Campomar Sociedad Ltda v Nike International Ltd

• Jurisdiction: Australia Federal only
• Judge: Gleeson CJ,Gaudron,McHugh,Gummow,Kirby,Hayne,Callinan JJ
• Judgment Date: 09 March 2000
• Neutral Citation: [2000] HCA 12,2000-0309 HCA C
• Court: High Court
• Docket Number: S41/1999
• Date: 09 March 2000

Campomar Sociedad, Limitada & Anor

Appellants

and

Nike International Limited & Anor

Respondents

[2000] HCA 12

Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne AND Callinan JJ

S41/1999

HIGH COURT OF AUSTRALIA

Campomar Sociedad, Limitada v Nike International Limited

Trade Marks — ‘NIKE’ — Appellants and respondents registered identical trade marks in respect of different products — Appellants' use of mark likely to deceive or cause confusion — Appellants intended to take advantage of respondents' goodwill — Application to expunge appellants' trade marks.

Trade Marks — Whether s 28 of Trade Marks Act 1955 (Cth) has continuing or secondary operation — Interests to which protection under s 28 is directed — Whether s 28 prevents ‘dilution’ of trade mark — Whether s 28 accommodates prior or honest concurrent use — Whether appellants' trade marks had a reasonable probability of causing confusion — Issue to be considered prospectively at date of application for registration — Power to expunge mark from Register — Exercise of discretion on appeal — Limitation of goods for which trade mark registered.

Trade Practices — Misleading or deceptive conduct — Significance of ‘erroneous assumption’ — Nexus between conduct and misconceptions or deceptions — Effect upon ordinary or reasonable members of the class of prospective purchasers to whom conduct directed.

Words and Phrases — ‘likely to deceive or cause confusion’ — ‘wrongly made in the Register’ — ‘wrongly remaining in the Register’ — ‘blameworthy activities’ — ‘dilution’ — ‘probability of confusion’ — ‘misleading or deceptive conduct’ — ‘erroneous assumption’.

Trade Marks Act 1955 (Cth), ss 22, 28, 34, 53(2), 58, 61.

Trade Marks Act 1995 (Cth), ss 93, 96, 207, 233(1), 234, 250.

Trade Practices Act 1974 (Cth), ss 52, 80.

Gleeson CJ

The nature of the dispute

1 ‘Nike’ is not an invented word. In Greek mythology, Nike was the goddess of victory. TheOxford English Dictionary1 discloses that the term was also used to describe a range of surface to air guided missiles, developed by the United States from 1951.

2 On both sides in the present litigation, the term ‘NIKE’ has been adopted as a trade mark. On one side, that of the appellants, which are Spanish corporations, the trade mark is registered in respect of cosmetics and toiletries, particularly perfume, and on the other side, that of the respondents, whose headquarters are in the United States, the trade mark is registered and used for sporting footwear and clothing. There has been litigation between them in Hong Kong and in the United Kingdom with respect to subject-matter similar or substantially similar to that which arises for determination in the present appeals.

3 These appeals are concerned with the working out of the legal consequences in Australia of this double use of the name ‘NIKE’. This does not involve the operation of any tort of unfair competition. InMoorgate Tobacco Co Ltd v Philip Morris Ltd [No 2]2, this Court held that the existence of an action in unfair competition would be ‘inconsistent with the established limits of the traditional and statutory causes of action which are available to a trader in respect of damage caused or threatened by a competitor’. Indeed, as a general proposition, the law of torts values competitive conduct between traders to keep down prices and improve products3.

4 Here, neither side has marketed goods in Australia of the same description as the other. Nevertheless, the essence of the complaint of the United States concern is that the appellants, in putting their goods on the Australian market in 1993, had sought to ‘cash in on [the “NIKE”] reputation, which they [had] done nothing to establish’4. However, in Victoria Park Racing and Recreation Grounds Co Ltd v Taylor5,

Dixon J said that in ‘British jurisdictions’ courts of equity have not:

‘thrown the protection of an injunction around all the intangible elements of value, that is, value in exchange, which may flow from the exercise by an individual of his powers or resources whether in the organization of a business or undertaking or the use of ingenuity, knowledge, skill or labour. This is sufficiently evidenced by the history of the law of copyright and by the fact that the exclusive right to invention, trade marks, designs, trade name and reputation are dealt with in English law as special heads of protected interests and not under a wide generalization.’

This passage was approved by this Court inMoorgate Tobacco Co6 and should be regarded as an authoritative statement of contemporary Australian law.

