Health World Ltd v Shin-Sun Australia Pty Ltd
Health World Ltd v Shin-Sun Australia Pty Ltd [2010] HCA 13 (21 April 2010)

Summary

Majority: French CJ, Gummow, Heydon, Crennan, Bell JJ (unanimous; separate reasons by Crennan J)

Decision: Appeal allowed.

This case in essence involved an issue of standing that arose as a result of the appellant seeking to have the respondent’s trade mark cancelled or removed under the Trade Marks Act 1995 (Cth), which required that the appellant be an “aggrieved” person under the Act. The Court departed from a line of reasoning that stipulated that an “aggrieved” person must demonstrate that they intend to use the trade mark or show that there is a reasonable possibility of being disadvantaged as a result of the continuing registration of the trade mark. Instead, the Court held that the word “aggrieved” is to be construed liberally in this circumstance and the applicant gained standing by demonstrating that it and the respondent were trade rivals dealing in similar goods which were the subject of the challenged trade mark.

Facts
The appellant in this case, Health World, manufactures and supplies nutritional supplements under the names “Inner Health” and “Inner Health Plus”. The respondent, Shin-Sun, also manufactures and supplies nutritional supplements, which are marketed under the name “HealthPlus”. In 2001 the appellant and respondent each applied for registration of trade marks. In May 2001, Shin-Sun applied for the registration of “HEALTHPLUS” as a trade mark and in September 2001, Health World applied for registration of “Inner HEALTH PLUS” as a trade mark.

Soon after, the appellant filed a notice of opposition to the respondent’s application to register “HEALTHPLUS” as a trade mark, claiming it was deceptively similar to its “INNER HEALTH PLUS” mark. The appellant’s opposition was rejected by the Registrar of Trade Marks and a subsequent appeal in the Federal Court was dismissed. This meant that the “HEALTHPLUS” mark was entered on the Register.

In 2006 Health World brought two proceedings before the Federal Court, which were heard together. In the first proceeding, the appellant argued that it was an “aggrieved person” and sought cancellation of the registration of the respondent’s “HEALTHPLUS” under s. 88(1) of the Trade Marks Act 1995 (Cth) on the ground that Shin-Sun did not intend to use the mark in Australia, as provided for by s. 59(a) of this Act. The primary judge dismissed this claim and found that Health World was not an “aggrieved person” under s. 88(1) of the Act. However, were it not for this finding, the primary judge would have decided in favour of the appellant on its two other claims – viz., that the appellant had successfully made out its grounds for removal of the trade mark with respect to Shin-Sun lacking an intention to use the mark in Australia (s. 59(a)) and that Shin-Sun had allowed the mark to become deceptive or to cause confusion (s. 88(2)(c)) [14].

In the second proceeding, the primary judge held that the appellant was not an “aggrieved person” under s. 92(1) of the Act. Similar to the first proceeding, had the judge found that the appellant was an “aggrieved person” for the purposes of this section of the Act, he would have decided that the appellant demonstrated use of the trade mark during the relevant period and thus would have removed the mark from the Register.

The third proceeding, this time commenced by Shin-Sun, again turned on the “person aggrieved” test under the Act. This time, however, the judge found that Shin-Sun was not a “person aggrieved” and so dismissed the proceeding.

Health World then appealed the primary judge's finding that it was not an "aggrieved person" under the Act to the Full Court. The Full Court agreed with the primary judge and dismissed Health World's appeals.

In the decision of the High Court, the majority note, with a sense of frustration, the “curious character of the Full Court’s conclusion, where there are two rival traders who have lost no opportunity to attack each other’s attempts to register trade marks both before the Registrar and in four sets of court proceedings which have so far been heard by 10 judges, that neither of them is aggrieved, and each is to be regarded as falling in a class of intermeddlers, lacking any interest to be protected.” [16] With this, the majority set about articulating the errors in the Full Court’s reasoning.

Decision
The Court held that the Full Court should not have followed Kraft Foods Inc v Gaines Pet Foods Corporation (1996) 65 FCR 104 (“Kraft’s case”) in determining the meaning of an “aggrieved person” as it was plainly wrongly decided.

In Kraft’s case, it was held that McLelland J in Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 (“Ritz Hotel case”) had adopted an exhaustive test to determine whether an applicant was a person “aggrieved”. The majority in Kraft’s case held that an applicant must demonstrate a reasonable possibility of being ‘appreciably disadvantaged in a legal or practical sense’ by the trade mark on the register (see Kraft’s case at [113]).

However, the Court found that the Full Court in Kraft’s case, in using the word “must”, erroneously attributed an exhaustive test to McLelland J in the Ritz Hotel case. Further, the Court stressed that McLelland J was not propounding a “general” test to offer a complete account of the meaning of the legislative provision or “marking the outer boundary of the words ‘aggrieved person’” [41], but was simply deciding the particular controversy before him.

In sum, the Court held that Kraft’s case was wrong and should not have been followed by the Full Court. The Court went further explicitly to overrule that portion of Kraft’s case purporting to require an exhaustive test of an “aggrieved person” and stressed that the word “aggrieved” in the Trade Marks Act 1995 (Cth) is to be “liberally construed” [30].

Comment
The Court was clearly dissatisfied with the lower court’s findings that neither party was an “aggrieved person”, and thus lacked standing, even though they were rival traders in similar goods and had vigorously opposed each other’s trade mark applications. Although the Court’s finding as to the construal of “aggrieved” was clearly supported by the authorities, and Kraft’s case was plainly wrong insofar as it is understood to have attributed an exhaustive test to McLelland J in the Ritz Hotel case, in the end this case clearly follows a developing trend on the French Court to decide cases narrowly.

This decision is narrow in the sense that it offers little to assist one to understand what the word “aggrieved” means when used legislatively and undefined. Simply finding that this word should be construed liberally and that there is no exhaustive test as to determining when a party is an “aggrieved person” under the Act, says very little. This, I suggest, is unnecessarily cryptic and generates little precedential value or clarity in reasoning expected of the highest court in the land. It does, however, give the appearance of the Court acting in unison, which may be comforting to some.

While some may favour this apparent harmony on the Court, I’m not so convinced of it. The streak of unanimous decisions by the French Court, this case included, indicates to me that this Court is pursuing a minimalist jurisprudence in a quest for apparent, but perhaps superficial, unanimity. This superficiality is evidenced, for instance, by the number of concurring opinions containing important disagreements that are left to a later day or a later court.

In the early days of the Roberts Court in the US, many trumpeted the sheer number of unanimous decisions coming out of this Court and praised its new Chief’s “leadership skills”. After the honeymoon, the Court sensibly returned to dealing with the vexing questions, including general principles and defined threshold tests. With this, so did 5-4 decisions.

As French CJ and Bell and Kiefel JJ settle in and others approach retirement, I anticipate this narrow, wooden jurisprudence may give way to a more robust, critical analysis of the hard questions and a revival of the old disagreements. Indeed, that is my hope.