it is a case where it is said that the respondent has used a sign that is substantially identical with, or deceptively similar to, trademarks of which the applicant is the registered proprietor. Naturally, any conclusion of infringement will therefore require an evaluation of the respective characteristics of the applicant's registered marks, and the logos or marks that are used by the respondent. In this respect, it is relevant to the present application that the respondent puts in issue the question of whether his logos or marks are similar or substantially identical to the applicant's registered marks. The resolution of that assertion involves a reconciliation of diverging submissions about the marks and, as was readily conceded on the application, the application of substantial case law relating to the operation of several sections of the Trade Marks Act. Needless to say, none of that readily bespeaks of a matter suitable for resolution by summary judgment: QS Holdings SARL v Paul's Retail Pty Ltd (2011) 92 IPR 460, 465 [16], citing Spencer v Commonwealth of Australia (2010) 241 CLR 118, 132 [25]. 5 The applicant relies upon three registered trademarks, which are as follows: (a) trademark 784050, which consists of the words "POOL PRO", for goods and services registered in classes 1, 3, 5, 7, 9, 11, 25 and 37 (being those classes defined in Schedule 1 of the Trade Marks Regulations 1995 (Cth)); (b) trademark 785737, which consists of the words "POOL PRO", for services registered in class 35; and (c) trademark 1425503, which consists of the words "POOL PRO" and an image (below), for goods and services registered in classes 5, 6, 7, 8, 11, 19, 20, 21, 28 and 37: 6 The respondent trades under the business name of "Pro Pool Services". It is a small Victorian business carrying on the business of providing swimming pool services, largely in the nature of pool maintenance, but including the provision of chemicals, equipment maintenance and the like. 7 The action was commenced on 10 June 2024, though the applicant has since been required to make a number of amendments. The proceedings have been hampered by the respondent, which does not appear by lawyers but instead by its director, Mr Sharp. Though Mr Sharp is not legally qualified, and that is certainly not a criticism, he has appeared on behalf of the respondent with the leave of the Court. 8 A difficulty here is that Mr Sharp is unfamiliar with the usual practices and procedures of a court. Again, whilst that is not a criticism, it is unfortunate that, from time to time, he fails to appreciate the nature of the steps that he is required to take. He appears not to devote sufficient attention to the proceedings and, as a consequence, it is probable that he does not recognise its importance.

The matter is not appropriate for summary judgement

Some basic propositions 9 It is well accepted that a Court will grant summary judgment if the procedural requirements of r 26.01 of the Rules have been met and, in essence, there is no issue of fact involved and the points of law raised are clear and unarguable: see, eg, Dey v Victorian Railway Commissioners (1949) 78 CLR 62, 90 - 91; Webster v Lampard (1993) 177 CLR 598, 611 - 612. The summary judgment procedure is an exception to the ordinary course of hearings, that is to say it happens in lieu of a formal trial, and, understandably, the general rule is that the Court should be slow to give summary judgment unless they are confronted with a very obvious case and no apparent defence: see Hammond v JP Morgan Trust Australia Pty Ltd [2011] NSWCA 57, [24]; Jones v Stone [1894] AC 22, 124; Westpac Banking Corporation v Corry [2011] NSWSC 1014, [14]. 10 These principles were referred to in detail in ThoughtWare Australia Pty Limited v IonMy Pty Ltd [2023] FCA 906 at [48] - [52] and there is no need to repeat them here. In that case, reference was also made (at [53] - [54]) to the Court's discretion to determine an application for summary judgment in circumstances that involved some complexity of fact or law: 53 Nevertheless, it must be added that, merely because there may exist some complexity in the underlying issues, courts should not shy away from granting summary judgment when, after a consideration of the facts and law, the outcome of the disputation is clear. If it is apparent that the result will not be altered by the holding of a trial, it is antithetical to the proper administration of justice to require the parties to be put to the effort and expense of conducting a full hearing: Theseus Exploration NL v Foyster (1972) 126 CLR 507; see also Federal Court Act ss 37M and 37N. In this respect the observations of White JA (with whom Margaret Wilson AJA and Martin J agreed) in Thomas v Balanced Securities Ltd [2012] 2 Qd R 482 at 502 [68]-[70] are relevant, albeit that they concerned the cognate rules applicable in the Queensland Supreme Court: 68 His Honour could have declined to grant summary judgment in light of the complexity of the issues to be determined but having embarked upon a consideration of the very full written arguments advanced by counsel and, being pressed by the parties' representatives to do so, it was open to him to proceed to dispose of the claim and in a summary way. In Australian Can Co Pty Ltd v Levin & Co Pty Ltd (as quoted by Stephen J in Theseus Exploration) the Court said: "… We think this Court being clear as to the meaning of the contract is not so helpless that it cannot prevent the absurdity of remitting the case to a single judge for trial because before full argument there might have been some uncertainty as to the meaning of the document." Similarly, a judge hearing a summary judgment application may be prepared to tackle a legally difficult analysis without being in error in doing so. 69 The approach to r 292 and its corollary for a defendant, r 293, is as enunciated in Deputy Cmr of Taxation v Salcedo and confirmed and elaborated in Coldham-Fussell v Cmr of Taxation. In the latter decision it was noted that rr 292 and 293 must be applied in the context of the overriding purpose of the UCPR to "facilitate the just and expeditious resolution" of the matter in dispute. 70 While the primary judge could have declined to embark on the applications, no error has been demonstrated in him having done so. (Footnotes omitted). 54 Justice Flick was of a similar view in SK Foods LP v SK Foods Australia Pty Ltd (in liq) (No 3) (2013) 214 FCR 543, where his Honour held at 579-580 [115]: 115 An application for summary judgment may be entertained even if the questions raised for resolution involve some complexity: cf Civil & Civic Pty Ltd v Pioneer Concrete (NT) Pty Ltd (1991) 1 NTLR 43 at 52 -53 per Asche CJ. The fact that a case may present complexity - either by reason of the law to be applied or the facts to be found - does not preclude an application being made for summary judgment. But caution must be exercised before entering summary judgment: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 . Dixon J there observed: The application is really made to the inherent jurisdiction of the court to stop the abuse of its process when it is employed for groundless claims. The principles upon which that jurisdiction is exercisable are well settled. A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process. This passage has since been endorsed by (for example) Hayne J in Re Green (2011) 85 ALJR 423 at [6]. See also: General Steel Industries Inc v Cmr for Railways (NSW) at 128 -129 per Barwick CJ; Silverton Ltd v Harvey [1975] 1 NSWLR 659 at 665 per Rath J.

The merits of this case are not obvious 11 The present application was made against the background of the respondent, via its director, ostensibly paying insufficient attention to the carriage of the proceedings. This is likely to have given the applicant some false hope that its application would not be defended, and no issue would be raised by Mr Sharp. However, that was not to be. 12 Ultimately, when the matter came on for hearing, Mr Sharp appeared, with leave, to defend Pro Pool Services. Importantly, he filed an affidavit upon which he relied. Whilst the material contained within it was generally of poor quality, it does raise some relevant issues. In the first instance, he puts in issue whether Pro Pool Services' marks have infringed the registered marks of Pool Pro. Second, he put in issue whether Pro Pool Services has acted in good faith. In this latter respect, the evidence adduced falls short of what is required to establish that the defendant had so acted for the purposes of s 122(1)(a)(i) of the Trade Marks Act, though in the course of the hearing, Mr Sharp indicated that there may possibly be additional evidence which could be obtained to support that defence. That rather suggests that there exists some evidence which will become available were the matter to proceed to a full trial on all issues. In circumstances where the respondent is essentially unrepresented, careful consideration must be given to ascertaining whether, if the matter proceeded to trial, it would have no reasonable prospect of successfully defending the applicant's claims: see Garrett v Make Wine Pty Ltd (2014) 323 ALR 652, 675 [93]. 13 Ultimately, there are a number of issues which would need to be determined to establish the infringements on which the applicant relies. Whilst it is possible in some cases that relatively simple issues might be resolved in the course of a summary judgment hearing, here, there are factual issues to be determined as to whether or not the "cognitive clues" in both the registered mark and the mark being used by the respondent share a degree of similarity that falls afoul of s 120 of the Trade Marks Act. That involves a variety of conclusions to be reached across the three different marks and for the different goods and services for which they are registered. 