FEDERAL COURT OF AUSTRALIA TRADE MARKS - applicant registered as owner of trade mark "Chifley Tower" in connection with leasing, building and property management applied to restrain respondents from carrying on a business of managing hotels using the name "Chifley" - whether use of part of the trade mark, being the name of a former prime minister constituted an infringement - whether conduct misleading or deceptive where none related to specific building in Sydney CBD. Trade Marks Act 1995 (Cth) ss 10, 120, 234 Trade Practices Act 1974 (Cth) s 52 Mark Foy's Limited v Davies Coop and Company Limited (1956) 95 CLR 190 - applied Australian Woollen Mills Limited v F S Walton and Co Limited (1937) 58 CLR 641 - applied Southern Cross Refrigerating Co v Toowoomba Foundry Pty Limited (1953) 91 CLR 592 - applied Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 - cons. F H Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537 - cons. NG 861 of 1997 MID SYDNEY PTY LTD v THE AUSTRALIAN TOURISM COMPANY LIMITED AND OTHERS NG 861 of 1997 HILL J SYDNEY 11 MARCH 1998 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 861 of 1997 BETWEEN: mid sydney pty ltd (acn 003 942 514) Applicant AND: the australian tourism company limited (acn 066 632 276) First Respondent the international college of tourism and hotel management pty limited (acn 003 144 045) Second Respondent touraust corporation pty limited (acn 057 599 461) and touraust hotels pty limited (acN 065 297 403) Third Respondents the australian tourism company limited first cross claimant the international college of tourism and hotel management pty limited second cross claimant touraust corporation pty limited (acn 057 599 461) and touraust hotels pty limited (acn 065 297 403) third cross claimants mid sydney pty limited cross Respondent JUDGE(S): HILL J DATE OF ORDER: 11 MARCH 1998 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. 2. The cross claim be dismissed. 3. Applicant to pay the costs of the application, cross claimants to pay the costs of the cross respondent. GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 861 of 1997 BETWEEN: mid sydney pty ltd (acn 003 942 514) Applicant AND: the australian tourism company limited (acn 066 632 276) First Respondent the international college of tourism and hotel management pty limited (acn 003 144 045) Second Respondent touraust corporation pty limited (acn 057 599 461) and touraust hotels pty limited (acN 065 297 403) Third Respondents the australian tourism company limited first cross claimant the international college of tourism and hotel management pty limited second cross claimant touraust corporation pty limited (acn 057 599 461) and touraust hotels pty limited (acn 065 297 403) third cross claimants mid sydney pty limited cross Respondent JUDGE(S): HILL J DATE: 11 MARCH 1998 PLACE: SYDNEY REASONS FOR JUDGMENT While most of the entrepreneurs of the 1980s either languish in gaol or engage in constant conflict with their trustees in bankruptcy the legacy of some lives on in the shape of bricks and mortar or, less modest materials such as marble and granite. The present case concerns one such legacy; a large modern tower, at the time it was built at least, one of the tallest tower in Sydney, originally planned to be named the "Bond Tower", but renamed "The Chifley Tower". The building fronts a square in Sydney, known as "Chifley Square" (its official address is 2 Chifley Square), a square named after the former labor party Prime Minister, Ben Chifley who held that office between 1945 and 1949. The building stands at what is practically the highest point in the city; it is bounded by Hunter, Phillip and Bent Streets; is 42 storeys tall, including ground and upper ground floors but excluding car parking and has a total net area of some 72,268 square metres. The basement car park occupies four floors. There are three floors of retail shops (and food outlets) known as the "Chifley Plaza" open to the public. There does seem to be, however, some confusion about the name "Chifley Plaza", and some evidence suggested that this name was, perhaps incorrectly, used to refer to the whole tower building and sometimes also to the public space, "Chifley Square". Given that the name "Chifley Plaza" appears on the building at ground level and then further up the building, the confusion is not surprising. The first retail floor commences in a part of the vestibule of the building and the remaining two floors of retail shops are accessible by escalator from that part of the vestibule. The applicant, MID Sydney Pty Limited, is the owner of the tower complex. It purchased the complex (land, project design and partially completed building) reportedly from Kumagai Gumi Ltd, which company in turn purchased from Bond Corporation Holdings Ltd ("Bond"). However, the evidence suggests that Kumagai's purchase from Bond was on behalf of the applicant. Nothing turns upon this. The building was at the time of purchase, and still is, very impressive. It was designed by a famous firm of New York architects, Kohn Pedersen Fox; is clad externally with granite and floors are finished in marble and terrazzo. The applicant is the registered owner of certain trade marks more fully discussed below. It suffices here to say that is has registered the mark "Chifley Tower" with and without logos in respect of property management services, retail and office leasing services. The respondents announced in September 1997 a proposed venture which involves renaming certain existing hotels managed by the third respondent presently known as "Country Comfort" hotels to "Chifley", differentiated by a location. These hotels are situated at Pennant Hills, a suburb of Sydney, in Brisbane, Canberra, Melbourne and Adelaide. It is proposed that the third respondent, or a company associated with it, also manage a new hotel to be erected in Woolloomooloo at the historical finger wharf, which is to be renovated so as to accommodate in addition to the hotel, residential units and