FEDERAL COURT OF AUSTRALIA Australian Associated Motor Insurers Ltd v Australian Automotive Motor Inspection Centre Pty Ltd [2003] FCA 1088 TRADE MARKS – application for interlocutory injunction – claims of trade mark infringement, misleading and deceptive conduct and passing off – use of acronym similar to applicant's mark – whether serious issue to be tried – whether respondent's mark substantially identical with or deceptively similar to applicant's mark – whether respondent's mark used in relation to services of the same description – mark well known in Australia – circumstantial case of deliberate adoption of mark likely to be confused with applicant's mark – allegation of wrongful motive of applicant Trade Practices Act 1974 (Cth) ss 52, 53(c)(d) Trade Marks Act 1995 (Cth) ss 10, 120(1), (2) and (3), 126 Bullock v Federated Furnishing Trades Society of Australasia (1985) 60 ALR 347 followed Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 followed Shell Company of Australia Ltd v Esso Standard Oil Australia Ltd (1961) 109 CLR 407 followed Seven-Up Co v Bubble Up Co Inc (1987) 9 IPR 259 followed MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 at 243-244 followed Lone Star Steakhouse & Saloon Inc v Zurcas (2000) 48 IPR 325 cited San Remo Macaroni Company Pty Ltd v San Remo Gourmet Coffee Pty Ltd (2000) 50 IPR 321 cited Australian Woollen Mills Ltd v FS Walton and Co Ltd (1937) 58 CLR 641 followed Parfums Christian Dior (Australia) Pty Ltd v Dimmeys Stores Pty Ltd (1997) 39 IPR 349 cited Meyers v Casey (1913) 17 CLR 90 followed Dering v Earl of Winchelsea (1787) 1 Cox 318, 29 ER 1184 cited Meagher, Gummow and Lehane's Equity:Doctrines and Remedies (4th ed, 2002) at 729 F J Smith "The Trade Marks Amendment Act 1978" (1979) 53 ALJ 118 AUSTRALIAN ASSOCIATED MOTOR INSURERS LTD v AUSTRALIAN AUTOMOTIVE MOTOR INSPECTION CENTRE PTY LTD & ANOR V683 of 2003 HEEREY J 2 OCTOBER 2003 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V683 OF 2003 BETWEEN: AUSTRALIAN ASSOCIATED MOTOR INSURERS LTD ACN 004 791 744 APPLICANT AND: AUSTRALIAN AUTOMOTIVE MOTOR INSPECTION CENTRE PTY LTD and ANOTHER RESPONDENT JUDGE: HEEREY J DATE OF ORDER: 2 OCTOBER 2003 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Until the final hearing of this proceeding or further order, the first and second respondents or either of them, whether by themselves, their directors, servants, employees or agents, or howsoever, otherwise be restrained from: (a) using the word, letter, sign or acronym "AAMIC" in the course of business conducted by it for the advertising, promotion, offer for sale and supply of services relating to the inspection, assessment and repair of motor vehicles; and (b) publishing, disseminating or causing to be published or disseminated, reproducing or causing to be reproduced in any material form the advertisement or any similar advertisement, a copy of which is exhibit JM1 to the affidavit of James Merchant sworn 24 September 2003 and filed in this proceeding. 2. Within 7 days of the date of this order the respondents take all necessary steps to effect the alteration of: (a) the Telstra White Pages telephone listing for "AAMIC" and (b) the registration of the business name "AAMIC" with the Victorian Office of Business Affairs (registration No B1696292X) such that neither of them utilise the acronym "AAMIC". 3. There be liberty to apply. 4. The costs of the parties of and associated with the application for interlocutory injunction be reserved. 5. The time for discovery ordered by Merkel J on 28 August 2003 be extended for 14 days. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V683 OF 2003 BETWEEN: AUSTRALIAN ASSOCIATED MOTOR INSURERS LTD ACN 004 791 744 APPLICANT AND: AUSTRALIAN AUTOMOTIVE MOTOR INSPECTION CENTRE PTY LTD and ANOTHER RESPONDENT JUDGE: HEEREY J DATE: 2 OCTOBER 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The applicant Australian Associated Motor Insurers Ltd seeks an interlocutory injunction to restrain use by the respondents of the acronym AAMIC, which is formed from the corporate name of the first respondent Australian Automotive Motor Inspection Centre Pty Ltd. 2 The applicant relies on trade mark infringement, contraventions of ss 52, 53(c) and (d) of the Trade Practices Act 1974 (Cth) and passing off. 3 The applicant is the registered proprietor under the Trade Marks Act 1995 (Cth) of the following trade marks: (a) 835436 for AAMI and A.A.M.I., which is registered in class 36 for insurance including car, third party, personal accident, caravan, boat, home, personal effects, building, travel and life insurance; and financial services, including commercial loan finance and securities, personal loans, superannuation, rollover funds, investment services and financial planning; (b) 835437 for AAMI INSURANCE and A.A.M.I. INSURANCE, which is registered in class 36 for insurance including car, third party, personal accident, caravan, boat, home, personal effects, building, travel and life insurance; and financial services, including commercial loan finance and securities, personal loans, superannuation, rollover funds, investment services and financial planning; and (c) 715268 AAMI LIFETIME; AAMI LIFE-TIME; AAMI LIFE TIME (series) in class 36 in respect of "all insurance products"; (d) 737402 AAMI LIFETIME (device) in class 16 in respect of "all printed matter"; and (e) 737403 AAMI LIFETIME (device) in class 36 in respect of "all insurance products". 