Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235

Trade marks – infringement – whether goods fall within registered class – own name defence – “right to register” defence – whether sufficiently distinctive

As his Honour Justice Beach observes, “How to preserve cheese and other foodstuff has challenged indigenous Mediterraneans for millennia”. The applicant (FSAPI) and the first respondent (FAPL) both sell plastic packaging films directed at solving such (and, the authors assume, related) problems. FSAPI’s products have been distributed and sold extensively in Australia under the mark FLEXOPACK since 1995, and in March 2008 FSAPI obtained a trade mark registration in respect of that mark, for “thermoplastic polymers (for packaging)”.

FAPL entered the Australian market in 2010, and it too markets its products under the mark FLEXOPACK AUSTRALIA and FLEXOPACK, including through a website at www.flexopack.com.au. Perhaps unsurprisingly, upon becoming aware of FSAPI’s (more modest) activities in the Australian market FSAPI made demands that FAPL cease use of the mark in suit, and upon FAPL’s refusal to do so initiated proceedings for trade mark infringement, misleading and deceptive conduct, and passing off.

On the trade mark front, substantial identity and deceptive similarity were not in serious issue. FAPL sought to suggest that its products fell outside the scope of “thermoplastic polymers (for packaging), but his Honour found that FAPL’s “multilayer films” fell within that definition, and found “surprising” FAPL’s suggestion that the Court ought not use the Nice Classification as extrinsic material to assist in that inquiry. Even if FAPL’s products were not the same as those for which the mark in suit was registered for the purposes of section 120(1) of the Trade Marks Act 1995 (Cth), his Honour held that they were “goods of the same description” within the meaning of section 120(2). A counterclaim by FAPL seeking removal of the mark in suit for non-use under section 92(4)(b), based on a similar contention that FSAPI’s products fell outside the goods in respect of which the mark was registered, was unsuccessful for much the same reason.

FAPL sought to invoke the “own name” defence afforded by section 122(1)(a), which places an onus on a defendant to demonstrate good faith use. FAPL failed to discharge that onus. The evidence of FAPL’s sole director and shareholder (the second respondent, Mr Katelis) as to FAPL’s selection of its company name and his professed ignorance of FSAPI and its products were treated with significant scepticism by the Court, not least of all because FAPL’s website at relevant times had featured images lifted from FSAPI’s website. But leaving the unreliability of Mr Katelis’ evidence aside, his Honour found that as a minimum FAPL had failed to “make all reasonable inquiries that an honest and reasonable person would have made” when selecting its corporate name, such that good faith could not be made out. Further, in respect of FAPL’s domain name and other uses of FLEXOPACK without “AUSTRALIA”, the defence was not available at all, because abbreviations that increase the likelihood of confusion fall outside of the defence.

FAPL also sought to invoke the “right to register” defence under section 122(1)(fa), to the effect that no infringement occurs if the Court is of the view that the defendant would obtain registration of an otherwise infringing mark if the defendant were to apply for it. In this case, FAPL faced the additional obstacle of section 44(1) and FSAPI’s registered mark; to get around that issue, FAPL sought to rely on section 44(3) and the Registrar’s discretion thereunder to allow registration of an otherwise substantially identical or deceptively similar mark where there has been honest concurrent use. His Honour found that section 44(3) would not overcome the problem, because (for reasons already canvassed) FAPL had not demonstrated honest adoption of the offending mark. Even if that were not the case, the relative lack of concurrent use by FAPL and the degree of overlap between the parties’ respective areas of operation (and therefore the confusion and inconvenience that concurrent registrations would likely occasion) meant that the discretion would not be exercised in FAPL’s favour. Further, other grounds for objection identified by FSAPI, namely section 42(b) (use contrary to law, in this case the Australian Consumer Law) and section 60 (confusion or deception likely because of the reputation within Australia enjoyed by a prior mark) would vitiate the section 122(1)(fa) defence.

Finally, FAPL sought removal of the mark in suit under section 88 on the basis that it was insufficiently distinctive for the purposes of section 41 (as it stood in 2008) to have been granted registration. In particular, FAPL argued that “FLEXOPACK” was not capable of distinguishing “flexible packaging” products. FAPL led some evidence of industry use of “flexo” in the context of packaging (primarily in relative to flexographic printing, rather than flexible packaging), but FSAPI’s evidence was found to be more probative by his Honour, and led to the conclusion that FLEXOPACK was and invented word, not descriptive of any product and inherently adapted to distinguish. Justice Beach rejected FAPL’s “atomistic approach” and found a “disassembled explication” to be “artificial”. While the authors note that minds might differ as to whether “flexopack” is inherently distinctive, even if that were not the case, by March 2008 his Honour found that there had been sufficient use and promotion of FLEXOPACK in Australia such that it was capable of distinguishing, within the meaning of section 41(5) (as it then stood).

As to the balance of FSAPI’s claims, it also made out its case against the FAPL in relation to contraventions of the Australian Consumer Law and for passing off. Further, Mr Katelis was held to be knowingly concerned in the former conduct and a joint tortfeasor in the latter conduct.