shops. The contemplation is that a long term lease be granted; that it be held by unit holders as part of a strata title or similar development but that the hotel would be managed by the third respondent or a subsidiary of it. The hotel is proposed to be called "Chifley on the Wharf". The name "Chifley" in connection with each hotel managed by the third respondent would be "owned" by the second respondent and licensed to the third respondent. The second respondent is a wholly owned subsidiary of the first respondent and it is difficult to see why the first respondent is a party to the proceedings. It is not suggested that the first respondent procured any infringement of the applicant's marks or otherwise engaged in conduct in respect of which the applicant was entitled to relief. There are other proposals under consideration by the respondents, the details of which are presently confidential. It is unnecessary to say more about these other than that they too involve hotels where the name Chifley is proposed but that no decision has yet been made in respect of them. In none of the hotels proposed to be operated by the third respondent is it contemplated that there would be any residential shops which would be managed by any of the respondents. None of them is contemplated to be a lessor, or lessee of any shop or food outlet. Their involvement is only with respect to the licensing of the name and the management of the hotel to be operated under that name in each site. Indeed, in most of the hotels there are no retail outlets at all. In respect of the proposed finger wharf development there would be shops within the development, but those shops will have nothing at all to do with the respondents. Upon learning of the proposal of the respondents to operate hotels under the "Chifley" name, the applicant engaged in correspondence and ultimately commenced proceedings to restrain the respondents from the use of the "Chifley" name. It seeks to put its case in three ways. First, it complains that for the respondents to conduct hotels under the "Chifley" name would be to engage in conduct which is misleading or deceptive or likely to mislead or deceive contrary to the provisions of s 52 of the Trade Practices Act 1974. It is said that persons would confuse the Chifley Tower with the hotels carried on under the "Chifley" name and would assume association between them. Secondly, the applicant claims that use of the "Chifley" name would involve the respondents in the tort of passing off. Finally, it is said that in engaging in the activities proposed by the respondents the respondents would infringe the registered trade marks of the applicant. By a cross claim the respondents claim that the trade marks on which the applicant seeks to rely should be expunged from the Register. Notice was given to the Registrar of Trade Marks who indicated that he had no intention to intervene to support the validity or otherwise of the trade marks. THE REGISTERED TRADE MARKS Three trade marks are registered in the name of the applicant. The first is the mark CHIFLEY TOWER which is numbered 535916 in Part A of the Register, is in respect of goods in Class 36 and is in respect of services described as follows: "Property management services, retail and office leasing services". The second registered trade mark is numbered 570219 in part A of the Register. It involves the words THE CHIFLEY TOWER together with a logo reminiscent of the mast on top of the building. This mark is in respect of goods in Class 37 and is registered in respect of services described as follows: "Construction repair and building maintenance services." The third mark is registered 570220 in Class A. It is in respect of goods in Class 36 and like the previous mark contains the words THE CHIFLEY TOWER together with a logo in the form of a mast. The services in respect of which the mark is registered are described as : "Leasing of office and retail space; building and property management; all being services in Class 36." THE PROMOTION OF CHIFLEY TOWER On 2 May 1990, that is to say almost immediately after MID had purchased the development, it determined that the building would thenceforth be known as "Chifley Tower". So it may be inferred that an element in that decision was the erasing of the association of the Bond name with the building. Marketing the building to tenants commenced at the same time. The building was advertised as involving superior accommodation, "elegance and power", serving as an impressive introduction to tenants in the building. Although there is a reference in the evidence to a proposal to seek out, inter alia, fast food outlets as tenants it is I think fair to say that MID has at all times aimed at the exclusive end of the corporate and commercial markets when seeking tenants. As at 29 September 1997 business tenants included Messrs Allen Allen & Hemsley, Bankers Trust Australia Limited, the Australian Olympic Committee, Morgan Stanley, Sumitomo Bank Limited, Mitsubishi Trust Australia Limited and Australia/Japan Economic Institute as well as many other well known names in the commercial and financial world. The 41st floor also houses the Restaurant Forty-One, said to be one of Sydney's finest restaurants. This is owned and operated by MID. There are other restaurants in the building and plaza. The naming of the retail area "The Chifley Plaza" appears to have been suggested in or around November 1991. The name was not settled on for some time. Indeed on 6 February 1992 there is reference in internal documents of MID to the retail area being known as "Chifley Court". However by 1994 the name "Chifley Plaza" had been firmly in place. The plaza houses a number of well known designer and fashion houses including Makers Mark, RM Williams, Pierucci, Oxford, Oroton, Principles and Adele Weiss. There is an exclusive hairdresser and florists "Lush" and "Roses only". It is fair to say that MID attempted in the Plaza, as in the Tower, to attract the highest level of tenants. On