4 The applicant has carried on business in Victoria and elsewhere throughout Australia since January 1970. Its core business is that of a motor vehicle insurer. However, since 1989 it has diversified into other areas of insurance and also financial services. The applicant has always traded under the acronym AAMI and, generally speaking, in its marketing does not use its full corporate name. 5 The applicant needs to show that there is a serious issue to be tried and that on the balance of convenience an injunction should be granted. This latter question involves a comparison of the harm which the applicant would suffer if no injunction were granted but it succeeds at trial as against the harm the respondents would suffer if an injunction is granted but they succeed at trial. Authority need not be cited for these undisputed propositions. However, mention should be made of the principle that the apparent strength of an applicant's case is a factor which can weigh in favour of the grant of an injunction: Bullock v Federated Furnishing Trades Society of Australasia (1985) 60 ALR 347 at 241, Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 154. 6 It was not in dispute that there is at least a triable issue that the applicant has a very substantial reputation and goodwill in Victoria and elsewhere throughout Australia in the acronym AAMI. Some of the evidence supporting this conclusion is as follows. The applicant has a customer base of more than 2.3 million policyholders and a turnover of approximately $1 billion. It has advertised extensively on television and radio and in the print media, spending some $95 million over the last ten years. It has sponsored a number of prominent and successful sporting teams and events including the Brisbane Lions Australian Rules football team, the ACT Brumbies Rugby Union team, the AAMI Victoria Derby and the AAMI Golden Slipper. 7 The applicant uses the letters AAMI in a simple sans serif font and not as part of any logo or device; it is the letters themselves which form the main visual feature of the mark. As part of its advertising campaigns, the applicant has for many years featured the image of a young woman wearing a telephone headset or answering a telephone alongside the mark AAMI. 8 The first respondent was incorporated earlier this year on 28 May 2003. Shortly before that, on 19 May 2003, the second respondent Melanie Kate Burns registered with Consumer Affairs Victoria the business name Australian Automotive Motor Inspection Centre. On 19 June 2003 she registered with that Authority the business name "AAMIC". 9 The business of the first respondent is that of inspecting repairs that have been carried out on damaged motor vehicles and seeking to have defective repairs rectified. The business involves the first respondent obtaining an authority from a vehicle owner, inspecting the repaired vehicle and, if the repairs are defective, insisting that the insurer have the repairs properly carried out. The first respondent then seeks to claim from the insurer its charges for that activity. It seems, perhaps understandably, that insurers have not been always willing to respond to this request. In that event, the ultimate liability for the first respondent's charges falls on the vehicle owner. 10 Since early August 2003 the first respondent has used a business card, a fax form and a form of authority to be signed by vehicle owners, each of which bears the acronym AAMIC above the words, in considerably smaller letters, "Australian Automotive Motor Inspection Centre". 11 At the front of its premises at 88-90 Keys Road, Moorabbin, the first respondent has since some time after 11 August displayed a large sign bearing the acronym AAMIC. Again the words "Australian Automotive Motor Inspection Centre" appear underneath. The word "Australian" occupies the first line and is larger than the other words, although only approximately half the size of the letters in the acronym. There is no direct evidence of the sign's dimensions, but looking at photographs which were in evidence it would appear to be about four metres by three metres. 12 On 22 September the first respondent published in four suburban newspapers with a combined readership of 295,000 in the south eastern Melbourne Metropolitan area an advertisement with the acronym AAMIC prominently displayed and featuring a young woman holding a telephone. The advertisement was headed "Crashed a car lately? CALL AAMIC…" 13 On 1 October a flyer in the same terms as the advertisement was left on the windscreens of many cars in the car park of Southland Shopping Centre. 