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To succeed on appeal, Gallo needed to overturn findings of the trial Judge both in relation to Lion Nathan’s application for removal of its trade mark for non-use and in relation to its own infringement claim. While the Full Court decision allowed Gallo’s appeal in relation to the infringement issues, the trial Judge’s findings on the removal application were upheld.Non-Use

At trial, it was held that while there had been sales, albeit limited, of BAREFOOT wine in Australia in the relevant non-use period, these sales occurred without the knowledge of the trade mark owner and as such were not use of the trade mark by the owner. On appeal, Gallo argued that the test of use was an objective one, such that the trade mark owner’s awareness of use of the trade mark in Australia was irrelevant. The Full Court, relying the decisions of Windeyer J and the Full Court of the High Court in the Estex cases, upheld the decision at first instance, confirming that in order to satisfy the requirement that there be use in the course of trade by the owner of a trade mark there must be:

a) conduct by the owner of the mark which the owner might reasonably contemplate would result in dealings with its goods marked with its trade mark in Australia while the goods were in the course of trade; and

b) actual display, sale or offering for sale of those goods in Australia.

The Full Court also confirmed that an order that the trade mark be removed from the register did not operate retrospectively, such that even where a trade mark is so removed, there might be infringement of that mark up until the date of the order for removal.

Infringement

The trial Judge considered a range of factors on the issue of whether the goods in respect of which Gallo’s trade mark was registered, wine, and the goods on which Lion Nathan was using its mark, beer, were goods of the same description and concluded that they were not.

The Full Court noted that while “s 120(2) requires a number of discrete questions to be asked and answered”:

these discrete questions arise in the context of determining, as the ultimate question, whether there has been infringement of the registered trade mark and, to that end, the object or purpose of the statutory prohibition on infringement is relevant.  It is to protect the statutory monopoly the registered owner has to use the registered trade mark as a badge of origin.  In the context of goods sold in the course of trade to the public, the question of whether the alleged infringement has arisen by the affixing of a deceptively similar trade mark is not divorced from the question of whether the alleged infringement has arisen by doing so in relation to goods of the same description.  One would have thought both questions necessarily require consideration of what members of the consuming public might perceive as a result of the use of the alleged infringing mark on the goods in question and whether they might be led to believe they were goods of the registered owner.

The Full Court found to be convincing the factors supporting the view that beer and wine were goods of the same description, such as both being alcoholic beverages distributed largely by the same major wholesale distributors and retailers and directed at the same type of consumer. By contrast, the considerations which led the trial Judge to the opposing conclusion were stated by the Full Court to be “of materially less significance”. Regarding the origin of the goods and in particular the difference in the manner of manufacturing wine and beer the Full Court stated that “it is unlikely that this difference would be significant to the consuming public”. In relation to another factor relied upon by the trial Judge being “the manner in which beer is consumed, that is drunk for its refreshing qualities, and not, like wine, consumed in a “sipping fashion”  the Full Court noted that “For our part, we doubt this is a relevant consideration”.

Conclusion

As a result of the findings of the Full Court, Lion Nathan infringed Gallo’s trade mark from the time it commenced selling its BAREFOOT beer up until the date of the order that the trade make be removed. The question of what if any pecuniary relief Gallo might be awarded in respect of this period of infringement remains to be determined.

The specification of the patent in suit included a statement that “It is an object of the invention to provide a bi-directional clutch which avoids the need for a plurality of helical springs and complex configuration of the second shaft.” In considering the impact of this statement on the construction of the claims of the patent, Greenwood J stated that:The object statement logically takes up two features identified by the author of the patent in suit in the author’s discussion of the prior art spring clutch of AP825. That discussion identifies the functionality of sequentially engaged multiple springs in effecting the transmission of torque loads and the need, dictated by the presence of a number of helical springs within the spring clutch, for complex openings and barriers in the engagement shaft engaging those multiple springs. The object statement suggests that the object of the invention is to avoid each of these features. … That object statement suggests that both advantages of the invention need to be present to achieve the object of the invention which suggests that the object statement contemplates a monopoly to be defined by the claims in terms of a bi-directional clutch that has the advantage of simply a single spring (rather than many) and a second advantage that complex openings and barriers in the configuration of the second shaft … engaging that single spring, are avoided.

Having found that it was a requirement of the invention that both stated advantages be achieved in order to satisfy the object of the invention, the Court rejected a broad construction of the claims put forward by the patentee which would have resulted in the claims covering embodiments which achieved only one of those advantages. This resulted in a finding of non-infringement.