the whole the strategy appears to have been successful and even if the Oxford shop might be suggested to be on a different level to shops such as Tiffany & Co, Bottega, Veneta, Nini Ricci and Kenzo (all names repeated in the Plaza), it is obvious the attempt has been to cater for the top end of the market. From around the time Chifley Plaza opened in November 1994, it was extensively advertised. Subsequent advertising campaigns have included taxis, airport advertising, banners appearing at the front of the building, radio advertising, promotions in Japan and China, advertising in domestic and international in-flight magazines, advertising in visitors guides, billboards, catalogues, Opera House programs and material on maps of the city particularly directed at the Japanese market, among others. The evidence of the applicant was extensively related to these advertising campaigns. The taxi campaign, for example, used the slogan "Take me to Chifley" using "taxi backs", a form of advertising mounted on a plastic mound on the back of the boot of the taxi. A subsequent campaign following the same lines was "Meet Me" where the following appeared on taxi backs: "Meet me for lunch at Chifley Plaza" "Meet me at Oroton - Chifley Plaza" "Meet me at Kenzo - Chifley Plaza" "Meet me at Astton - Chifley Plaza" "Meet me at MaxMara - Chifley Plaza" "Meet me at Adele Weiss - Chifley Plaza" "Meet me at Pierucci - Chifley Plaza" "Meet me at Chifley Plaza" A later campaign involved the concept of "Treat Me". This included: "Treat me to a world of shopping at Chifley Plaza" and "Treat me to fabulous food at Chifley Plaza" MID has produced a newsletter entitled "Chifley News", the first edition being released in August 1997. In addition there have been a number of exhibitions and promotions held at Chifley Plaza including: "(a) an exhibition of works copied from originals held at the Louvre in Paris; (b) a Michael Mucci Art Exhibition; (c) an Akio Makigowa Sculpture Exhibition; (d) the Atlanta Dream Exhibition; (e) the Fourth World Choral Symposium; (f) a National Geographic Exhibition; and (g) the "Black and White" magazine "Album" Exhibition In the period from 1 April 1996 to 31 March 1997 there has, in addition, been extensive advertising in newspapers and magazines in the Sydney area. I would make the following comments about the mass of advertising material which has been tendered in evidence. First, it is clear that an object of the advertising, whether in respect of the tower or the plaza, has been to create an upper class image, almost a luxury image, for both. Second, the advertising has been directed at promoting either the Tower or the Plaza (in the latter case including as well tenants of the Plaza) as the case may be, that is to say, promoting a building rather than any service that has been carried out by MID. It is clear that a considerable amount of advertising has been directed at Japanese tourists. So "Chifley Plaza" has been promoted extensively in Japanese publications, both circulating in Japan and in Australia. Sometimes the promotions took the form of articles or editorials. On other occasions the promotions took the form of advertisements or coupons entitling the holder to exchange them for products or services in the shops or restaurants located in "Chifley Plaza". A senior manager of MID, Mr Suehiro has since 1995 spent most of his time on Japanese marketing. A large number of examples of the marketing appear in evidence. The marketing is directed either at the various shops in the Plaza or at creating an image for the Plaza itself. Apart from expert marketing evidence to which I will later refer, evidence was adduced on behalf of the applicant by a number of persons associated with shops in the plaza, for example Mr Locke, the Managing Director of a company which is the Australian distributor for MaxMara, an internationally famous brand of women's clothing, Mr Goodall, the Managing Director of the Tiffany & Co stores in Australia and Mr Thiel, the Managing Director of RM Williams Pty Limited. Each of these persons emphasised the significance of the "Chifley Plaza" location and the importance of the advertising and promotion of the space at "Chifley Plaza". In addition, affidavit evidence was read from a Mr Takano, General Manager, Inbound Department of JCT Australia Pty Limited, a company preparing package and group tours for Japanese tourists travelling to Australia and Mr Satoshi Otake, Branch Manager of the Sydney office of Kintetsu International Express (Oceania) Pty Limited, a company responsible for bringing in each year some 80,000 Japanese tourists to Sydney. Mr Takano points to the significance which shopping has to Japanese tourists and thus the significance to such tourists of the shopping development at "Chifley Plaza". The number of Japanese tourists visiting Sydney, as deposed to by Mr Otake, clearly demonstrates the significance of the advertising directed at Japanese tourists. EVIDENCE OF THE RESPONDENTS Apart from expert marketing evidence seeking to answer evidence of the same kind adduced by the applicant, most of the respondents' evidence was directed at the events which led to the decision taken by the respondents to adopt the name "Chifley" for hotels managed by the third respondent. The Country Comfort chain of hotels comprises a number of hotels which have operated under that name for some 25 years. For 11 of those years the hotels have been managed by the third respondent. The Country Comfort chain operated in both regional and capital cities. The Managing Director of the third respondent, Mr Courtney-O'Connor, together with Ms Janet Turner, Group General Manager Marketing of the third respondent, on and from August 1995 started to investigate the possibility of developing a new brand for the hotels in the group. Boomerang! Integrated Research Pty Limited and Bennett Research (Aust) Pty Limited were employed to assist in developing a branding strategy. Market research was undertaken. By about March 