14 In all the foregoing instances the letters AAMIC appear in sans serif font within an oval device, violet in colour, with a raised border as follows: 15 At some time prior to 28 August the first respondent caused a listing to be entered in the internet version of the Telstra White pages under the name AAMIC without its corporate name. A search for "aami" produces entries for the applicant, AAMI Skilled Drivers of Australia Limited (a company owned by the applicant) and the first respondent's acronym AAMIC. 16 In August there was correspondence between the parties' solicitors but no resolution was reached. The present proceeding was commenced on 26 August. The matter came on before Merkel J on 28 August. The applicant elected to pursue the course of a speedy trial rather than pursuing interlocutory relief. However, as a result of activity of the respondents since that date, the applicant now seeks such relief. 17 The applicant claims that the first respondent's acronym AAMIC is substantially identical with, or deceptively similar to, its marks (see Trade Marks Act, s 120(1) and (2)). 18 The test of substantial identicality involves, as Windeyer J pointed out in Shell Company of Australia Ltd v Esso Standard Oil Australia Ltd (1961) 109 CLR 407 at 414-415, comparing the two marks side by side. Their similarities and differences are noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance and the similarity that emerges from the comparison. 19 I think there is, arguably, a case of substantial identicality. I note particularly that the first respondent's mark includes the whole of the applicant's registered mark: Seven-Up Co v Bubble Up Co Inc (1987) 9 IPR 259. The entirety of the applicant's mark has been incorporated into the logo used by the first respondent; notwithstanding that there is an oval background, the essential visual impression remains the same. 20 As to deceptive similarity, s 10 of the Trade Marks Act provides that this test will be satisfied if the allegedly infringing mark "…so nearly resembles that other that it is likely to deceive or cause confusion." 21 The comparison to be made is between, on the one hand, the impression based on the recollection of the applicant's mark that persons of ordinary intelligence and memory would have and, on the other hand, the impression such persons would get from the respondent's display of that mark: Shell Co at 415. 22 I think there is an arguable case of deceptive similarity. It is a common experience that, when one is familiar with a particular word and comes across another which is very similar, one's mind, programmed, so to speak, to recognise the first word, short tracks to a conclusion that the second word is the same. Anyone with experience of proof reading will recognise this phenomenon. So someone familiar with the acronym AAMI and, knowing it represents a motor vehicle insurer, encounters the acronym AAMIC in a context related to the repair of motor vehicles, may well, at a quick glance, not detect the difference. And even if the difference is recognised, such a person may think that the terminating letter "C" does not denote a completely different trader. They might think that AAMI is now operating an inspection centre and that the "C" simply indicates that that centre is AAMI's centre. 23 As to the field of activity in which the first respondent uses its mark, there may not be an arguable case under s 120(1), where the applicant has to show that the impugned use is in relation to the same services in respect of which the applicant's mark is registered. There is no evidence that the first respondent's use is in respect of insurance services in the ordinary sense of that term. 24 However, a service of the kind offered by the first respondent and described above is, arguably, a service of the same description as that of the services in respect of which the applicant's mark is registered and thus within s 120(2)(c). The assessment of the quality of repairs to insured motor vehicles is a field of activity intimately connected with, and part of that, of motor insurance itself. The quality of repairs bears on the discharge by the insurer of its contractual obligations to the vehicle owner. There is evidence that in the ordinary course of its business the applicant has suitably qualified tradespeople employed by it to inspect repaired vehicles. This occurs either at the request of the owner, when the owner has collected the vehicle direct from the repairer, or as a matter of routine by the applicant when the vehicle has been returned by the repairer to one of the applicant's customer service centres. This would seem to be a natural part of the service provided by a motor insurer. Bearing in mind that the expression "services of the same description" ought not to be given too restrictive a construction (see MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 at 243-244), I think the applicant has raised a triable issue on this point. 