FEDERAL COURT OF AUSTRALIA Frucor Beverages Limited v The Coca-Cola Company [2017] FCA 298 Appeal from: The Coca-Cola Company v Frucor Beverages Limited [2016] ATMO 38 File number: NSD 1112 of 2016 Judge: YATES J Date of judgment: 24 March 2017 Catchwords: TRADE MARKS – application for advance rulings on the admissibility of evidence under s 192A(a) of the Evidence Act 1995 (Cth) Legislation: Evidence Act 1995 (Cth) s 192A(a), s 55(1), s 56, s 57(1), s 135 Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) Trade Marks Act 1995 (Cth) s 41(6)(a) Cases cited: Apple Inc v Registrar of Trade Marks (2014) 227 FCR 511; [2014] FCA 1304 Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50; [1998] FCA 440 Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60; [2009] FCA 891 Optical 88 Ltd v Optical 88 Pty Ltd (No 2) (2010) 275 ALR 526; [2010] FCA 1380 Societe Des Produits Nestle SA v Unilever plc [2003] RPC 35 Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97; [2006] FCAFC 132 Date of hearing: 2 March 2017 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Trade Marks Category: Catchwords Number of paragraphs: 33 Counsel for the Appellant: Mr M Darke SC with Ms C Bembrick Solicitor for the Appellant: Clayton Utz Counsel for the Respondent: Ms C Amato Solicitor for the Respondent: Phillips Ormonde Fitzpatrick Lawyers ORDERS NSD 1112 of 2016 BETWEEN: FRUCOR BEVERAGES LIMITED Appellant AND: THE COCA-COLA COMPANY Respondent JUDGE: YATES J DATE OF ORDER: 24 MARCH 2017 THE COURT ORDERS THAT: 1. The respondent's interlocutory application dated 22 February 2017 (the interlocutory application) be dismissed. 2. The respondent pay the appellant's costs of and incidental to the interlocutory application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT YATES J: Introduction 1 The respondent, The Coca-Cola Company Limited (CCC), seeks advance rulings, pursuant to s 192A(a) of the Evidence Act 1995 (Cth) (the Evidence Act), on the admissibility of two affidavits that will be read by the appellant, Frucor Beverages Limited (Frucor), in an appeal from a decision of the Registrar of Trade Marks (the Registrar) in opposition proceedings concerning Trade Mark Application No. 1496541 (the opposed application). The Registrar upheld CCC's opposition and refused to register the opposed mark. 2 The opposed mark is a colour mark that is sought to be registered for energy drinks in Class 32 (the designated goods). The opposed application contains the following endorsement: The mark consists of the colour green (Pantone 376C), as shown in the representation attached to the application, applied as the predominant colour to the goods, their packaging or labels. 3 One issue in this appeal is whether the Registrar erred in finding that Frucor had not established the requirement of s 41(6)(a) of the Trade Marks Act 1995 (Cth) (the Trade Marks Act) in the form that provision took prior to the amendments introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). In that form, s 41(6) provided: If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply: (a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant – the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons; (b) in any other case – the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons. 4 The operation of s 41 of the Trade Marks Act, in its relevant form, is discussed most notably in Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50; [1998] FCA 440; see also Apple Inc v Registrar of Trade Marks (2014) 227 FCR 511; [2014] FCA 1304 (Apple). 5 The point of present significance is that the Registrar was not satisfied that, because of the extent to which Frucor had used the opposed mark before the filing date of the opposed application (15 June 2012), the opposed mark distinguished the designated goods as Frucor's goods. Thus, one question to be decided in the appeal, which will be a hearing de novo, is the so-called factual distinctiveness of the opposed mark immediately before 15 June 2012. The challenged affidavits 6 The two affidavits on which advance rulings are sought were made by Garreth John Chandler on 30 November 2016 and 20 February 2017. They concern, substantially, two surveys carried out by Evolve Research and Consulting (ERC). ERC is described in the affidavits as a professional services and market research company. Mr Chandler is the managing director of the company. The surveys were carried out in January 2015 and January 2016, after the date on which the question of factual distinctiveness will fall to be determined. 7 In his first affidavit, Mr Chandler says that each survey was designed by him to understand the level of identification amongst energy drink users between (a) the colour Pantone 376C, and (b) Frucor's energy drink, which is a drink called "V" (Frucor's energy drink). More specifically, Mr Chandler says that: the first survey, conducted in January 2015, was designed to assess the association between Pantone 376C and Frucor's energy drink in respect of "general drinks" (ie, without directing the subjects' attention to energy drinks specifically); and the second survey, conducted in January 2016, was designed to assess the association between Pantone 376C and Frucor's energy drink at an "energy drinks" category level. 