1996 it seems that the decision to rebrand the Country Comfort hotels was taken although a choice had not then been made as to the name to be adopted. The name "The Chifley Hotel" appears to have been first mentioned in around March 1996 as among a number of possibilities. Parameters regarded as important for the new name included that it sounded Australian, would be easy to pronounce and sound business like and serious without precluding the leisure market. The name "Chifley", in connection with the potential branding of the hotels, seems only to have been seriously considered when a short list of names was prepared for testing by market research at the end of July and on into August 1996. Ms Turner prepared a document on or about 22 August 1996 entitled "Branding Project Update Country Comfort and Brand X". At the time she prepared that document the name "The Chifley" was not included in it. On or about 5 September 1996 she amended the document adding the words "The Chifley" and other names to the list then under consideration. Thereafter the name remained for consideration in the market research undertaken. The market research consisted of asking groups of persons to estimate the corporate rates that would be charged for various names put forward including the names of competitor hotels. The name "The Chifley" received the endorsement of an advertising agency DDB Needham in a telephone call to Ms Turner of 29 August 1996. The agency made the following points in connection with the "Chifley" name: " * Politician of great stature -Prime Minister * Australian sounding with flair * Four star feel * Capitalises on strength of "Chifley Tower" Ms Turner read the comment including the reference to Chifley Tower and added on receiving it the words "if there is any association it would be positive. Quality building - no negative association". All that it is necessary to say about the events thereafter is that, whilst Mr Courtney-O'Connor appeared not to have been favourably inclined to the "Chifley" name, it did well in the market research. Terry Squire of Bennett Research (Aust) Pty Limited advised Ms Turner on 18 September 1996 that "the name 'Chifley' came up well". He said, referring to thegroups upon which it had been tested: "They liked it, they felt it sounded business like, Australian, solid and stylish. There were a few comments that it may be a little 'Canberraish' and political in relation to Ben Chifley, the past Prime Minister". Ms Turner asked whether this was much of an issue and was told that it was not a big deal. Mr Squire added: "... it was not a political comment, it was more of an extension of their comment about Chifley Square because it was named after him." As and from the day of that conversation, Ms Turner determined to recommend to the respondents to adopt the Chifley name as best fitting "the Brand X criteria". Ms Turner's recommendation was accepted subject to the respondents' solicitors checking the availability of the name. From this material it seems quite clear that no attempt was made by the respondents in any way to capitalise upon the applicant's reputation in the Chifley Tower or Chifley Plaza. To the extent that the name received endorsement from market research it may be inferred that in part the name reminded members of the groups participating in that research of the former Prime Minister and in part the building which itself bore Mr Chifley's name. On 18 August 1997 the respondents held a press conference to announce that the third respondent had been selected to manage the proposed $100 million hotel at the finger wharf at Woolloomooloo and that a decision had been made to create a new capital city brand. A press release issued at that conference said, inter alia: "Australian Tourism Group and its management company, Touraust Corporation, have created a new brand name - "The Chifley" - for their capital city hotels. The Chifley on the Wharf will be the flagship of the new brand for Australian Tourism Group. The addition of the Chifley on the Wharf will lift the total number of rooms controlled by Australian Tourism Group Touraust Corporation around Australia from 1,769 to 2,667 in 28 hotels, making it the third largest hotel group in Australia for hotels under management and sixth largest above Hyatt Hotels, Hilton and Radisson Hotels in numbers of rooms ... Australian Tourism Group and Touraust Corporation will continue to develop the successful Country Comfort brand, which will remain for their major regional hotels and their other brand Australis will be expanded as the group's premier leisure brand." The proposed Chifley on the Wharf was to be a 270 room hotel with a 4.5 star rating and modern functions and conference facilities for up to 300 people, deluxe accommodation, cocktail bar, ŕ la carte restaurant and brasserie, specialising in contemporary food. Subject to the outcome of the present case, it is contemplated that the "Chifley" hotel group will be launched to the public in or around May this year. EXPERT MARKETING EVIDENCE Expert marketing evidence was adduced on behalf of the applicant from Mr Blanket, a lecturer in advertising and promotions at Macquarie University Graduate School of Management. Mr Blanket also consults in matters involving marketing, advertising and promotion. In his evidence Mr Blanket discusses among other things the concept of "brand extension", that is to say, using his words: "The practice by which a brand name that has been established and used in relation to one product or service is adapted for use in relation to a different product or service. It also applies when the same product or service is applied to a different market." Mr Blanket points out that brand extension has become common because the process of establishing a new brand is expensive. Brand extension may not always be successful. He cites Professor Aaker in his book "Managing Brand Equity" (Free Press 1991) as concluding that successful brand extension depends upon two factors: firstly, the