The Court also noted that if the claims where accepted to have the broader construction put forward by the patentee, then in light of the object statement, the claims would have been bad for lack of utility for encompassing embodiments which failed to achieve both of the stated objectives.

The decision of Mansfield J in Corporation of the City of Adelaide v Adelaide City Fines Pty Ltd [2009] FCA 132 considered a series of six different parking tickets or notices issued by ACF over a period from 2003 to 2007, finding that each conveyed inter alia representations to the effect that the notices were issued or authorised by the Council and were issued for the recovery of a fine or other penalty imposed by law. Those representations were false, and hence misleading and deceptive, because ACF was not so authorised and any claim ACF may have had in relation to the alleged parking infringements was only for an alleged contractual debt.The original ACF notice bore a number of striking similarities to the official expiation notices issued by the Council for parking infringements and while the style of the subsequent ACF parking notices was modified over time in response to communications from the Council, they were nevertheless found to convey the same representations to the relevant public. As noted by Mansfield J:

where, as here …, ACF … initially set about presenting the first ACF Notice to closely resemble the first Expiation Notice, I consider the subsequent minor variations to the ACF Notices demonstrate a desire by ACF … as much as possible to retain the perception or representation that its notices were issued by or with the authority of or in association with the Council, and are for recovery of a fine or other penalty imposed by law, and that ACF was authorised by law to recover a fine or other penalty imposed by law

This clearly reinforces the proposition that while intention to mislead or deceive is not a necessary element of s 52, proof of such an intention has a very strong evidentiary value.

There was also significant evidence put forward by the Council, which showed that a number of recipients of the ACF notices had contacted the Council in relation to those notices or contacted ACF assuming them to be the Council. This evidence, found to go beyond mere confusion, was relied upon by the Court to hold that a significant class of reasonable recipients of the ACF notices would take from those notices the representations alleged by the Council.

At trial (Esco Corporation v PAC Mining Pty Ltd [2008] FCA 640), Tamberlin J found that PAC had infringed one of two patents owned by Esco in relation to wear assemblies for excavator buckets. His Honour also dismissed PAC’s revocation suit. PAC appealed the finding of infringement and also the finding that the claims were not obvious and therefore involved an inventive step.On the question of obviousness, it was accepted that an existing apparatus, referred to as Toplok was common general knowledge in Australia and that the inventive departure from Toplok consisted of the introduction of an adjustment assembly into the locking mechanism of that apparatus. Accordingly, the issue was whether it would have been obvious to the notional skilled person in the art that an improvement could be made to Toplok by the utilisation of the adjustment assembly claimed. Evidence on obviousness was provided by one of the inventors, McClanahan, on behalf of the Esco, and by an expert witness, Wightley, on behalf of PAC.

In relation to the evidence of McClanahan, the trial Judge, in reliance on a statement appearing Terrell, The Law of Patents (14th ed., 1994), noted that “when deciding whether there has been an inventive step the courts have attached considerable weight to the evidence of the inventor”. This statement was attacked on appeal by PAC. The Full Court referred to the High Court decision in Wellcome v VR Laboratories, stating that it was clear from that authority that:

there is no general proposition of law that, when questions of obviousness are in issue, considerable weight should be given to the evidence of the inventor

However the Full Court found that while the trial Judge was in error in according special weight to the evidence of McClanahan, this error did not materially effect the conclusion reached.

In relation to the evidence of Wightley, the trial Judge concluded that it was “reduced in weight by hindsight assumptions related to the nature of the problem, the need for a new design and the solution ultimately developed”. This conclusion was based on the fact that prior to expressing his opinions, Wightley was shown the Toplok technology and each of the patents in suit.  He was also asked to assume that, at the priority date, it was well-known that the Toplok apparatus had a problem in that the lock itself was prone to work loose.

The Full Court considered that the approach of the trial Judge in treating the evidence of Wightley with caution was both justified and desirable, in light of various High Court decisions, including Hassle v Alphapharm and Lockwood v Doric (No 2). In affirming the decision of the trial judge that the claims were not obvious, the Full Court concluded that:

the thrust of his Honour’s reasons was to reject the evidence of Prof Whiteley because his opinion had been inappropriately tainted, from the outset …  nothing put to us on appeal persuades us that his Honour was in error to have proceeded in this way.

The Courts have consistently warned against the dangers of hindsight analysis when assessing the question of obviousness. As such, it is imperative that evidence led to show that an invention is obvious is not tainted by hindsight and expert witness evidence must be prepared with care to ensure that it is not open to criticism of this kind.

