PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128 (“Grasshopper”)

Authors: Zeinab Farhat & Gianluca Pecora, Progressive Legal

The decision in Grasshopper is a reminder that despite the statutory scheme of intellectual property legislation in Australia such as the Copyright Act 1968 (Cth) and Patents Act 1990 (Cth), the Trade Marks Act 1995 (Cth) (‘the Act”) does not permit provision for liability for authorisation infringement; except in situations of joint tortfeasorship which was not alleged in this appeal.    

Facts and procedural history 

In February 2005, Ralph Valentine (“Mr Valentine”) applied for to obtain registration for the mark “Wicked” as a trade mark over his product, being tubs of strawberries with chocolate dipping sauce.  

The trade mark included the stylised form of the word “Wicked” which included a devil’s tail on the letter “D” (“Wicked Tail Mark“):

Over time, various corporate entities run under the control of Mr Valentine owned and used the Wicked Tail Mark. Mr Valentine was responsible for the following entities: 

1. Wicked Products Pty Ltd; 
2. Brisbane Market Brokers Pty Ltd (“BMB”); and  
3. Grasshopper Ventures Pty Ltd (“the Respondent”).

(Together, “the Valentine Companies“)

The Respondent was the owner of the Wicked Tail Mark and was also the IP holding company in the Valentine Companies.  

From late 2014, the Wicked Tail Mark was changed to a new form (the “New Wicked Mark”) and the Respondent applied to register this mark: 

PDP Fine Foods Pty Ltd owned a trade mark for the stylised word “Wicked Sister Fine Foods” (“First WS Device Mark”):

The goods being sold by PDP Capital Pty Ltd and PDP Fine Foods Pty Ltd under this Mark include olives, dairy desserts, rice puddings and dipping sauces. 

PDP Capital Pty Ltd was also the owner of two other trade marks, being the stylised “Wicked Sister Fine Foods” Mark (“Second WS Device Mark”): 

This covered dipping sauces and the words “Wicked Sister” (“WS Word Mark”) which covered the same goods description as the Second WS Device Mark.  

PDP Capital Pty Ltd commenced proceedings against Grasshopper Ventures for infringement of the First and Second Device Marks, and the WS Word Mark by reason of the Respondent’s use of the New Wicked Mark.  

The primary judge dismissed the trade mark infringement claim under section 120 of the Act, on various grounds which are the subject of appeal.

PDP appealed the decision of the primary judge.  

Issues

The Court considered various issues in determining whether to overturn the primary judge’s decision, including:

1. whether the Respondent’s authorisation of the New Wicked Mark by other companies, is capable of constituting trade mark infringement under section 120 of the Act; and
2. whether the sale of the Infringing Products amounted to an infringement of the Wicked Sister Marks, by reason of the New Wicked Mark being substantially identical or deceptively similar to those marks.

The Court also considered other issues such as PDP’s non-use application in relation to the Wicked Tail Mark, ACL claims and passing off.

However, this case summary will focus primarily on Grounds 1 and 2 of the appeal.

Decision

The Court held the following: 

1. Ground 1 and 2 of the appeal failed;  
2. Ground 4 of the appeal relating to PDP’s non-use application in relation to the Wicked Tail Mark succeeded; 
3. Ground 5 of the appeal relating to the removal of the later registered WS Marks failed; and 
4. Ground 6 of the appeal relating to the finding of the primary judge that the Respondent’s conduct did not amount to a breach of the ACL and passing off, also failed.  

Reasoning

Ground 1: Whether the Respondent’s authorisation of the New Wicked Mark by other companies, is capable of constituting trade mark infringement under section 120 of the Act.

In relation to the question posed by Ground 1 of the appeal, the Court held dismissed this ground of appeal, noting inter alia:  

It was PDP’s position, that the Respondent should have been taken to have engaged in infringement by authorising one or more of the Valentine Companies to make and apply the New Wicked Mark to various products at [41].

The Court accepted the primary judge’s rejection of this argument for the following reasons, namely: 

PDP submitted that section 7(3) of the Act is constructed in a manner such that “authorised use” is taken to be use of the trade mark by the owner of the trade mark, and thus, use by a person under section 120 includes authorised use as per the meaning prescribed by section 7(3) and 8 of the Act.  

In response, the Court noted the following: 

section 120 of the Act is constructed in a manner such that “it is the act of the person” that attracts a finding of infringement. The language does not suggest use by one person will constitute an infringement by another person” at [65]; 

the construction of section also refers to use “as a trade mark”, but not to “authorised use”, leaving ambiguity regarding its interpretation alongside section 7(3) and 8 of the Act at [67]; 

the statutory interpretation of section 7(3) and 8, does not suggest it was the intention of the legislature to permit provision for authorisation infringement at [71]; and 

the submission by PDP that these provisions are analogous to the authorisation for infringement sections of the Copyright Act 1968 (Cth) and Patents Act 1990 (Cth) was rejected at [72]-[74].  

GROUND 2: Whether the sale of the Infringing Products amounted to an infringement of the Wicked Sister Marks, by reason of the New Wicked Mark being substantially identical or deceptively similar to those marks.

The Court dismissed this ground of appeal for the following reasons, namely: 

PDP focused its submission on its view that the primary judge erred in finding that the New Wicked Mark was not substantially identical or deceptively similar to the WS Device Marks, and cited six errors (outlined at [78]); 

the primary judge posed the following question: “whether there is a real, tangible danger or confusion by reason of the use of the New Wicked Mark, having regard to the imperfect recollection of the notional consumer, taking into account all of the surrounding circumstances [165]”. It was held at first instance that the New Wicked Mark, and the WS Device Marks were not visually and aurally similar. In reaching that conclusion, the primary judge cited several differences such as the fact the WS Device Marks contained four words, and the New Wicked Mark contained one; 

in relation to the issue of ascertaining deceptive similarity, the Court further noted:   

“the distinction between consideration of whether one mark is deceptively similar to another, rather than substantially identical, lies in the point of emphasis on the impression or recollection which is carried away and retained of the registered mark, when conducting the comparison. In this context, allowance must be made for the human frailty of imperfect recollection” at [97]; and 

“it is important to bear steadily in mind that the issue under section 120 is not whether the alleged infringer’s conduct is deceptive or confusing, but whether the alleged infringer’s trade mark is deceptively similar to the registered trade mark. Beyond having a general bearing on the habits and practices of consumers, more granular detail of actual trade circumstances of either parties’ conduct is not relevant to the inquiry” at [111].  

Ultimately, the Court accepted the primary judge’s approach to ascertaining deceptive similarity pursuant to section 120 of the Act.  

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