transferability of skill and assets of the brand, that is to say brand associations which make the brand effective in respect of the new product or service which is applied and, secondly, complementarity, that is to say some national association in the minds of consumers between the brand being used and the new product to which it is applied. Mr Blanket gives examples where brand extension has successfully occurred. Thus the name "Dunlop" was extended from tyres to clothing and sporting equipment; the name "Dunhill" from upmarket tobacco products to all manner of luxury goods. Mr Blanket talks also of brand names being extended geographically and illustrates this by reference to a worldwide hotel chain which has extended into different target markets. He saw the use of Chifley Plaza as a brand extension of Chifley Tower. He concludes: "In my opinion, the long exposure of the Australian public to brand extension has made them familiar with the practice. As a marketing practice, it depends on the target market recognising that a brand has been transferred from one product or service to another. Further, the "attachment" of the brand associations to the new product or service in the minds of the members of the target market depends on them assuming there is some connection between the products or services, old and new." What is sought to be drawn from this material is that the advertising to which reference has already been made involved promotion of the brand names Chifley Towerand Chifley Plaza each having its element of the brand name "Chifley" and that this brand name could be extended presumably to hotels. In response to Mr Blanket's evidence the respondents called Ms Strachan, a director of Inview Pty Limited, a market research company. Ms Strachan had been involved continuously in market research in excess of 30 years and was engaged in evaluating the effectiveness of advertising campaigns for many major companies. Ms Strachan's view is that the theory of market extension dealt with by Mr Blanket has no relevance to Chifley Tower and Chifley Plaza. She points to the fact that each of Chifley Tower and Chifley Plaza was named after the square in which the building was located rather than directly after the politician, Mr Chifley. In her view the words "Chifley Tower" were never a brand in a marketing sense and so could not be the subject of brand extension. She says that both Chifley Tower and Chifley Plaza are components of an address rather than a brand. There is much, I think, to be said for the view that this marketing evidence was not really relevant in any sense to the issues before the Court. But if it were relevant, certainly its relevance was quite tangential. Be that as it may, in cross examination Mr Blanket said that the development of a brand name (a prerequisite for brand extension) involved three tests. First, there had to be a name; second, there had to be a "livery" or a logo form that is consistent not only with the name of the location but through promotional material and, finally, there has to be certain imagery associated with the name through advertising and promotion. Mr Blanket refused to accept the idea that Chifley Tower should be seen as a location rather than a brand name. It is hard to see why it is not a location name (even if also capable of being a brand name) when tenants of the tower including the applicant's solicitors use the name "Chifley Tower" in their address or letterheads and tenants of the plaza do likewise. I had the impression that Mr Blanket had become a quite passionate advocate for the cause he was espousing and, to the extent that it is necessary to choose between his evidence and that of Ms Strachan, I prefer Ms Strachan whose professional and practical experience appears to be greater than that of Mr Blanket despite Mr Blanket's close association with Macquarie University. The remaining evidence in the case concerned the use of the name "Chifley" in other developments. It is unnecessary to refer to all of the occasions when the name Chifley has been used. For present purposes it is sufficient to say that the word "Chifley" is the name of suburbs in Sydney, Canberra and Bathurst; that there is a Chifley Arcade, being an arcade of shops in Elizabeth Street in Sydney and that the name "Chifley" is associated in various ways with hotels and restaurants throughout the country. THE CLAIM FOR INFRINGEMENT OF TRADE MARKS Counsel for the applicant conceded that the trade mark infringement case need only be tested in respect of the Trade Mark No. A535916 in respect of the mark CHIFLEY TOWER without logo since, if the applicant's case did not succeed with respect to this registration, it could not succeed, a fortiori, in respect of the marks registered together with logos since it was never suggested that the respondents in any way proposed to use the name "Chifley" together with the logo, the subject of the other registrations. The relevant provisions of the Trade Marks Act 1995 ("the Trade Mark Act") are ss 120(1) and (2) which provide as follows: "(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered. (2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to: (a) goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or (b) services that are closely related to registered goods; or (c) services of the same description as that of services (registered services) in respect of which the trade mark is registered; or (d) goods that are closely related to registered services. However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion." Under subsection (1) for the applicant to show that the proposed or threatened use by the respondents of all or any of "The Chifley", "The Chifley Hotels", "The Chifley on the Wharf" and "The Chifley on the [various addresses]" infringe the applicant's mark it must show that these uses are substantially identical to the applicant's mark "The Chifley Tower" or deceptively similar to that mark in relation to the relevant services in respect