MUSASHI v A-SASHI – healthy competition?
The appeal from the Federal Circuit Court of Australia in Christian v Société Des Produits Nestlé SA (No 2)  FCAFC 153 concerning infringement of Nestlé’s MUSASHI marks raises interesting questions regarding the nature and scope of relief for trade mark infringement.
Nestle is the owner of a range of word marks and a device mark for dietary supplements, amongst other things, incorporating the word “MUSASHI”:
James William Christian is the founder of a business known as A-Sashi Vitamins for which he had registered a business name, domain name and was using logos incorporating the word “A-SASHI”:
Judge Manousaridis of the Federal Circuit Court of Australia at first instance found that Mr Christian’s use of the word “A-SASHI” infringed Nestle’s rights in the MUSASHI marks.
Mr Christian appealed the decision to the Full Court of the Federal Court of Australia (comprising Justice Bennett, Justice Katzmann and Justice Davies) claiming that the primary judge erred:
- by taking account of the first “A-SASHI” logo when determining the question of trade mark infringement;
- by incorrectly applying section 120(2) of the Trade Marks Act 1995 (Cth) (namely indirect trade mark infringement); and
- in finding that the “A-SASHI” word mark and the first and second “A-SASHI” logos were deceptively similar to the MUSASHI marks.
Nestle cross-appealed, alleging that the primary judge erred:
- by failing to require Mr Christian to cancel his business name;
- by failing to require Mr Christian to cancel his domain name; and
- by failing to award a general injunction preventing use of a mark that was substantially identical or deceptively similar to Nestlé’s MUSASHI marks.
The first ground of appeal concerned whether Mr Christian had used the first “A-SASHI” logo as a trade mark. In finding that he had, the Full Court reiterated that use of a trade mark in respect of goods encompasses not only use upon goods, but also use in physical or other relation to the goods. This was relevant because the use of the first A-SASHI logo by Mr Christian was confined only to use on a website. The Full Court referred to Ward Group Pty Ltd v Brodie & Stone Plc (2005) 143 FCR 479 (which can be found here), where Justice Merkel held that use of a mark on a website outside of Australia is sufficient use of a trade mark when the mark is downloaded by a user in the jurisdiction, where the evidence shows that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction. In this case, Mr Christian’s products were advertised as available to be shipped worldwide and Melbourne was specifically listed as a point of contact. Accordingly, as use of the first “A-SASHI” logo was intended to be made in Australia, or directed or targeted at Australians, there was use of the logo as a trade mark.
The second ground concerned whether, for the purposes of section 120(2) of the Trade Marks Act 1995 (Cth), use of the word “A-SASHI” was likely to deceive or cause confusion. The Full Court agreed with the primary judge’s finding that as Mr Christian himself regarded the A-Sashi and Musashi products as having the same customer base that consumers equally would too. The Full Court held that it was therefore open for the primary judge to find that there was a likelihood of deception or confusion as Mr Christian’s products were supplied, and were intended to be supplied, into a market in which at least a substantial proportion of the Musashi products are and had been supplied.
The final ground concerned the primary judge’s assessment of deceptive similarity, which the Full Court was careful to point out requires an evaluative exercise upon which reasonable minds may differ. The Full Court upheld the primary judge’s finding of deceptive similarity, agreeing that there were aural similarities between the substantial and significant components of the word marks, namely the two syllables “SA” and “SHI”, and that upon seeing the “A-SASHI” logo, consumers would direct their attention to the “SASHI” component.
The first two grounds of Nestlé’s cross-appeal concerned the primary judge’s failure to require Mr Christian to cancel his business and domain names, each which included the word “A-SASHI”. These types of orders are frequently sought by aggrieved parties in trade mark infringement proceedings so as to mitigate the risk of future infringements.
Nestlé submitted that the continued registration of the business and domain names would allow Mr Christian to use those names as “instruments of deception”. In making its submission, Nestle pointed to misleading or deceptive conduct and passing off cases where courts have, in addition to imposing primary injunctions restraining the infringing conduct, made orders that act as a quia timet injunction or an aid to the primary injunction so as to prevent a party from being equipped with instruments that would allow and/or facilitate continued infringement of the aggrieved party’s rights. The Full Court noted that while a power to require cancellation is not expressly provided for in the Trade Marks Act 1995 (Cth), it was nevertheless within the primary judge’s power to make orders requiring cancellation. Such an order was found to be warranted in the current circumstances where the continued registration could only serve as a temptation to Mr Christian to infringe Nestlé’s rights in the future and where the primary injunction would, in effect, bring Mr Christian’s A-Sashi Vitamins business to an end.
The final ground concerned Nestle’s submission that the primary judge should have awarded a general injunction preventing Mr Christian from using a mark that was substantially identical or deceptively similar to Nestlé’s MUSASHI marks. This form of injunctive relief is also frequently sought in trade mark infringement proceedings to not only mitigate the risk of future infringements, but to also prevent future litigation between the parties.
The Full Court found that the primary judge erred by not awarding a general injunction, noting that in fashioning relief the requirement is to not only focus on the infringing conduct in issue, but to also consider the risk or reasonable apprehension that the infringer will engage in the infringing conduct in the future. In the circumstances the Full Court held that Mr Christian’s belligerent and defiant conduct in the proceeding warranted the award of a general injunction, however its scope was confined to substantially identical marks only, as the Full Court was concerned that the subjective nature of the deceptive similarity test would make enforcement of the injunction uncertain.
Besides highlighting how enticing it is for small players to cash-in on the lucrative well-being and performance nutrition market, the Full Court’s decision is a reminder that relief sought in trade mark infringement proceedings should be crafted carefully. Such relief should address all mediums utilised by the infringer to carry out their infringing conduct and should be cast in terms that clearly inform the infringer of its boundaries and provide enforcement certainty for the aggrieved party.