Adidas AG v Pacific Brands Footwear Pty Ltd (No 2) [2013] FCA 396

FEDERAL COURT OF AUSTRALIA

Adidas AG v Pacific Brands Footwear Pty Ltd (No 2) [2013] FCA 396 Citation: Adidas AG v Pacific Brands Footwear Pty Ltd (No 2) [2013] FCA 396

Parties: ADIDAS AG and ADIDAS AUSTRALIA PTY LTD ACN 058 390 659 v PACIFIC BRANDS FOOTWEAR PTY LTD

File number: NSD 1368 of 2010

Judge: ROBERTSON J

Date of rulings: 3 May 2013

Catchwords: EVIDENCE – rulings on admissibility – relevance – general discretion to limit use of evidence

Legislation: Evidence Act 1995 (Cth) s 136 Trade Marks Act 1995 (Cth) s 120(1)

Cases cited: Global Brand Marketing Inc v YD Pty Ltd (2008) 76 IPR 161

Date of hearing: 18, 19, 22-24 and 26 April 2013

Date of last submissions: 30 April 2013

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 28

Counsel for the Applicants: Mr DK Catterns QC with Mr PW Flynn

Solicitor for the Applicants: King & Wood Mallesons

Counsel for the Respondent: Mr DB Studdy SC with Mr D Crennan

Solicitor for the Respondent: Griffith Hack Lawyers

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1368 of 2010

BETWEEN: ADIDAS AG

First Applicant

ADIDAS AUSTRALIA PTY LTD ACN 058 390 659

Second Applicant

AND: PACIFIC BRANDS FOOTWEAR PTY LTD

Respondent

JUDGE: ROBERTSON J DATE: 3 MAY 2013 PLACE: SYDNEY

REASONS FOR RULINGS 1 The substantive proceedings concern the applicants' trade marks as applied to footwear. The applicants contend that their three stripe trade marks have been infringed, within s 120(1) of the Trade Marks Act 1995 (Cth), by the respondent. 2 The two major issues in the proceedings are whether the respondent's shoes bear marks which are used as a trade mark and, if so, whether the various marks on the respondent's shoes are deceptively similar to the applicants' three stripe trade marks. The applicants referred, tendentiously, in submissions, to the respondent's various marks as the "4 stripe trade mark" and to the respondent's shoes as "4 stripe shoes". 3 These reasons deal with the parties' objections to affidavits and the inclusion of certain documents in the tender bundle, Exhibit X. I note that the evidence is closed and final submissions have been made. The parties did not ask me to make rulings in the usual way, that is, before oral evidence and before submissions. 4 The respondent's objections, as amended, went solely to the weight to be given to the applicants' evidence. No separate rulings are therefore required. 5 The applicants' objections were 23 in number. They fell into three groups. 6 The first group encompassed evidence dealing largely with the distinction, contended for by the respondent, between "performance shoes" and "commodity shoes", including material as to the different stores in which those two types of shoes were sold. The applicants submitted that the relevant comparison was between the mark of the registered owner and the mark of the alleged infringer. A wider enquiry of the kind that might be undertaken in a passing off action was not appropriate. In particular, it was submitted, it was not permissible to take into account matters such as advertising or marketing techniques of the particular respondents; price differentials; differences in the respective sections of the public to whom the goods were sold; or differences in the use by the parties of displays at the point of sale. The applicants submitted that the evidence dealing with the different stores in which the products were sold fell squarely within the prohibition on taking into account differences in the respective sections of the public to whom the goods were sold. These objections also encompassed evidence relating to the other trade marks which appeared on the "4 stripe shoes" and evidence as to what appeared on the shoeboxes in which the "4 stripe shoes" were sold. It was submitted that this was evidence as to matters external to the impugned mark, which was irrelevant to the deceptive similarity enquiry. 7 The applicants recognised that some of this evidence was inextricably linked in its form to evidence which may be "marginally" relevant to the broader contextual enquiry involved in determining whether there was "use as a trade mark" on commodity shoes as opposed to performance shoes. Accordingly an order was sought pursuant to s 136 of the Evidence Act 1995 (Cth) (s 136) to limit the use of the material to the "use as a trade mark" argument. Otherwise, it was submitted, there was a danger that this evidence would simply be used for all purposes, which would be both unfairly prejudicial to the applicants and misleading or confusing. It was submitted that the proposed limiting order provided clarity as to the purpose for which the evidence may be used. 8 The second group of applicants' objections encompassed evidence which was submitted to be irrelevant on the question of deceptive similarity for the reasons given in relation to the first group of objections. It was submitted that this evidence had no relevance to the issue of use as a trade mark. 9 The third group of applicants' objections related to the evidentiary use to which the shoe boxes containing the respondent's "4 stripe marks" or "4 stripe shoes" may be put. It was submitted that packaging was irrelevant to the deceptive similarity enquiry in this case, being a matter external to the marks and being merely a difference in the way the goods were presented at the point of sale, even though packaging may be relevant to the broader contextual enquiry associated with whether there was use as a trade mark. 10 Accordingly the applicants sought an order under s 136 to provide clarity that the boxes may not be used in the deceptive similarity inquiry, because in the absence of such an order there was a danger that the evidence would simply be used for all purposes, which would be both unfairly prejudicial to the applicants and misleading or confusing. 