of which the mark is registered; namely "property management services, retail and office leasing services". Although subsection (2) builds upon the circumstances of infringement referred to in subsection (1) and so offers an expanded basis new to the 1995 Act there is no suggestion in the present case that subsection (2) has any relevance. It is common ground between the parties, that the third respondent proposes to use the word "Chifley" as part of the brand name of its hotels and that that use would be use as a trade mark. The issues dividing the parties are first whether the mark or marks proposed to be used by the third respondent would be substantially identical with or deceptively similar to the mark "Chifley Tower" and, if so, whether there is a use by the third respondent in relation to services of the kind referred to in the applicant's registration and in respect of which it has a statutory monopoly. The first issue raises the question of the significance in the applicant's mark of the name "Chifley" and the word "Tower". It is the applicant's submission that, provided the respondents use the mark in respect of the services for which the applicant has secured registration there will be infringement merely by using the word "Chifley" irrespective of the non use of the word "Tower". There are obviously cases where the use by a respondent of part only of the registered mark will constitute an infringement. Some minor addition or variation from the registered mark will ordinarily not suffice to prevent an infringement. In every case the question is whether comparison between the mark as registered and the mark sought to be argued as an infringement leads to a conclusion that the respondents' use of the mark indicates the origin of the goods or services as being goods or services of the applicant and subject to its registration. So, as the High Court made clear in Mark Foy's Limited v Davies Coop & Co Limited (1956) 95 CLR 190 (see at 205 in the judgment of William J, with whom Dixon CJ agreed) the addition to a mark of the respondent's name will avail the respondent nothing; there would still be an infringement. But each case will turn upon its own facts. Where, as here, a name of a suburb (or for that matter a famous person) is used in connection with another word which is a description (in the present case "tower"), it is clear that the legislation contemplates the use of both words before there will be an infringement. In my view, for a person to use the name "Chifley" in respect of services of the kind enumerated in the applicant's registration would not, on the facts of the present case, involve an infringement. In respect of those services, registration does not confer upon the applicant a monopoly in the use of the word "Chifley". In my view the monopoly is only conferred where in respect of the relevant services there is a use of the mark on the sign "Chifley Tower". Some assistance is given by the decision of Parker J in Re Pianotist Co Ltd's Application (1906) 23 RPC 774 at 777 where the word "Neola" was held not to infringe the mark "Pianola" and in the judgment of the High Court in Australian Woollen Mills Limited v F.S. Walton and Co Limited (1937) 58 CLR 641 at 658, a case concerned with a graphic mark and the word "Crusader". At 658-9 Dixon and McTiernan JJ said: " ... In the end, it becomes a question of fact for the Court to decide whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained. In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. ... If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, then similarities both of sound and of meaning may play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight. ...The main issue ... depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs. For ourselves we find it very hard to suppose that anyone would confuse 'Caesar' as a name or the representation of 'Caesar' with the title 'Crusader' or with the brand of the appellant." Likewise, where the use of the name "Chifley" is used in connection with a hotel managed by the third respondent. I do not think that confusion would arise with respect to "Chifley Tower" in relation to the services for which that mark has been registered. There are many cases to which reference could be made. So the word "Coldstream" with a representation of guardsmen would not constitute an infringement in conflict with a mark "Airstream" for refrigerators; Coldstream Refrigerators Ltd v Aircrafts Pty Limited (1950) 20 AOJP 1491 (HC) cited in Shanahan "Australian Law of Trade Marks and Passing Off" 2nd ed p175 (footnote 41). Much depends upon determining what the essential feature of a relevant mark is and the relationship between components where the mark consists of more than one component, where there are components of the various components. Registration of "Miss World" would not confer a monopoly on the word "World" and relief was denied accordingly against a "Mrs World" pageant by Pincus J in Miss World (Jersey) Ltd v Mrs of the World Pageants Inc (1988) AIPC 90-460(FC). The second matter concerns the question whether the third respondent, or for that matter any of the respondents, proposed to use the mark in respect of a service in respect of which the applicant obtained registration. The subject will be the class of services in respect of which the mark was registered. It is important to note at the outset of this discussion that the applicant's case is not that registration of the mark "Chifley Tower" prevented any person using the name "Chifley" in connection with a hotel. The submission is that the third respondent in performing agreements to manage hotels using the name "Chifley" was using that mark in respect of property management and retail and office leasing services. The applicant's written submission on this aspect of the case put the matter as follows: "The use by the respondents has been and will be in respect of 'property management' and 'retail and office leasing' services. On their ordinary