The Full Court's decision in the Vagisil/Vagisan case makes it more difficult to discern the relative weight that ought to be given to the various elements of trade marks when assessing deceptive similarity, particularly the weight to be given to the central idea that the trade marks convey.
How do you know if marks are deceptively similar, particularly where they share descriptive elements? Is it their sound? Their visual appearance? Their ideas? All of the above? The Full Court's decision in Combe International Ltd v Dr August Wolff GmbH & Co. KG Arzneimittel  FCAFC 8 has created doubt about the weight that the "central idea" of a mark ought to be given when comparing marks when assessing their possible deceptive similarity.
The issue in dispute was whether VAGISAN and VAGISIL were too close. Dr Wolff sought to register VAGISAN for various personal care products, including soaps, cosmetics, pharmaceutical products and women's sanitary products for medical purposes among others. Combe International objected that VAGISAN was too close to its earlier VAGISIL registration. The Registrar of Trade Marks agreed on the basis of Combe International's actual reputation. On appeal, Justice Stewart disagreed, concluding:
- that use of VAGISAN would not lead to confusion because of VAGISIL's existing reputation (section 60 ground); and
- that VAGISAN was not sufficiently close to the earlier VAGISIL registration (section 44 ground).
Combe International appealed to the Full Federal Court where Justices McKerracher, Gleeson and Burley decided the appeal on the section 44 ground, holding that VAGISIL and VAGISAN were deceptively similar. They did not, therefore, need separately to consider the section 60 ground based on the actual reputation in VAGISIL.
Descriptive or distinctive?
A finding of fact concerning the contended deceptive similarity of two marks by a primary judge (such as that of Justice Stewart) can only be overturned if it was based on an error of law, that is, the primary judge approached the issue in the wrong way.
The Full Court held that Justice Stewart's approach was wrong. The Full Court said that the vices infecting his finding that VAGISIL and VAGISAN were not deceptively similar were:
- discounting the VAGI elements "in their entirety" because of their descriptive reference to vaginal products – the Full Court said there is no authority allowing such elements to be ignored but it is not certain that Justice Stewart in fact did so;
- finding that the idea conveyed by the VAGI prefix pointed to dissimilarity when in fact it pointed to similarity, given the close look and sound of the marks in question;
- conducting in effect a meticulous side by side comparison of the marks when the proper comparison is one based on imperfect recollection;
- failing to consider that VAGI as a descriptor applied only to some of the goods in question but, in any event, its application to "feminine hygiene" or "feminine healthcare" products would lead to consumer discomfort, so leading to imperfect recollection, because of hurried embarrassment in dealing with such products – Justice Stewart had rejected this evidence and argument as lacking credibility;
- not having regard to VAGI being the more emphatic part of the mark and giving too much emphasis to the suffixes SIL/IL and SAN/AN; and
- a range of other subsidiary considerations by which the Full Court distinguished various earlier authorities.
In the Full Court's view the average consumer might wonder whether products sold under the marks VAGISIL and VAGISAN came from the same manufacturer and this satisfied the test for deceptive similarity.
Does commonality of idea lead to similarity or dissimilarity?
Before Justice Stewart, there was "substantial agreement between the parties on the applicable principles" for comparison, with the parties differing only in "emphasis" and the outcome of the application of those principles.
The Full Court's conclusions appear to have turned on the significance of the idea conveyed by VAG or VAGI and Justice Stewart was held to have been wrong in his application of the following principle which he had correctly stated:
"where the common element of two marks is descriptive or of limited distinctiveness or in common use in the trade, it should be paid less attention, and greater weight must be given to the additional features of the marks in question…"
Justice Stewart's recitation of the authorities was nonetheless entirely orthodox and though some of the cases that he refers to are different from those of the Full Court (in each case supporting the outcome of the decision), the finding of deceptive similarity was open to Justice Stewart on the authorities he cited. If that is so, it must be queried whether the weight or "emphasis" given to various factors by Justice Stewart in fact warranted overturning him on a question of fact. The Full Court's decision gave considerable weight to the idea conveyed by the first four letters of each mark. This is somewhat surprising because the Full Court accepted that those four letters convey an entirely descriptive meaning of the kind recognised by Justice Stewart.
The decision, therefore, does not clarify the relative weight that ought to be given to the idea conveyed by a mark when considering deceptive similarity. In support of its decision the Full Court cites the High Court decision Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd  HCA 15 where the High Court held that an application for Rainmaster should proceed in the face of a registration for Rain King because one trader should not be accorded in effect a monopoly in words conveying the same idea. In that case it was the word RAIN that remained free to use. Why is VAGI any different?
Traders need to consider more than just the aural or visual components of existing marks when selecting their own. This case shows that the idea conveyed by a mark can weigh heavily in determining deceptive similarity and this becomes important, not just in the context of securing a registration, but in infringement of an already registered mark, where the test is also whether the marks are deceptive similar.