On 21 October 2021 Puma filed an Australian trade mark application for the word PROCAT in classes 18 (bags etc) and 25 (clothing, footwear, headgear for wear) (the PROCAT mark). The PROCAT mark was in a stylised form, namely:

Caterpillar Inc opposed the PROCAT mark pursuant to sections 42(b), 44 and 60 of the Trade Marks Act 1995 (Cth) (TMA) based on its various CAT marks (both in plain font and stylised).

Caterpillar was unsuccessful before the Delegate of the Registrar of Trade Marks but was successful on appeal before the primary judge.

This proceeding before the Full Court was an application for leave to appeal from the decision of the primary judge (Caterpillar Inc v Puma SE [2021] FCA 1014 (PJ)). Leave to appeal is required pursuant to section 195(2) of the TMA. The application for leave and the appeal were heard together. Caterpillar opposed the granting of leave to appeal, primarily on the basis that the proposed grounds did not demonstrate error on the part of the primary judge.

Approach of the Full Court to the question of leave to appeal

In approaching the question of leave to appeal, the Full Court stated that there are no rigid rules, dispositive verbal formulae or exhaustive criteria to be applied. It stated that in cases such as this, where the consequence of upholding the primary judge’s judgment may extinguish any right the applicant may have to obtain registration, the exercise of the discretion requires particular focus on that circumstance (citing Lomas v Winton Shire Council [2002] FCAFC 413 at [15]-[16]). However, if the Court is clearly satisfied that the proposed appeal has no merit, it would ordinarily be appropriate to refuse leave to appeal.

The Full Court observed that this approach differs from cases where an opponent has failed before a delegate and on appeal to a judge of this Court where, “generally speaking”, it is necessary to demonstrate “a clear prima facie case of error in the decision appealed from” (citing Bauer Consumer Media Ltd v Evergreen Television Pty Ltd [2019] FCAFC 71 at [282]).

Summary contentions of the applicant and reasons of the primary judge

Puma contended that the primary judge erred in finding that the opposition under section 44 was made out on the basis that the PROCAT mark was deceptively similar to each of the CAT marks. A key argument by Puma was that the Procat fancy mark was an invented word limited to the particular form, case and spacing depicted in the mark and the primary judge erred in not limiting and restricting the Procat mark to its fancy form.

The primary judge found that the PROCAT mark was deceptively similar to each of the CAT marks by reason of the “combined effect” (PJ [107]) of each of the following findings of fact:

• First, that the word “cat” comprised “the whole of the CAT word mark and one of the two elements of the CAT device mark (the second element being the triangle under the letter “a”). The word ‘cat’ constitutes half the letters of the PROCAT mark and one of its two syllables”: PJ [108].
• Second, that an ordinary consumer is likely to “read, comprehend and pronounce” the PROCAT mark as a combination of two words, being, “pro” and “cat” at PJ [109].
• Third, that the relevant trade context “concerns a wide range of apparel, footwear, bags and accessories sold in retail stores and online in the work wear and lifestyle market segments” with similar styles across brands: PJ [110].
• In that trading context, there is a real and tangible risk that a significant number of consumers, who were familiar with but had an imperfect recollection of the CAT mark, would be confused as to whether goods labelled with the PROCAT mark were connected in the course of trade with CAT branded goods, as being a “professional” or high performance or otherwise special line of CAT goods.

The primary judge stated that the fact that Puma had applied to register the PROCAT mark as a fancy mark in lower case with sans-serif font did not limit the trade mark rights granted upon registration to use with a single colour or shade of lettering or indeed to use without any letters being capitalised. The primary judge considered that use of the PROCAT mark in Australia in the same manner as in the USA and Canada (which was in evidence), whereby the letters “pro” and “cat” have different shades or colours or the word is depicted with a capital “p” and a capital “c”, would constitute a use with alterations which do not substantially affect the identity of the trade mark. The primary judge concluded that such use would constitute fair and normal use of the mark and, in assessing the likelihood of confusion, it was permissible to contemplate such use.

Appeal

The Full Court grouped the draft grounds of appeal into three arguments.

The first ground related to an asserted error in the assessment of the PROCAT mark and the assumption of normal and fair use of the mark for all goods covered by the application. Three discrete errors were asserted by Puma: (1) a failure to limit the PROCAT mark to its fancy form; (2) the search for meaning of the mark when “PROCAT” is an invented word; and (3) misapplication of section 7 of the TMA. (Draft grounds 2(b) (vi)-(vii).)

In relation to the first contention, Puma argued that consideration must be limited to the form depicted in the application and that changes to the form of a fancy mark have the consequence that it ceases to be the same trade mark, which propositions were said to flow from Qantas Airways Ltd v Edwards [2016] FCA 729 (Qantas). Puma further submitted that the primary judge erred in considering the evidence (admitted over objection) of overseas online use of “ProCat” as a trade mark (with a capital “P” and “C”) in promotional material.