25 The question then is whether there is a triable issue that the first respondent's use "is not likely to deceive or cause confusion", the onus being on it. 26 Before turning to that issue, I note that in any event, even if there were no arguable case on s 120(2)(c), it is plainly arguable that the applicant's AAMI mark is "well known in Australia" within the meaning of s 120(3). Under this provision a user of a substantially identical or deceptively similar mark will infringe if its sign would be likely to be taken as indicating a connection between the unrelated services and the registered owner of the trade mark: see Lone Star Steakhouse & Saloon Inc v Zurcas (200) 48 IPR 325 at [18], San Remo Macaroni Company Pty Ltd v San Remo Gourmet Coffee Pty Ltd (2000) 50 IPR 321 at [38] - [39]. 27 On the issue of deception or confusion, the first respondent relied on what was said to be the different pronunciation adopted in its business. A compact disk was tendered which records the answering message on the first respondent's telephone. The acronym AAMIC is pronounced with a short "a", as in "hammock", whereas the applicant's acronym is pronounced as though it were the name "Amy". Indeed, as already noted the applicant's advertising often features a young woman with the telephone and the jingle "Lucky you're with Amy", suggesting that the name of the character is Amy and reinforcing the impression that in the spoken word the mark can be pronounced "Amy" and not necessarily by the repetition of the letters. 28 However the visual similarity of the two marks remains, in my opinion, highly significant and something which is arguably likely to cause confusion. And of course the first respondent has no control over the pronunciation which might be adopted by members of the public. 29 There was evidence of some actual confusion, notwithstanding the short period of time that the first respondent has been in business. On 4 September a courier delivered a parcel to some premises of the applicant which are also in Keys Road, Moorabbin. That parcel was intended for delivery to the first respondent's premises. On 5 September, a Mrs Rita Gervasi telephoned the applicant's premises and asked to speak with a named person who is the manager of the first respondent. There was some conflicting evidence as to Mrs Gervasi's reason for telephoning but it does seem that she did telephone the applicant when in fact she wanted to reach the first respondent. 30 However, what is much more significant in my opinion is the application of the well-known principle stated by Dixon and McTiernan JJ in Australian Woollen Mills Ltd v FS Walton and Co Ltd (1937) 58 CLR 641 at 657. Their Honours said: "The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive." 31 If one were to pick four letters at random, the chance of any one particular combination being chosen is 1 in 456,976, that is, 26 X 26 X 26 X 26. Further, there is the circumstance here that the first respondent's name contains a tautology, the words "automotive" and "motor" meaning virtually the same thing. There is no obvious reason for the choice of the superfluous word "motor" if the aim is merely to convey the nature of the company's business. Of course there would be a reason if one wanted a multiple word name with an acronym which would bring some perceived benefit. 32 I have been asked to accept that it is a coincidence that the choice by the first respondent of a name for a business connected with the repair of insured motor vehicles produced an acronym, the first four letters of which just happened to be the same as those of the mark of a well-known motor insurer. Judges are sometimes thought to be rather unworldly. Even so, I am not prepared to accept that pure chance operated in the way suggested. There is an arguable, albeit at the moment circumstantial, case that the first respondent's name and resultant acronym were deliberately chosen so as to lead consumers to think that the first respondent's business was, or might be, connected with that of the applicant. 33 For similar reasons, I am satisfied that there are serious issues to be tried as to the claims that the first respondent engaged in misleading and deceptive conduct contrary to s 52 of the Trade Practices Act, represented that its services have sponsorship or approval that they do not have (s 53(c) of that Act) and that it had sponsorship, approval or affiliation it does not have (s 53(d)). There is also a triable issue as to passing off. 34 Counsel for the respondents argued that there was no evidence of damage. However, where damage to, or interference with the reputation and goodwill in a product or service is claimed, damages are usually not an adequate remedy given the difficulty of measuring such damages in monetary terms: Parfums Christian Dior (Australia) Pty Ltd v Dimmeys Stores Pty Ltd (1997) 39 IPR 349 at 354-5. Section 126 of the Trade Marks Act specifically provides for the grant of injunction. Injuries to