FEDERAL COURT OF AUSTRALIA PRACTICE & PROCEDURE - strike-out application - whether Court has the jurisdiction to determine a Trade Marks application - whether the statutory procedure is exclusive and the role of the Court limited to that of hearing appeals - whether there is a legal controversy capable of resolution by declaratory relief - whether an issue estoppel could arise if a declaration as to the registrability of a Trade Mark was made - whether the case in support of the declaration is manifestly hopeless. TRADE MARKS - whether Court has the jurisdiction to determine a Trade Marks application - whether the statutory procedure is exclusive and the role of the Court limited to that of hearing appeals - whether there is a legal controversy capable of resolution by declaratory relief - whether an issue estoppel could arise if a declaration as to the registrability of a Trade Mark was made - whether the case in support of the declaration is manifestly hopeless. Trade Marks Act 1995 Telstra Corporation Ltd v Australian Telecommunications Authority (1995) 133 ALR 417 , referred to Moorgate Tobacco Co Ltd v Philip Morris Ltd 30 May 1979 unreported, Helsham CJ in Eq, discussed Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, referred to Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, referred to Salmar Holdings Pty Ltd v Hornsby Shire Council [1971] 1 NSWLR 192, referred to Pharmaceutical Society of Great Britain v Dickson [1970] AC 403, referred to Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297, referred to Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514, referred to PHILIPS ELECTRONICS N.V. and PHILIPS ELECTRONICS AUSTRALIA LIMITED and REMINGTON PRODUCTS AUSTRALIA PTY LIMITED v REMINGTON PRODUCTS AUSTRALIA PTY LIMITED and PHILIPS ELECTRONICS N.V. and PHILIPS ELECTRONICS AUSTRALIA LIMITED ng 637 of 1997 lehane j 10 december 1997 sydney IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 637 of 1997 BETWEEN: PHILIPS ELECTRONICS N.V. First Applicant PHILIPS ELECTRONICS AUSTRALIA LIMITED Second Applicant REMINGTON PRODUCTS AUSTRALIA PTY LIMITED Respondent AND: REMINGTON PRODUCTS AUSTRALIA PTY LIMITED Cross-Claimant PHILIPS ELECTRONICS N.V. First Cross-Respondent PHILIPS ELECTRONICS AUSTRALIA LIMITED Second Cross-Respondent JUDGE: LEHANE J DATE OF ORDER: 10 december 1997 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The motion to strike-out paras 34, 35 and 36 of the cross-claim and paras 2 and 6 of the cross-claimant's prayers for relief is refused. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 637 of 1997 BETWEEN: PHILIPS ELECTRONICS N.V. First Applicant PHILIPS ELECTRONICS AUSTRALIA LIMITED Second Applicant REMINGTON PRODUCTS AUSTRALIA PTY LIMITED Respondent AND: REMINGTON PRODUCTS AUSTRALIA PTY LIMITED Cross-Claimant PHILIPS ELECTRONICS N.V. First Cross-Respondent PHILIPS ELECTRONICS AUSTRALIA LIMITED Second Cross-Respondent JUDGE: LEHANE J DATE: 10 december 1997 PLACE: SYDNEY REASONS FOR JUDGMENT By their notice of motion filed in Court on 28 November 1997 the applicants sought orders striking out a number of paragraphs of the respondent's cross-claim. All but one of the claims made in the motion have been dealt with. The remaining claim, to be dealt with now, is one for an order that paras 34 to 36 of the cross-claim and paras 2 and 6 of the cross-claimant's prayers for relief be struck out. The context The applicants seek in the proceeding relief based on causes of action including infringement of two registered trade marks. One of the marks has been described, in earlier interlocutory proceedings, as the "two dimensional mark" and the other as the "three dimensional mark". Each is a representation, the former stylised, the latter considerably more direct and obvious, of the shaving head of a triple-headed rotary electric shaver. The applicants claim that the respondent has infringed, and threatens to infringe, each of those marks by the use, in relation to a shaver known as the RR(DT)55, of signs which are substantially identical with or deceptively similar to the registered marks. The respondent, by its defence, admits that the first applicant owns the two registered marks but denies each other element of the cause of action for infringement. In the earlier interlocutory proceedings I held that there was a serious question to be tried in relation to the claims for trade mark infringement, among others, and I made an order, by which the respondent remains bound, restraining the respondent, pending the final determination of the matter or further order of the Court, from selling or advertising for sale or promoting or marketing three models of shavers, including the RR(DT)55. The first applicant is prosecuting in the Office an application (numbered 704664) for an additional registered trade mark. The application was lodged on 15 March 1996. The mark is similar to the three dimensional mark: it is described as consisting "of a shape of a shaving unit consisting of a substantially equilateral triangularly shaped housing containing three circular shaving heads"; the goods covered by the application are described as: Electric shaving apparatus, parts of and accessories to the mentioned goods, including shaving units, consisting of a housing with shaving heads. Evidence was read as to the stately progress of the application. There is no controversy about it. A first examiner's report was issued on 19 December 1996; the applicants' patent attorneys sought from the applicants evidence to be lodged in response to the report and in support of the application; much of the necessary material had been tendered in evidence in these proceedings; the material tendered has now been uplifted and, together with other material, is likely to be lodged shortly. In the absence of an extension