8 Mr Chandler expresses the opinion that the results of both surveys demonstrate a high level of identification between Pantone 376C and Frucor's energy drink. Mr Chandler also expresses the opinion that, based on the results of the surveys, Pantone 376C in fact distinguishes Frucor's energy drink in the minds of consumers from the energy drinks of other traders. 9 In his first affidavit, Mr Chandler expresses the further opinion that the findings of the two surveys are "applicable well before the survey date". This opinion is developed in Mr Chandler's second affidavit, where he says that the results of the surveys, in particular those results which show the level of identification between Pantone 376C and Frucor's energy drink, are not likely to differ materially from the results which would have been obtained had the surveys been conducted on or around 15 June 2012. Speaking with respect to that date, Mr Chandler says: There is nothing to suggest a similarly constituted sample population of consumers would have had, on average, different, or specifically lower, levels of identification between Pantone 376C and [Frucor's energy drink]. 10 These opinions are expressed to be based, in part, on "associative memory effects" discussed by Mr Chandler in his first affidavit, and on certain assumptions Mr Chandler was asked to make for the purposes of his second affidavit. They are also based, in part, on Mr Chandler's opinion that, in light of his experience in conducting surveys of the same kind over many years, the level of identification of Pantone 376C with Frucor's energy drink recorded for consumers who have been purchasers of the product for more than three years is likely to be the "ceiling" for average identification amongst consumers. Mr Chandler says: … it is my experience that after an extended period of consistently strong branding (through advertising and sales) consumers' level of brand recall and identification with a brand (including the association of colour with a brand) tends to stabilise. Another way to say this is that a point is reached where there is a natural plateau such that increased duration of sales or advertising will not increase identification beyond this point on average amongst consumers. Given what I understand of the sales and advertising of [Frucor's energy drink], this point would have been reached well before 2012 and certainly before 2015. 11 Mr Chandler also says that: … there is nothing that suggests to me that the level of identification would be higher in January 2016 for a consumer who had been purchasing energy drinks for a specified period of time than for a consumer who had been purchasing energy drinks for that same period of time prior to June 2012. 12 Frucor submits that Mr Chandler's evidence goes to two facts in issue. The first is whether Frucor used, as a trade mark, Pantone 376C as the predominant colour of its energy drink's packaging and labels before 15 June 2012. Assuming an affirmative answer to that question, Frucor says that the second fact in issue is whether, because of the extent to which Frucor did use Pantone 376C, that colour in fact distinguished energy drinks as at 15 June 2012 as being Frucor's. 13 CCC seeks advance rulings that: Mr Chandler's affidavits should be rejected for lack of relevance; or alternatively Mr Chandler's affidavits should be excluded under s 135 of the Evidence Act because their probative value is substantially outweighed by the danger that the evidence given by them might cause or result in undue waste of time or be unfairly prejudicial to CCC. Legislation 14 Section 55(1) of the Evidence Act provides: The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding. 15 Section 56 of the Evidence Act provides: (1) Except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding. (2) Evidence that is not relevant in the proceeding is not admissible. 16 Section 57(1) of the Evidence Act provides: If the determination of the question whether evidence adduced by a party is relevant depends on the court making another finding (including a finding that the evidence is what the party claims it to be), the court may find that the evidence is relevant: (a) if it is reasonably open to make that finding; or (b) subject to further evidence being admitted at a later stage of the proceeding that will make it reasonably open to make that finding. CCC's contentions: relevance 17 In seeking a ruling that Mr Chandler's affidavits should be rejected for lack of relevance, CCC advances three contentions. 18 The first contention is that, taken at their highest, the surveys could only show a level of consumer association between Pantone 376C and Frucor's energy drink as at January 2015 and January 2016. CCC submitted that the Court has, in other cases, rejected, as fallacious, arguments that surveys conducted at a time considerably after the relevant date for assessing factual distinctiveness could be probative of that issue: Optical 88 Ltd v Optical 88 Pty Ltd (No 2) (2010) 275 ALR 526; [2010] FCA 1380 (Optical 88) at [396] and [410]-[415]; Apple at [223]. CCC submitted that the same argument should be rejected in the present case because there "are too many variables between 2012 and 2015/2016 for the survey results to be reliable". 