intellectual property are particularly apt for protection by injunction. In Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (4th ed, 2002) at 729 it is said that the Court of Chancery had a longstanding jurisdiction to enjoin infringement of patents and copyrights and that a plaintiff became entitled to an injunction prima facie if he proved infringement of his patent or copyright. The learned authors note the introduction of the statutory system for the registration of trade marks commencing in the United Kingdom in 1875 and it is implicit in their treatment of the subject that a similar approach has been adopted in cases of infringement of this form of intellectual property. The learned authors however incorrectly state (at 730) that registration is available only for marks used in relation to goods and that service marks cannot be registered. They must be unaware of the passing of the Trade Marks Amendment Act 1978 (Cth); see F J Smith "The Trade Marks Amendment Act 1978" (1979) 53 ALJ 118. 35 The balance of convenience clearly favours the grant of an injunction. As mentioned, the first respondent has only been in business for a matter of a few weeks. It has incurred some expense in its signage and no doubt other things like stationery. There was vague and unsatisfactory evidence to this. At best the cost of changing was put at $80,000, although this amount was not itemised in any way. But even so, such costs as there are would be readily ascertainable and covered by the undertaking as to damages. 36 Counsel for the respondents argued that the applicant does not come to the Court with clean hands and that a court of equity will not aid a man to derive advantage from his own wrong. Counsel cited Meyers v Casey (1913) 17 CLR 90. Specifically it was said that the applicant had found it offensive that the first respondent's conduct in the marketplace was finding genuine fault with repairs authorized by the applicant. It was alleged that this had occurred in the case of five vehicles. The applicant's motive in seeking an injunction was said to be "to end the use of the first respondent's use of a name which clearly describes the nature of its activity as being an industry watchdog". 37 However Meyers v Casey itself makes it clear that misconduct relied on to defeat an equitable claim must have "an immediate and necessary relation to the equity sued for": per Isaacs J at 124 citing Eyre LCB in Dering v Earl of Winchelsea (1787) 1 Cox 318 at 319, 29 ER 1184 at 1185; see also per Barton ACJ at 101-102. The present case is not one where, in the words of Isaacs J, the right relied on, and which the Court is being asked to protect, is itself to some extent brought into existence by some illegal or unconscionable conduct of the applicant, so that protection for what it claims involves protection for its own wrong. The applicant seeks protection of the rights conferred on it by the Trade Marks Act in respect of its registered marks, the validity of which is not in question. Moreover, the first respondent will be free to carry out its activity as an "industry watchdog" under any name it choses, as long as it does not interfere with the rights of the applicant. 38 Upon the applicant undertaking by its counsel to pay to any party adversely affected by the undermentioned order such compensation, if any, as the Court thinks just in such manner as the Court directs, it is ordered: 1. Until the final hearing of this proceeding or further order, the first and second respondents or either of them, whether by themselves, their directors, servants, employees or agents, or howsoever, otherwise be restrained from: (a) using the word, letter, sign or acronym "AAMIC" in the course of business conducted by it for the advertising, promotion, offer for sale and supply of services relating to the inspection, assessment and repair of motor vehicles; and (b) publishing, disseminating or causing to be published or disseminated, reproducing or causing to be reproduced in any material form the advertisement or any similar advertisement, a copy of which is exhibit JM1 to the affidavit of James Merchant sworn 24 September 2003 and filed in this proceeding. 2. Within 7 days of the date of this order the respondents take all necessary steps to effect the alteration of: (a) the Telstra White Pages telephone listing for "AAMIC" and (b) the registration of the business name "AAMIC" with the Victorian Office of Business Affairs (registration No B1696292X) such that neither of them utilise the acronym "AAMIC". 3. There be liberty to apply. 4. The costs of the parties of and associated with the application for interlocutory injunction be reserved. I certify that the preceding thirty eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 9 October 2003 Counsel for the Applicant: M W Wise Solicitor for the Applicant: Middletons Counsel for the Respondents: J J Isles Solicitor for the Respondents: Isaac Brott & Co Date of Hearing: 2 October 2003 Date of Judgment: 2 October 2003