construction those words cover all activities usually undertaken in the management of any building (emphasis added) including, without limitation, hotel buildings. They also include all manner of activities which are the usual adjunct to any arrangement by which a space in a building is occupied or used in consideration of the payment of rent or a fee to the proprietor or an occupier of it. These include the location of occupants, making the building attractive to present and potential occupants by establishing a valuable reputation in the building, the negotiation of terms of the lease or occupancy, the collection of rent and the moneys, arranging or carrying out maintenance on repairs to the premises, preparations to, during or after the period of occupancy and so on. They also include services provided on behalf of a proprietor to the occupier of a building and visitors to occupants of the building. Whether they be office tenants, retail tenants, customers of such tenants and the users of hotel facilities including accommodation, function activities, restaurants, coffee shops and the like, e.g. concierges in hotels and offices, directing desks in retail centres etc." Superficial attractiveness of the applicant's submission lies in the fact that the first respondent "manages hotels for persons who own the real estate". As the applicant would have it, this means that the third respondent is in the business of property management as those words are used in the applicant's registration. Some assistance in understanding what the third respondent proposes to do and the sense in which the word "management" is used in connection with managing a hotel can be obtained from the management agreement proposed for the "Chifley on the Wharf Hotel". The draft is confidential and I refrain from doing more than referring to provisions which are uncontroversial. Under the agreement, the third respondent is to be the sole and exclusive manager of the hotel for a term set out in the agreement. The manager's obligation is to operate the hotel subject to the terms of the agreement. Put in another way, the hotel business is to be conducted by the so-called manager who employs staff, operates in accordance with an agreed budget and becomes entitled to be paid a fee which is dependent upon results. The role of the third respondent is not one of property management at all. It is in the business of running a hotel which is a particular form of business rather than managing a particular form of property. In my view, to the extent that the use of the word "Chifley" in connection with a hotel by the third respondent is the use of a sign that is substantially identical with or deceptively similar to the applicant's registered mark "Chifley Tower", the use by the third respondent is not a use in relation to the services in respect of which the applicant's mark is registered. It follows, in my view, that there can be no infringement, either in respect of the proposed use of the word "Chifley" in the context of the "Chifley on the Wharf" or for that matter in respect of the re-badging of the Country Comfort hotels in capital cities. Insofar as the applicant relies upon s 120(2)(c), the services offered by the respondents are not services of the same description either. In these circumstances it is not necessary to consider whether the third respondent might avail itself of the defence contained in the last part of s 120(2) (namely demonstrating that using the sign was not likely to deceive or cause confusion). DECEPTIVE SIMILARITY The applicant submits, as well, that the use of the "Chifley" marks as proposed by the respondents would be if not substantially identical then at least deceptively similar to the applicant's use of the mark "Chifley Tower". The words "deceptive similarity" are defined in s 10 of the Trade Marks Act in the following terms: "For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion." For the applicant to succeed, the applicant must show that there is a real tangible danger of deception occurring. In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Limited (1953) 91 CLR 592, Kitto J at 595, speaking in the context of the previous law said that it would be sufficient to show deceptive similarity: "... if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt." In my view the proposed use by the third respondent is not in the relevant sense a deceptively similar use to the use of the "Chifley Tower" mark by the applicant, assuming that the applicant in fact uses the "Chifley Tower" mark at all in respect of the services named in the registration. The matters upon which I would rely in reaching this conclusion are the same as those already relied upon in considering substantial identicality. The word "Tower" in the context of "Chifley Tower" is itself a significant element, particularly when regard is had to the fact that the word "Chifley" is a geographical reference. Thus to omit the word "Tower" is to change totally the mark deleting from it a most significant element; the word "Tower". The expression "Chifley Tower" is not such that the mark would be invoked by a reference to either the word "Tower" or the word "Chifley". So it differs from the example of the Pillow Book discussed by Burchett J in Polo Textile Industries Pty Limited v Domestic Textile Corporation Pty Limited (1993) 26 IPR 246. THE CASE UNDER s 52 AND PASSING OFF Senior counsel for the applicant conceded that, if the applicant was not successful under s 52 of the Trade Practices Act 1974 (the "Trade Practices Act") it would fail in its case alleging that the respondents' use of the word "Chifley" in connection with a hotel would involve the tort of passing off. In making that concession, senior counsel was undoubtedly correct. Accordingly, I do not, in the discussion that follows, deal separately with passing off. The applicant's case is that, as a result of the advertising which it has undertaken, it has built up a reputation both in respect of the names "Chifley