14 At a broad and general level, the words "Pro Pool Services" appear to have some important distinguishing features from the words "Pool Pro" which, prima facie, may indicate that no contravention has occurred. That is not necessarily the case, but the obvious point is that there are issues to be determined of that nature. Dr Eliades, on behalf of the applicant, advanced a number of submissions that, on a proper and full consideration of the decision in Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379 (Pham), and its proper application, any descriptive differences between the marks - such as the word "services" - could be ignored for the purposes of determining infringement. Whilst that very well may be correct, reaching that conclusion would require numerous determinations based on a number of different evaluative considerations, some of which were identified in the course of submissions as being: (a) It is necessary to make a determination about what are the "essential elements" or "dominant cognitive clues" of the respective marks; (b) In that evaluation, it is necessary to distinguish those differences between the marks which are distinguishing features but not essential elements or dominant cognitive clues of the marks. As was said in Pham (at 392 [52]): 52 We do not accept IR's submission that ICI was positing a new and unprincipled test for determining substantial identity. The required exercise of side-by-side comparison is not carried out in a factual and legislative vacuum. The purpose of the exercise is to decide if two trade marks are substantially identical, where a trade mark is "a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person" (s 17). Given this context, it is unlikely that the essential elements of a mark or its dominant cognitive clues are to be found in mere descriptive elements, which are not apt to perform this distinguishing role in respect of the relevant goods or services. While this does not mean that differences, including descriptive differences, may be ignored, it does mean that the side-by-side comparison is to be carried out cognisant of the essential elements of the mark. (c) In the current case, it was appropriate to disregard the word "Services" in the Pro Pool Services mark because it was merely a generic descriptive word, but it was not appropriate to disregard the generic nature of each of the words "Pro" and "Pool"; (d) That because the words "Pool Pro", in that order, are not to be regarded as generic words because they passed the "examiner's test" and registration of the mark was allowed, the generic nature of the terms "Pro" and "Pool" used in that sequence is also not to be considered a use of generic words; (e) That the differentiation between essential elements and mere differences was vital to the determination of infringement and requires careful consideration; and (f) That there is no evidence that the use of a water droplet is a common feature of marks used in the pool service industry, such that its use in the present case might constitute a dominant cognitive clue and, even if that were not the case, a cross-claim challenging the registration of the mark would be required to raise the issue. 15 The foregoing are merely some of the issues which were raised in the course of the applicant's submissions as to the evaluative analysis required to reach a determination that an infringement has occurred. 16 It follows that, on this application for summary judgment, there is no clear identifiable pathway to granting judgment for the applicant. The matter is not of insignificant complexity; it requires substantially more time, and substantially greater analysis, than is available in the context of a summary judgment application. There are many authorities to the effect that, when a matter of some complexity arises in a summary judgment application, the Court has a discretion whether to resolve the complexity and reach the answer, or to hear the matter after a full hearing. Some are referred to above: cf Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1, 260 - 261. Whilst a judge may take up the challenge of granting summary judgment despite the existence of a not uncomplicated legal determination, they are not obliged to do so. 17 In general, it is probably preferable that this not occur where, in order to reach the necessary conclusion, the matter would have to be adjourned for some weeks and the material and relevant authorities considered in detail so that detailed reasons can be prepared: see, eg, Deco Australia Pty Ltd v Aliwood Pty Ltd [2021] FCA 1159. 18 Here, the conclusions that the applicant asks the Court to make are far from self-evident; the detail contained in both their written and oral submissions is a testament to that observation. In this context, I am satisfied that this is not a case that warrants the grant of summary judgment. The circumstances are such that it has not been shown that the respondent has no reasonable prospect of successfully defending the proceeding or part of it. 19 It became clear in the course of the hearing that there may exist other evidence available to the respondent, which it might seek to adduce in relation to the nature of the pool services industry and, particularly, the occasions on which the words "Pool" or "Pro" or any other words are commonly used in business names. The extent to which that will be relevant or determinative is a matter yet to be decided. Mr Sharp also mentioned the possible existence of evidence relating to what steps the respondent took to satisfy itself that there were, in fact, no marks registered which its name might infringe. He should be afforded the opportunity to secure that evidence. 20 In all of these circumstances, the application cannot succeed and should be dismissed. 21 The appropriate orders are: (a) The applicant's application filed on 6 December 2024 be dismissed. (b) The applicant's costs of the application filed on 6 December 2024 be reserved. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.