of time, the application, if not accepted by 19 March 1998, will lapse: s 37 of the Trade Marks Act 1995 (the Act); but it can be expected that there will be an extension of time. The present controversy The respondent's cross-claim makes the following allegations concerning the first applicant's trade mark application: 34. On 15 March 1996 Philips NV applied for registration of a trade mark under the Trade Marks Act in respect of the following goods in Class 8: Electric shaving apparatus, parts of and accessories to the mentioned goods, including shaving unit, consisting of a housing with shaving heads; ("the pending trade mark application") Particulars The pending trade mark application dated 15 March 1996 and numbered 704664 carries the following description: The mark consists of a shape of a shaving unit consisting of a substantially equilateral triangularly shaped housing containing three circular shaving heads. A copy of the mark which is the subject of the pending trade mark application is attached as Schedule C hereto. 35. At all relevant times the mark the subject of the pending trade mark application, was and is inherently unregistrable as a trade mark under the Trade Marks Act. Particulars (a) the mark is not a trade mark within the meaning of section 17 of the Trade Marks Act; (b) the mark is not a sign which can be used to distinguish goods dealt with in the course of trade by Philips NV from goods so dealt with by any other person; (c) the mark is not capable of distinguishing Philips NV's goods in respect of which the trade mark is sought to be registered from the goods of other persons because it is a representation of functional features of the goods; (d) the mark is not inherently adapted to distinguish Philips NV's goods from the goods of other persons because it is a representation of functional features of the goods; (e) there has been no use by Philips NV of the mark as a trade mark; (f) use of the mark would be contrary to law; (g) registration of the mark would be contrary to the public interest; (h) registration of the mark would be contrary to or would enable Philips NV and Philips Australia to contravene s46 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act"); (i) the functionality of the mark is inconsistent with registrability. 36. Remington is a person aggrieved within the meaning of s.92 of the Trade Marks Act by the fact that the subject of the pending trade mark application may be registered and form the basis of a claim by Philips NV against it and has requested Philips NV to withdraw the pending trade mark application and Philips NV has failed, neglected and refused to do so. On the basis of those allegations the respondent seeks the following relief: 2. A declaration that the subject of the pending trade mark application referred to in paragraph 34 of the Cross-Claim ("the pending trade mark application") is not registrable as a trade mark under the Trade Marks Act. ... 6. An order directing the Registrar of Trade Marks to remove the pending trade mark application from the Register pursuant to section 92(3) of the Trade Marks Act or in the alternative that Philips NV withdraw the pending trade mark application. The applicants seek orders striking out those paragraphs of the cross-claim and prayers for relief. The respondent resists the orders sought. The controversy thus arising raises issues which are of some importance but have not, apparently, been directly the subject of any judicial consideration. Submissions and discussion The applicants' primary submission was that the Court lacks jurisdiction to determine the fate of the pending application. The applicants' written submissions based that proposition in part on s 19 of the Federal Court of Australia Act 1976 and on O 58 r 4-8 of the Federal Court Rules. Unless the Act, by the way in which it provides for the way in which trade mark applications are to be dealt with, is to be taken as ousting any jurisdiction the Court might otherwise have or unless there is no genuine legal controversy (both topics to which I shall return), s 19 of the Federal Court Act, read with s 191(1) of the Act (see also s 39B(1A)(c) of the Judiciary Act 1903), clearly enough in my view confers jurisdiction: the matter (assuming it to be one) is one arising under the Act, a law made by the Parliament. Nor, I think, is the existence of a body of rules, dealing specifically with the procedure on an appeal from the Registrar, of any particular significance. The applicants relied heavily on the scheme of Pt 4 of the Act: the argument - and it has considerable force - was that the Act lays down a procedure for the application, publication, examination and acceptance or rejection of a trade mark application, and for an appeal to the Court by an unsuccessful applicant; likewise, Pt 5 provides for opposition proceedings and for an appeal to the Court from a decision of the Registrar in such proceedings. The legislature must, it was submitted, be taken to have intended that the procedure established by the Act should not be circumvented or short-cut by proceedings, between an applicant for registration and an actual or potential opponent, in which declaratory relief is sought as to whether an application is one which may be, or should be, accepted. In other words, it was submitted, the statutory procedure is exclusive and the role of the Court limited to that of hearing appeals under ss 35 and 56, in which, in accordance with longstanding authority (for example Jafferjee v Scarlett (1937) 57 CLR 115 at 126), the Court gives considerable weight to the opinion of the Registrar. Senior counsel for the respondent, on the other hand, drew my attention to s 32 of the Act, which provides: 32. If a question arises as to the class in which goods or services are