19 The second contention is that the statistics produced by the surveys are "unremarkable". In aid of this submission, CCC canvassed certain results of the survey, with the aim of showing that the level of identification reported might not be as high as suggested in some charts and tables illustrating the survey results. 20 The third contention is that the surveys fail to show use of the opposed mark as a trade mark. CCC submitted that the surveys could only show the reported association between Pantone 376C and the Frucor's energy drink. As pointed out in Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97; [2006] FCAFC 132 (Woolworths), the mere fact of association does not satisfy the test of distinctiveness in s 41(6): see also in this connection Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60; [2009] FCA 891; Societe Des Produits Nestle SA v Unilever plc [2003] RPC 35 at 662; and Apple at [224]-[228]. 21 CCC submits: In the present case, the use of the prominent and distinctive "V" logo on the applicant's energy drink cans, packaging and promotional material is strongly suggestive that the colour green alone does not function as a badge of origin, if indeed it functions as a badge of origin at all. Indeed, given that the cans of variant flavours lemon, orange and sugar free V made very minimal use of the colour green but display the prominent "V" logo, it is far more likely that the "V" logo functions as the badge of origin. 22 CCC also relies on what it identifies as a disconnect between the stimulus used in the surveys – a single block of colour – and the opposed mark, described in the opposed application as Pantone 376C "applied as the predominant colour to the goods, their packaging or labels". Put shortly, CCC says that the surveys were not directed to the correct question and should, for that reason, be rejected. Consideration and conclusion: relevance 23 I am not persuaded that Mr Chandler's affidavits should be rejected on the ground of relevance. 24 As a preliminary matter, I should record that, although the focus of CCC's submissions was the two surveys discussed in those affidavits, Mr Chandler's first affidavit, in fact, deals with broader subject matter, including the nature of brands and the use of colours in retail marketing. In this part of his first affidavit, Mr Chandler discusses the associative theory of memory, which he uses as part of the reasoning for the opinions he expresses in the second affidavit. It was not suggested by CCC that this broader subject matter was not relevant or that Mr Chandler did not have the expertise to give such evidence. Thus, I would not make the blanket ruling that CCC seeks in any event. 25 With specific reference to those parts of Mr Chandler's affidavits dealing with the results of the two surveys, and the conclusions that can be drawn from them, it should be noted that in both Optical 88 and Apple, the evidence of the surveys had not been rejected, even though their probative value was criticised because the surveys were conducted after the relevant date. For the purpose of ruling on relevance, I do not think that Mr Chandler's first affidavit can be considered in isolation from his second affidavit, which seeks to tie the results of the surveys to the relevant time (15 June 2012) for the reasons given by Mr Chandler. This feature was not present in the evidence referred to in Optical 88 or in Apple. With respect to Woolworths, CCC pointed to some passages in the Full Court's reasons which, it said, indicated that the Full Court considered that the survey evidence in that case should have been rejected. I am not persuaded that that is the purport of the passages relied on. In Woolworths, the Full Court found that the primary judge had erred in the way he had used the survey evidence, not that the evidence was inadmissible. At [110], the Full Court noted that there had been a challenge to admissibility. However, in the course of argument on the appeal, the appellant (Woolworths), who had made that challenge, conceded that, whatever probative force the survey had, it could be understood as relevant to the filing dates of the trade mark applications in issue in that case. 26 Another matter of significance is that fact that, in assessing relevance, s 55(1) of the Evidence Act requires the Court to proceed on the footing that the evidence is to be accepted. On that footing, and reading Mr Chandler's first affidavit with his second, I am unable to see why the results of the two surveys, and Mr Chandler's opinions as to the conclusions to be drawn from them, are not relevant, in terms of s 55, or at least provisionally relevant under s 57 of the Evidence Act. It is true that, in expressing the opinions in his second affidavit, Mr Chandler has proceeded on the basis of a number of assumptions concerning Frucor's use of Pantone 376C in the 13 year period from 1999 to June 2012, including assumptions about Frucor's advertising spend and the number of units of its energy drink that were sold. But the present ruling is sought against the background that other affidavit