5 On the other hand, the gist of the complaint of the appellants, the Spanish corporations, is that the United States concern seeks to ‘swamp’ their Australian registrations by exploiting a false belief — a belief built up by advertising and promotional expenditure that, in Australia, the only goods that are or will be marketed under the mark ‘NIKE’ are those of the respondents.

6 It is against that background that issues arise respecting the law of registered trade marks, principally under theTrade Marks Act 1955 (Cth) (‘the 1955 Act’), that of misleading or deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth) (‘the TP Act’) and the common law of passing-off. Questions also arise respecting the interrelationship between the two statutory regimes and between those regimes and the common law.

The parties and the course of the litigation

7 The appeals are brought from the Full Court of the Federal Court of Australia7. They were heard together, as they had been in the Full Court. By

majority (Sackville and Lehane JJ; Burchett J dissenting), the Full Court dismissed appeals against orders of a judge of that Court (Sheppard J)8.

8 The first appellant in the first appeal (No S41 of 1999) and the appellant in the second appeal (No S42 of 1999) is a Spanish corporation, Campomar Sociedad, Limitada (‘Campomar’). It was incorporated in 1964 and it was registered proprietor of two trade marks Nos A451283 and A585204 (‘the Campomar registrations’), each of which comprises the word ‘NIKE’. The orders made by Sheppard J included orders for rectification of the Register of Trade Marks by the expungement of the Campomar registrations. The second appellant in the first appeal, Nike Cosmetics SA (‘Nike Cosmetics’), is a related corporation. It was incorporated in 1989 to manufacture and sell ‘NIKE’ perfume products, under exclusive licence from Campomar.

9 The applicants in both matters were the present respondents, Nike International Limited (‘Nike International’) and Nike Australia Pty Ltd (‘Nike Australia’). Nike International was incorporated in Bermuda in 1980. It is a wholly owned subsidiary of Nike Inc. That company was incorporated in the United States, in the State of Oregon, in 1969 and is the parent company of Nike Australia.

10 By the time of the litigation, Nike International, or, perhaps more accurately, the Nike group of companies as an undifferentiated entity, had built up in Australia a significant reputation for the manufacture and distribution of athletic footwear and sports clothing distinguished by the ‘NIKE’ mark.

11 The Campomar registrations were effected under the 1955 Act. The first registration was in respect of ‘perfume products of all kinds and essential oils’, being goods in Class 39. Registration was applied for on 29 August 1986 and on

15 June 1989 the application was accepted for registration without opposition. The date of registration was deemed by s 53(2) of the 1955 Act to be the date of the lodging of the application10.

12 It may be noted that, in Spain, Campomar's predecessor in business had obtained a trade mark registration for ‘NIKE’ for perfumes and essences on 10 June 1940 and it had obtained registrations in other countries, including one in the United States with the priority date of 18 August 1964. In a number of countries, these registrations had expired in 1982 by reason of failure to renew them within time. However, in some 20 countries Campomar obtained new registrations with priority dates of 1 June 1984 in respect of perfume and essences or perfume products in general. The European countries involved included the Federal Republic of Germany, Austria, France, Italy and Switzerland. The trade mark the subject of all these registrations was ‘NIKE’.

13 In Australia, Campomar applied on 2 August 1992 for the registration of ‘NIKE’ for ‘[b]leaching preparations and other substances for laundry use; cleaning, polishing, scouring and abrasive preparations; soaps’, also being goods in Class 3. This application was accepted for registration, without opposition, on 6 January 1994. The date of this second Campomar registration is likewise deemed to be the date of the application, 2 August 1992.

14 On 29 August 1993, s 61 of the 1955 Act became applicable to the first Campomar registration. The effect of s 61(1) was that, after the expiration of seven years from 29 August 1986, the original registration was to be taken to be valid in all respects unless one or more of three matters was shown. The first (par (a)) was that the original registration was obtained by fraud; the second (par (b)) was that ‘the trade mark offends against the provisions of section 28’; and the third (par (c)) was that the trade mark was not, at the commencement of the proceedings in question, distinctive of the goods or services of the registered proprietor. Section 28 stated that a mark ‘shall not be registered as a trade mark’ if, among other things, its use ‘would be likely to deceive or cause confusion’.

15 On 28 April 1994, a proceeding was instituted in the Federal Court (No G241 of 1994) seeking, among other relief, the expungement of the first

Campomar registration. This led to the first appeal in this Court. Reliance was placed upon par (b) of s 61(1), that is to say upon...