LED, the owner of two registered designs in respect of “Rear combination lights”, alleged that the respondents had infringed those registrations by the sale of car tail lights embodying the designs. The respondents cross-claimed seeking revocation of the designs, on the basis that the representations of the design were unclear such that the monopoly granted lacked certainty, that the registered owner was not the sole person entitled to ownership of the designs and that the designs were not sufficiently new and distinctive.

Ownership

As part of the development of its commercial product, LED produced a series of hand drawn sketches of tail lights, which it provided to a manufacturer, who in turn used those sketched to produce CAD drawings for use in the production of the lights. Those CAD drawings were also used to produce the representations forming part of the design registrations. The respondents contended that in the circumstances, the manufacturer was either the sole person entitled to ownership of the designs or was jointly entitled along with LED. In rejecting this argument, Gordon J held that:

Authorship of a design is in the “person whose mind conceives the relevant shape, configuration, pattern or ornamentation applicable to the article in question and reduces it to visible form” … it is clear that Mr Ottobre [of LED] is the person who conceived the relevant shape, configuration and pattern of the Designs and reduced it to a visible form; “M” [the manufacturer] simply converted that design to an electronic form in order to facilitate the production process.

Her Honour also noted that even if the manufacturer was a co-author of the designs, as the design was produced for LED under contract, section 13(1)(b) of the Act would operate to give LED sole entitlement to the designs.

Clarity of Representations

The representations of the designs available from the electronic register of designs, which were also the representations attached to the certificates of registration, were faint and pink in colour. In addition to the pink drawings, a set of greyscale drawings which did not suffer from the same deficiencies, were held in the physical files relating to the designs as maintained by the Designs Office.

Ultimately, Gordon J found it unnecessary to decide whether the Register in respect of the designs was constituted by the electronically available representations, those available on file or some combination of the two. Her honour found that while not perfect, the pink drawings were sufficient for the designs to be reasonably clear and succinct, further noting that the electronic representations of the designs were capable of being magnified to an extent such that the designs appeared “not just with reasonable clarity, but with great clarity”.

Newness and Distinctiveness

Gordon J firstly rejected the submission of the respondents that the distinctiveness of a design is to be assessed by comparing it to the prior art base as a whole. Rather, the comparison to be made is between the design in question and any one design forming part of the prior art base. This assessment, involving consideration of whether the two designs are substantially similar in overall impression, is made from the perspective of the “informed user”, Her Honour stated that:

it is apparent that an informed user:

1. is reasonably informed; not an expert but more informed than an average consumer;
2. is an objective standard.  However, expert evidence may still be adduced in court to assist the Court in applying the informed user concept;
3. focuses on visual features and is not concerned with internal features or features that are not visible to the naked eye.

Gordon J concluded that none of the designs alleged to form part of the prior art base, when considered individually, included each of the visual features described in the statement of newness and distinctiveness accompanying the designs. Accordingly, the designs were sufficiently new and distinctive.

Infringement

Having found that the products sold by the respondents were an infringement of the registered designs, Gordon J then considered the defence to an award of damages or an account of profits raised under section 75(2), on the basis of innocent infringement. While her Honour accepted that it would be inappropriate to impose a per se duty to check whether products are the subject of a registered design, “there will be circumstances where a secondary infringer should reasonably be expected to check”. In this case, the products and the packaging of the products sold by LED, included markings indicating the existence of design registrations, providing prima facie evidence that the respondents were aware of the registrations pursuant to section 75(4). This clearly illustrates the significance of appropriate product marking.

Interestingly, the respondents do not appear to have raised the right of repair defence made available under section 72 of the Act. This provision was introduced into the Designs Act 2003 for the very purpose of allowing aftermarket sales of motor vehicle components.

Unjustified Threats

As her Honour held that the designs were both valid and infringed, any threat of infringement could not be said to be unjustified. Nevertheless, Gordon J considered the statements said to constitute such threats, including the statement made by LED that:

Since the lamps are similar in appearance to LED Technologies’ lamps, we are currently consulting our legal advisers regarding litigation against vendors of these lamps in order to protect our reputation and to protect consumers.

Perhaps surprisingly, her Honour stated that “(t)aken at its highest, it states that LED Tech was seeking legal advice.  It makes no threat of proceedings for design infringement”, but did note that in Occupational and Medical Innovations Limited v Retractable Technologies Inc (2007) 73 IPR 312 a similar letter was held to constitute a threat under s 128 of the Patent Act 1990 (Cth).