comprised: (a) that question is to be decided by the Registrar; and (b) the decision of the Registrar is not subject to appeal and may not be called into question in an appeal or other proceedings under this Act. Thus, the submission was, the legislature had explicitly directed its mind to the question of ouster of jurisdiction, had ousted jurisdiction in relation to the particular question with which s 32 deals and had not done so in relation to other matters. Particularly, it was said, s 32 contemplates the possibility of "other proceedings" under the Act. I am by no means convinced that s 32 advances matters very far. The inclusion of "other proceedings" is easily enough explained by reference, for example, to Div 2 of Pt 8 of the Act under which the Court has power, among other things, to order rectification of the register by correcting an error in an entry. However, it is well established that the "jurisdiction of a superior court to grant declaratory relief is excluded" only by "express language or by necessary implication from the words of the statute, where the words are clear": Telstra Corporation Ltd v Australian Telecommunications Authority (1995) 133 ALR 417 at 426 (Lockhart J, citing Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 435, 436; Oil Basins Ltd v Commonwealth (1993) 178 CLR 643 at 652, 653; Pyx Granite Co Ltd v Minister for Housing and Local Government [1960] AC 260 at 286). Certainly there is no express language in the Act denying jurisdiction to grant a declaration of the kind sought by the respondent, nor in my view are there to be found "clear words" giving rise to a "necessary implication". In Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 the plaintiff sought, among other relief, a declaration that the defendants were not the proprietors of the trade mark "GOLDEN LIGHTS". There were a number of other issues in the case, which the trial judge decided adversely to the plaintiff (Moorgate Tobacco Co Ltd v Philip Morris Ltd 30 May 1979 unreported, Helsham CJ in Eq). As to the declaration about proprietorship, his Honour held (at 23) that: ...it is unnecessary to reach any conclusion about this here, and probably desirable in any event that the matter should await opposition proceedings. The issue before the High Court was whether s 39(2)(a) of the Judiciary Act 1903 prohibited an appeal to the Privy Council: that was so if the Supreme Court was exercising Federal jurisdiction invested in it. The Court held that the Supreme Court had exercised Federal jurisdiction and therefore no appeal lay to the Privy Council. That was so, in the words of Gibbs J (at 468, 469) because the claim for a declaration as to proprietorship (and also for an order restraining the defendants from proceeding with a trade mark application): ...raised for judicial determination questions as to rights which owe their existence to the [Trade Marks Act 1955], or which can only be enforced by virtue of [that Act]... Moorgate is a decision which must, in this context, be treated with some caution. It was not suggested that there is any relevant distinction between the 1955 Act and the present Act; but the issue with which this motion is concerned did not arise and was not considered. Indeed, Stephen, Mason, Aickin & Wilson JJ record, at 479: It was not suggested before us that federal law, more particularly the Judiciary Act, read in the light of the Trade Marks Act, does not authorise a State court to make declarations with respect to issues arising in trade mark applications, though a submission to this effect was pleaded and, it seems, argued in the Supreme Court. It may legitimately be said, however, that Helsham CJ in Eq. dealt with the matter (albeit in a brief section of a judgment which dealt at length with a number of other matters) on the footing that a declaration as to proprietorship ought not to be made not because of a lack of jurisdiction but because, as a discretionary matter, it was more appropriate in the circumstances that the question of proprietorship be dealt with in opposition proceedings; and the High Court appears to have found, at least, nothing surprising about that way of dealing with it (see particularly the joint judgment at 477-480). I am not persuaded, certainly to the level of satisfaction required in strike-out proceedings, that the Act should be construed as depriving the Court of jurisdiction to make a declaratory order of the kind sought. The applicants then made a number of related submissions. A declaration made in this proceeding would not, it was said, bind the Registrar, who would be obliged despite it to perform the obligation under s 31 to examine and report, to accept the application or reject it in accordance with s 33, to advertise the decision under s 34 and to deal, in accordance with Pt 5, with any notice of opposition. Thus a declaration, if granted, would be a futility: the Court could not make an order consequential on the declaration; particularly, it could not order the Registrar not to perform the duty imposed on him or her by the Act. Furthermore, it was said, the question raised by the claim for a declaration was purely hypothetical: the trade mark application might not be accepted or the respondent, or some other party, might successfully oppose its registration. The claim is one in relation to circumstances which have not occurred, and may not happen. The respondent, therefore, has no right or genuine interest as to which there is a legal controversy capable of resolution by declaratory relief: the discretionary power to grant such relief is: ...confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions.. . The person seeking relief must have "a real interest"... and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen"... or if "the Court's declaration