11 The setting for the competing contentions was the opposing submissions as to the correctness, or otherwise, of the judgment of Sundberg J in Global Brand Marketing Inc v YD Pty Ltd (2008) 76 IPR 161 at [99]. His Honour said, in giving a number of reasons for his finding that the applicants had not made out their claim that YD's shoes were deceptively similar to the SHAPE mark: [99] Finally, the context is all important. In the present case the risk of confusion is mitigated by the circumstances in which the products are bought and sold: • Purchasers of the shoes in suit are metro-shoppers. They are fashion conscious and discerning in their choices. They are likely to be well informed about the products before purchasing them. The steps involved in a purchase (see [26]) constitute a relatively lengthy process in the course of which a customer will become well informed about a product before making a purchase. • Metro-shoppers review product labels. Branding, labels and logos are important features to this class of consumer. Their purchasing habits are refined, and this lessens the chance of confusion. • YD's shoes are sold only in YD stores. The stores display YD's signage, and customers are well aware that they are in a YD store when purchasing an item. • The applicants' and YD's shoes are relatively expensive items compared with impulse products such as soft drinks and confectionary: compare Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at [41]. Purchasers of shoes generally tend to be discerning in their purchasing habits. • While it is not necessary for the applicants to lead evidence of actual deception (compare Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd (2004) 209 ALR 1; [2004] FCAFC 196 at [95]), it is relevant that there was no such evidence. [100] For the above reasons the applicants have not made out their claim that YD's shoes are deceptively similar to the SHAPE mark. 12 The applicants before me submitted that the considerations at [99] were "clearly wrong" and that I should not follow them. 13 In my opinion Sundberg J was dealing with the facts of that particular case. It does not seem to me that the word "context" has a precise legal meaning which should be considered apart from the facts of a particular case. In my view so much may be seen from his Honour's reference at [26]-[27] in that case to the class of consumer being described in the evidence as "metro-shoppers", being usually people with a "large amount of expendable income"; tending not to have dependants and to be "slaves of fashion". The evidence summarised by his Honour was that because metro-shoppers are conscious of fashion, they are discerning of labelling, logos and pricing and typically, when purchasing a pair of shoes, particularly expensive shoes, the customer takes several steps, which his Honour then set out. 14 Further, in my opinion, evidentiary rulings to be made during the course of the trial should not, in the ordinary case, be the vehicle for resolving questions as to whether what a judge of the Court has said in an earlier decision is "clearly wrong" so that it should not be followed. 15 Approaching the applicants' objections with these considerations in mind I make the following rulings. 16 I turn to the first group of objections. 17 As to the first five sentences of paragraph 9 of the affidavit of Colin Patrick O'Donnell sworn 23 March 2012, although there may be no sharp division between "performance shoes" on the one hand and "commodity shoes" on the other I would not exclude this evidence as irrelevant. In my view that issue may be associated with the question of the context which may be taken into account and it may thus be relevant to the assessment of deceptive similarity. 18 As to the first sentence of paragraph 10 of the affidavit of Colin Patrick O' Donnell, it is not irrelevant for a witness to say that stripes are a common form of decoration on commodity shoes. The applicants' case turns on deceptive similarity between the respective trade marks, assuming the markings on the respondent's shoes to be used as trade marks. It must follow, in my view, that it is relevant whether or not stripes are a common form of decoration on some of those shoes which are said to have the deceptively similar trade marks. 19 Paragraphs 38 to 54 and 57 to 90 of the affidavit of Dr Stanley Glaser affirmed on 2 April 2012 are not, in my opinion, irrelevant. Dr Glaser was called by the respondent as an expert witness on the questions of use of the respondent's symbols as a trade mark and whether the symbols would be perceived as deceptively similar to the applicants' trade marks. In these paragraphs, Dr Glaser explains his opinion on the first of those questions. Paragraphs 74 to 75 of that affidavit are in the same position. This evidence will be evaluated and given the appropriate weight in addressing the substantive questions in the proceedings. 20 In any event, I do not propose to make an order under s 136 as I am not persuaded, given the point at which the applicants have sought these rulings, that there is a danger that there is a particular use of the evidence which might be unfairly prejudicial to a party or be misleading or confusing. 21 I turn to the second group of the applicants' objections. 22 Because, in my opinion, context is substantially a question of fact rather than a principle of law, I admit from the start of the sixth sentence to the end of paragraph 9, the last sentence of paragraph 12 and paragraph 20 and the table appended to that paragraph of the affidavit of Colin Patrick O' Donnell sworn 23 March 2012. These sentences and paragraphs concern where the respondent's shoes are sold and their price points and retail prices. 23 Similarly, I admit from the fourth sentence of paragraph 11 to the end of paragraph 16 and exhibit GDR-4/Exhibit X tab 33 and paragraph 19 and exhibit GDR-6/Exhibit X tab 190 of the affidavit of Graeme David Russell affirmed 3 April 2012. 24 I admit paragraph 37 of the affidavit of Dr Glaser affirmed on 2 April 2012 as his general observations on the respondent's shoes which are now Exhibits C to N. 25 The affidavit of Phoebe Joan Connell sworn 3 April 2012 and the exhibits PJC-1 to PJC-5/Exhibit X at tabs 184-188 go to the issue of the respondent's trade mark registrations. They are not relevant to the deceptive similarity issue and I do not understand them to have been put by the respondent as relevant to that issue. 26 If the applicants seek an order under s 136 in respect of this evidence, again I will not make such an order and for the same reason as for the first group of objections. 27 As to the third group of the applicants' objections, the shoe boxes, I do not propose to exclude the shoe boxes because the evidence is that the shoes are sometimes displayed for retail sale in their boxes: see for example Exhibit X tab 190. 28 In addition, I do not propose to make an order under s 136 as I am not persuaded, given the point at which the applicants sought these rulings, that there is a danger that there is a particular use of the evidence which might be unfairly prejudicial to a party or be misleading or confusing. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Rulings herein of the Honourable Justice Robertson.