evidence has been filed, and will be read, by Frucor concerning its use of Pantone 376C in that period, and the manner and extent to which Frucor has marketed and sold its energy drink apparently using that colour. This intended evidence is said to provide the factual foundation for the assumptions Mr Chandler has been asked to make. 27 In coming to my conclusion on relevance, I do not leave out of consideration the various criticisms of the surveys that CCC has advanced. Some of these criticisms were made with reference to observations by the Full Court in Woolworths. I do not think, however, that these criticisms rise so high that I could safely conclude, on the material presently before me, that Mr Chandler's affidavits, on this topic, should be rejected at the outset as lacking relevance on the basis that, as CCC contends, the surveys should be given no weight at all. 28 I am also conscious of the difference between evidence of association and the conclusions that can be drawn on trade mark use, as discussed in the cases to which I have referred. Bearing in mind that difference, it does not seem to me that, if I were to be persuaded at the hearing of the appeal that the surveys do not establish trade mark use of the colour in question (as CCC contends), it would necessarily follow that Mr Chandler's intended evidence would be rejected on the ground that it is not relevant. This is because, as I have said, there will be other evidence before me concerning the appellant's marketing and sales in the 13 year period prior to 15 June 2012. If, in the event, the surveys be taken no higher than establishing an association between Pantone 376C and Frucor's energy drink, that evidence, nevertheless, would need to be considered in light of the other evidence that Frucor will lead, including the evidence of its historical sales and marketing. This other evidence could well lead to a finding, on the balance of probabilities, that, as at 15 June 2012, Frucor had used Pantone 376C as a trade mark in respect of its energy drink. Considered in that context, the surveys may well be relevant to the issue of whether, at that time, Pantone 376C in fact distinguished Frucor's energy drink from the energy drinks of other traders. Of course, at the present time I have no view as to whether any such finding should be made. The point of present significance is that I should proceed cautiously before concluding that, in advance of the hearing, when all of Frucor's evidence will be before the Court, some part of that evidence should be rejected now as lacking relevance. 29 For completeness, I would add that CCC's submission that the survey results are "unremarkable" does not stand as a reason to reject Mr Chandler's affidavits on the grounds of relevance. What is to be drawn from the surveys is a matter of contention between the parties. It does not go to the question of admissibility presently before me. The test under s 55(1) of the Evidence Act is whether Mr Chandler's affidavits could rationally affect the assessment of the probability of the existence of the identified facts in issue. The unstated assumption in CCC's submission is that there is some pre-existing, objectively ascertained level of consumer identification that, when reached, triggers the application of s 41(6) in favour of a trade mark applicant. There is no such trigger. Here, the question is whether the opposed mark was factually distinctive of Frucor's goods at the filing date of the opposed application. That question is plainly one of fact and necessarily involves the evaluative judgment of the Court based on all the evidence. Discretionary rejection 30 With respect to the question of discretionary rejection under s 135 of the Evidence Act, it would be necessary for me to be satisfied, at the present time, that the probative value of the intended evidence is outweighed by the dangers referred to in paragraphs (a) and (c) of that provision. In this connection, s 135 provides: The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party; or … (c) cause or result in undue waste of time. 31 I do not have this level of satisfaction. It may be that, on the hearing of the appeal, I do not accept Mr Chandler's evidence or the results of the surveys, in whole or in part. But I am not persuaded that Mr Chandler's affidavits are so lacking in probative value that their reception into evidence would cause or result in an undue waste of time. Nor am I satisfied that their reception into evidence would be unfairly prejudicial to CCC. Disposition 32 For these reasons, I decline to make the advance rulings that are sought. Frucor has submitted that absent one or other of the rulings that CCC seeks, I should rule that Mr Chandler's affidavits are admissible. That outcome does not follow. CCC has sought rulings on particular bases. It has not sought to address all aspects of the admissibility of the affidavits. 33 The appropriate course is that I simply dismiss CCC's interlocutory application dated 22 February 2017. Costs should follow the event, such that CCC should pay Frucor's costs of and incidental to the interlocutory application. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 24 March 2017