will produce no foreseeable consequences for the parties"... . (Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582). Senior counsel for the applicants contended also that a determination resulting in the making of the declaration sought would not give rise, in any future proceedings in relation to the application or the trade mark if registered, to an issue estoppel of the kind described by Dixon J in Blair v Curran (1939) 62 CLR 464 at 531, 532. I should say immediately that I cannot see why, as between the present parties, an issue estoppel would not arise if a declaration were made in the terms sought by the respondent. Indeed, the likelihood of that may itself be a consideration in favour of leaving the question of validity to be regularly determined in the Office, and on appeal, on an application or in opposition proceedings. A declaration made in this proceeding would not, by itself, bind the Registrar (and senior counsel for the respondent indicated that he did not propose to press for relief directed to the Registrar), nor would it conclude issues concerning validity which might arise between the applicants and other parties. Similarly, I am unpersuaded by the respondent's reliance on the principle for which Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 is commonly cited. In my view that principle would not require the applicants to raise by way of cross-claim, in proceedings in which the respondents seek relief for infringement of two registered trade marks, matters going to the question whether a third, similar, trade mark is capable of registration; or why the principle would prevent the respondent from opposing the registration of the third mark, appealing against a decision of the Registrar to register it or taking other proceedings, in relation to the mark, under the Act. In the end, however, the question, on the footing that there is jurisdiction to make a declaration of the kind sought, is whether the case pleaded in support of that relief by paras 34, 35 and 36 of the cross-claim is so evidently hopeless that the paragraphs and prayers for relief should be struck out. It may be accepted that it will be a rare case where the Court finds it appropriate to grant declaratory relief in relation to a pending trade mark application rather than allow the procedure under the Act to take its course. But it is now well established that, given jurisdiction, the provision by statute of a particular means of determining an issue in relation to which a declaration is sought does not necessarily mean that a declaration will be refused (Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421; Salmar Holdings Pty Ltd v Hornsby Shire Council [1971] 1 NSWLR 192); the existence of the statutory procedure is a matter - albeit an important matter - to be taken into account in exercising the Court's discretion. In this case, other relevant matters are likely to include the similarity between the mark applied for and the three dimensional mark; that, in a practical sense, the substantial question in this case is whether the respondent may market, in Australia, a shaver such as the RR(DT)55 without infringing the applicants' monopoly rights; and the possibility that (in the absence of a declaration and, possibly, consequential relief) the respondent, even if successful in this proceeding, may nevertheless, if the mark applied for is registered, face further proceedings of a similar kind before the rights of the parties are fully established and (if that were to be the final result) the respondent can engage in the business activity in which it wishes to engage. Nor, in my view, should it be concluded at this stage that a declaration would be futile. Given the jurisdiction to grant declaratory relief even where consequential relief not only is not, but cannot, be sought, a conclusion that a declaration would be futile is never to be reached lightly. But, in any event, it is not self-evident that consequential relief of the kind sought in Moorgate could not be granted here. I have mentioned the submission that, because there is no certainty that the application will be accepted and the mark registered, there is at present no genuine legal controversy between the parties but merely an hypothetical question. The authorities indicate, however, that it is inappropriate to take a narrow view of the requirement that there be a genuine legal controversy: Ainsworth; Pharmaceutical Society of Great Britain v Dickson [1970] AC 403; Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297. In the somewhat unusual context of this case, I do not think that the question whether the first applicant is entitled to register the mark applied for is, between the present parties, to be dismissed, at this stage, as merely hypothetical. A final answer to that question, in any event, can properly be given, in my view, only in the light of evidence: the warning given (in a somewhat different context) by the High Court in Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 533, 544 is, in my view, applicable here; and it is plainly applicable to discretionary considerations, to some of which I have referred, which arise where a party seeks the exercise of the Court's jurisdiction to grant declaratory relief. Conclusion For those reasons I refuse the motion to strike-out paras 34, 35 and 36 of the cross-claim and paras 2 and 6 of the cross-claimant's prayers for relief. I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane Associate: Dated: Counsel for the Applicant: Mr A J L Bannon SC and Mr R Cobden Solicitor for the Applicant: Allen Allen & Hemsley Counsel for the Respondent: Mr D Shavin QC and Ms E Strong Solicitor for the Respondent: Freehill Hollingdale & Page Date of Hearing: 4 December 1997 Date of Judgment: 10 December 1997