Tower" and "Chifley Plaza". It is said that the use by the respondents of the name "Chifley" in connection with a hotel would cause persons to believe that there was some association between the hotels in respect of which the name "Chifley" would be used on the one hand by the applicant or "Chifley Tower" or "Chifley Plaza" on the other. It is no doubt correct to say that a significant reputation has been developed in respect of the building to which the words "Chifley Tower" and "Chifley Plaza" attach. That reputation by its very nature is geographically contained. "Chifley Plaza", the subject of the advertising, and "Chifley Tower" refer to the office or retail shops in the building situated at "Chifley Square". With respect to senior counsel for the applicant, such reputation as there may be, can hardly extend to hotels situated outside Sydney in other States. If the argument has any chance of success at all, it can relate and relate only to Sydney for it is only in that city that the "Chifley Tower" or "Chifley Plaza" has a reputation. There many difficulties in the path of the applicant succeeding. The words "Chifley Tower" refer to a tower building erected in Chifley Square in Sydney. The words "Chifley Plaza", to the extent that they indicate a reputation at all, refer to retail shopping facilities on three floors of the Chifley Tower Building. In other words, the word "Chifley" has a geographical connotation referring as it does to the square upon which the building is erected. It is of some significance to note that a pharmacy in the Chifley Plaza area uses the name "Chifley Plaza Pharmacy" without objection of the applicant. Nor could it be right to say that the applicant has some exclusive reputation in the word "Chifley". A considerable body of evidence shows the word "Chifley" has been used by many persons over many years. A Chifley Arcade has existed in Sydney since 1976. The "Chifley Bistro" and the "Chifley Arcade Newsagency" have likewise existed since 1976. The name "Chifley" is not only geographical but also refers to a person. To develop a reputation for a building called "Chifley Tower" does not bring with it the consequence that anyone else who uses the word "Chifley" in association with some other activity, be it hotel or otherwise, acts in a way which is misleading or deceptive in so doing. Given the fact that "Chifley" is both a geographical name and the name of a person, it cannot in my view, develop a secondary meaning related to the applicant. Put simply, the fact that the building at Chifley Square has a reputation, developed as a consequence of advertising in which the now Chifley Tower or Plaza has been promoted, does not entitle the applicant to restrain any other persons from using the name "Chifley" in the context of operating a hotel even in the Sydney metropolitan area. So to do will not amount to conduct in breach of s 52 of the Trade Practices Act. Likewise, no question of passing off arises. THE CROSS CLAIM By its cross claim the respondents (cross claimants) seeks to have the three registrations to which reference has already been made expunged from the Register. Having regard to s 234(2) because the marks were registered immediately before 1 January 1996 and have not since then ceased to be registered and because seven years from the date of the registration has elapsed, the marks are taken to be valid unless the cross claimant shows either:- * the original registration was obtained by fraud; or * the registration of the trade mark would be contrary to s 28 of the repealed Act; or * the trade mark did not, at the commencement of the proceedings, distinguish the goods or services of the registered owner in relation to which the trade mark is used from the goods or services of other persons. The reference to s 28 of the repealed act is a reference to a mark likely to deceive or cause confusion. In my view the cross claimants could not show and have not shown that the applicant's registration was contrary to s 28 of the repealed Act. It follows therefore that the cross claimants must rely upon the ground that the three registrations did not, as at the commencement of the proceedings, distinguish the services of MID in relation to which the trade mark was used from the services of others. Some assistance is to be obtained from cases such as Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 where the question arose whether a mark was adapted or capable of becoming adapted to distinguish particular goods. In that case, the mark was the word "Michigan", a geographical name and it was held that such a name could hardly ever be adapted to distinguish the goods of one person from the goods of another as Kitto J points out at 516. Some words can never acquire distinctiveness so as to justify registration among which are the names of large and important industrial towns or districts. Other marks are inherently incapable of distinguishing the goods of a person from the goods of another - even after long use cf F H Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537. In principle, there is no reason why the words "Chifley Tower" could not be used to distinguish the services of the applicant in the field of property management from the services of others. The applicant did provide services to its tenants and did use the marks "Chifley Tower" with or without logo. In my view, the respondents, as cross claimants, have not established a case under s 234(2) for expungement of the marks and the cross claim accordingly fails. I would thus dismiss the application and dismiss the cross claim. In each case costs will follow the event. I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill Associate: Dated: 11 MARCH 1998 Counsel for the Applicant: D K Catterns QC with R J Webb Solicitor for the Applicant: Allen Allen & Hemsley Counsel for the Respondents: A J Bannon SC with S Emmett Solicitor for the Respondents: Blake Dawson Waldron Date of Hearing: 23-25 February 1998 Date of Judgment: 11 March 1998