In relation to the second contention, Puma submitted that the primary judge erred in respect of his consideration of the trade context upon which the finding of contextual confusion was based in that he wrongly searched for and ascertained meaning of the invented word which comprises the mark. Puma argued that the primary judge failed to identify why consumers would understand that “cat” in a “professional cat” or “being positive towards a cat” was a reference to Caterpillar and/or its goods.

Finally, turning to the third contention, section 7(1) of the TMA provides that “If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.” Puma argued that, in his consideration of the normal and fair use of the mark, the primary judge erred in that he impermissibly extended the scope of the applicant’s applied for mark. According to Puma, the primary judge ought to have considered only actual past use; asserting that section 7(1) does not extend to hypothetical future uses.

The Full Court rejected the first proposed ground of appeal. That Puma had applied for a fancy form of mark did not limit the scope of the inquiry for the purposes of section 44 of the TMA to that precise form. At [68] the Full Court held:

The question of deceptive similarity is to be resolved notionally on the assumption that the PROCAT mark, if registered, will be used to the full extent of the statutory right of the owner. In answering that question it was clearly open to the primary judge to consider, as examples of normal and fair use, the manner in which the PROCAT mark had been used in the USA and Canada. The differences in shading and colouring, whether or not combined with capital lettering, did not step beyond normal and fair use of the applied for mark and in our view illustrated the likelihood of confusion that his Honour was required to assess having regard to all of the relevant circumstances.

In relation to the suggested misapplication of section 7(1) of the TMA, the Full Court concluded that the primary judge did not apply section 7(1) to section 44. Rather, he considered whether use of the mark in the form in which it had been used by Puma overseas might properly be regarded as fair and normal use and he was entitled to take into account any potential use of the opposed mark with additions or alterations that did not substantially affect its identity. Moreover, noting that “use of a trade mark” is defined in section 6 of the TMA to have “the meaning affected by subsections 7(1), (2) and (3)”, the Full Court concluded that, where the phrase “use of a trade mark” appears in a section of the TMA, it may be necessary to ask whether its operation is affected by (inter alia) section 7(1).

The second ground of appeal by Puma concerned the finding at PJ [111] of contextual confusion, namely that the primary judge adopted an unduly narrow approach in his consideration of the surrounding circumstances. (Draft grounds 2 (a), 2(b)(i)-(v), 2(d)-(e) and 3.)

Puma argued that the primary judge wrongly searched for meaning in an invented word which then caused him to overlook that the relevant consumer would be aware that “cat” had other meanings and uses further to being used as a brand by Caterpillar and there was no apparent reason why consumers would step from “professional cat” to Caterpillar and or its goods.

The Full Court rejected this proposed ground, noting that the primary judge had extensively summarised the evidence and made a number of factual findings and that Puma did not contend that these findings were not open on the evidence. The Full Court found that no error had been identified in the primary judge’s reasoning and in his conclusion that pronounced as a combination of two words “pro” and “cat”, the word would have a meaning to consumers of a professional “cat” or being for or positive towards a “cat”. The finding was open on the evidence. The Full Court rejected a suggestion that the primary judge limited his consideration of trade context to just one paragraph; rather, he had made a significant number of findings of fact and there was no suggestion by Puma that such findings were not open on the evidence. Accordingly, no error was shown.

A further interesting argument developed by Puma in oral submissions was that the primary judge employed an overly broad approach to likelihood of confusion which failed to take account of Puma’s reputation in the leaping cat device such that there could be no real risk that consumers would associate the PROCAT mark with goods made, endorsed by or otherwise associated with Caterpillar. The Full Court stated that, whilst the primary judge had found at PJ[31] that the Puma leaping cat device is a well-known trade mark, that did not assist the argument that consumers of the relevant products should be imputed with some degree of knowledge that the word “cat” is not exclusive to Caterpillar and its goods with the consequence that there is no real risk that they would be left in doubt or have cause to wonder whether goods labelled with the PROCAT mark were connected with Caterpillar and its goods.

The Full Court concluded that it was open to the primary judge to conclude that consumers would be caused to wonder whether there is a commercial association between PROCAT branded goods and those of Caterpillar even with a knowledge of Puma and its leaping cat device, stating that “[i]t may be that some consumers would not be confused, but that is not to the point. His Honour was concerned with the impression of a significant number of hypothetical consumers”

The third ground rested on the contention that the primary judge erred in finding that the ground of opposition under s 60 of the TMA was established by relying on “the same reasons” for upholding the section 44 ground. (Draft grounds 4 and 5). Although deceptive similarity is not part of the test under s 60, given the Full Court found the primary judge was correct in his assessment of deceptive similarity in respect of section 44, and given Puma did not advance any submission in addition to its s 44 arguments in support of these draft grounds, unsurprisingly, their Honours considered his Honour was correct in his assessment of the section 60 opposition to the PROCAT mark. The proposed ground of appeal was rejected.

Ultimately, the Full Court concluded that there was no merit in any of the proposed grounds and it refused leave to appeal, ordering an assessment of costs in lump sum.