Useful decision on how courts might construe goods descriptions issued

Australia
In Hills Industries Limited v Bitek Pty Ltd ([2011] FCA 94, February 15 2011), the Federal Court of Australia has considered three concurrent proceedings, namely:
  • an appeal by Hills Industries Limited from a decision of the registrar allowing the registration of Bitek Pty Limited's DIGITEK trademark for "TV installation accessories including external TV antennas, none of the foregoing being set top boxes" (the opposition proceedings);
  • an action by Bitek seeking removal of Hills’ registration for the series of marks DGTEC, DGTEK and DGTECH covering "digital and electronic products including televisions, video players, DVD players, CD players, decoders and cameras" (the non-use proceedings); and
  • an action against Bitek for infringement of Hills’ DGTEC (series) registration (the infringement proceedings).
In relation to the opposition proceedings, the court had firstly to assess whether the series DGTEC, DGTEK and DGTECH or any of them were deceptively similar to DIGITEK and considered:
  • similarity in sound;
  • similarity in appearance; and
  • similarity in meaning.
After considering those issues, the court concluded that the marks were deceptively similar.
 
The court then needed to determine whether Bitek's and Hills’ goods were "similar goods" and considered: 
  • the nature of the goods;
  • their uses; and
  • the trade channels through which they are bought and sold.
To make an assessment, the court had to attribute a meaning to the description "TV installation accessories". After hearing the evidence, it preferred the view that TV installation accessories are items which can capture and convey a signal to an electronic product including antenna, satellite dish, mounting hardware, cabling, connections and amplifiers. 

When considering similarities between those goods and Hills’ goods, it accepted that the goods were interdependent in that they could be used together. However, it did not think that to be a decisive factor in determining their similarity, and noted that, while they operated together, they were not interchangeable, alternatives or substitutes.

With respect to the trade channels, it found that Hills’ goods were marketed at the retail level and by direct advertising to consumers, while Bitek's goods were mainly sold to professional installers at the wholesale level. While there may be some retail sale of Bitek’s goods, this was not the principal trade channel for such goods. The court placed substantial weight on the fact that Hills’ goods and Bitek’s goods were not interchangeable and did not compete in the same market, and so concluded that they were not similar. Consequently, Hill’s appeal against the opposition decision under Section 44 of the Trademarks Act was dismissed. 

The court also considered whether post-filing use can be taken into account in assessing an entitlement to registration under Section 44(3)(a) on the basis of honest and concurrent use, and concluded that evidence of concurrent use after the priority date was not relevant to that claim. Therefore, Bitek had no basis for such a claim (although it was not necessary to decide this in light of the court's finding on the issue of the similarity of the goods).

The court commented on whether the provisions of Section 44(3)(b) relating to an entitlement to registration on the basis of "other circumstances" required those circumstances to exist at the filing date. It expressed some uncertainty but was of the view that they did, and found that there were no relevant circumstances in this case. Given the finding on the similarity of the goods, it was unnecessary to decide this issue.

In relation to the opposition based on prior reputation (Section 60), despite sales of set top boxes in excess of A$20 million worth, the court did not consider proof of sales and advertising sufficient to establish reputation of the kind required under Section 60. The court expressed the view that, while such evidence may tend to prove that the goods sold under the mark are very marketable, it does not prove reputation. 

It also commented that, had it found relevant reputation, the evidence would still have failed to establish a likelihood of confusion as required to be successful under Section 60. On the issue of a concurrent use defence to Section 60, the court expressed the view that the provisions contained in Section 44(3)(a) are not relevant to a consideration of issues under Section 60. Consequently, the appeal against the registrar's decision in the opposition was refused.

In the non-use proceedings, the court decided that use of one of a series of registered marks is sufficient to maintain a registration for the series. In assessing what range was covered by Hills’ goods, it needed to determine products covered by the description "digital and electronic products" and expressed the view that the word "and" was to be read conjunctively (ie, the description covers goods that are both digital and electronic, rather than covering all electronic and all digital products). The judge stated that:

"if they were to be read disjunctively, the class of goods to which they refer would be extremely wide. I think also the fact that the words are followed by the words 'includes' and then a description of goods means also that the word 'and' is conjunctive."

In relation to the effect of the word 'includes', the court said that, while it was not necessary to consider the full range of goods being described by the general reference "digital and electronic products", they “will be goods of a like kind to the digital and electronic goods defined after the word 'includes'".

Considering the evidence, the court found that Hills’ mark had been used in relation to set top boxes, remote controls, digital video recorders with hard drive, televisions, CD and MP3 players, DVD players, micro sound systems, iPod docking speakers and web-based cameras.

When considering the issue of whether use on some goods covered by the registration entirely defeated a removal proceeding seeking removal for all goods, it found that the registrar and the courts are entitled to remove the trademark in respect of some goods, even if the removal application relates to all goods. 

While not finding any basis for exercising its discretion to leave the mark on the register for a broader range of goods than the used goods, it considered an appropriate remaining description to be: "Digital and electronic products including set top boxes, remote controls, digital video recorders with hard drive, televisions, CD and MP3 players, DVD players, micro sound systems, iPod docking speakers and web-based cameras".

Presumably, the decision to leave the general description "digital and electronic products" was informed by its interpretation of the effect of the word 'including' and its impact upon the preceding descriptions.

In the infringement proceedings, the court's findings that Bitek's goods are not similar to Hills’ goods, and that Hills had not established relevant reputation, essentially concluded the infringement issues. They resulted in a finding that, with the exception of earlier use that had taken place in relation to set top boxes and remote controls, there was no infringement of Hills’ registration.

Descriptions of goods and services can be ambiguous in their meaning, and the decision issued in this case is informative as to how the courts might construe such descriptions. 

Sean McManis, Shelston IP, Sydney

Get unlimited access to all WTR content