Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd  FCAFC 83 (26 May 2017)
The Full Federal Court (Greenwood, Jagot and Beach JJ) dismissed Pham Global’s appeal and, in the process, reinforced the importance of correctly identifying the correct applicant for trademark registration because a subsequent transfer of ownership cannot cure an incorrect claim to ownership made at the time of filing an application for trademark registration.
The Full Court also provided some useful analysis of the correct test for assessing substantial identity of trade marks.
The Registrar’s decision is reported here
The primary judge’s decision is reported here
After the decision of the primary judge, Insight Radiology Pty Ltd changed its name to Pham Global Pty Ltd (Pham Global).
The parties are competitors in the medical imaging business. Insight Clinical has been operating in Western Australia since 2008 with seven clinics there, while Insight Radiology has been operating in NSW since 2004 with three clinics and opened another clinic in Tasmania in 2012.
Insight Clinical has been using the word marks INSIGHT and INSIGHT CLINICAL IMAGING as well as the ICI composite mark shown below since 2008 and registered the INSIGHT CLINICAL IMAGING word mark and the ICI composite mark for radiology services in class 44 with effect from 12 October 2012. These registrations carry s44(4) endorsements reflecting that registration was based on prior continuous use.
Insight Radiology has been using the INSIGHT RADIOLOGY word mark and the IR composite mark shown below since March 2012. Prior to that, the company name was AKP Radiology Consultants Pty Ltd and traded under the name Leeton Diagnostic Imaging. The change of company name occurred on 17 June 2013. Mr Alan Pham, the sole director of Insight Radiology applied to register the IR composite mark on 7 December 2011 for radiology services in class 44 and entered a voluntary endorsement to the effect that any registration would not confer exclusive rights in the words INSIGHT RADIOLOGY in the State of Western Australia. By a document dated 1 July 2013 (being after the trade mark application was accepted and during the opposition period), Mr Pham subsequently assigned the trade mark application to Insight Radiology.
The Registrar’s delegate found in favour of Insight Clinical under the ownership ground based on its prior use of the substantially identical ICI composite mark.
On the trade mark opposition appeal, Davies J disagreed with the delegate on the s58 ownership ground and did not consider the IR composite mark to be substantially identical to the ICI composite mark.
Davies J found that Mr Pham did not have the requisite intention to use the IR composite mark at the time of filing the trade mark application. However, the subsequent assignment to Insight Radiology was valid and, as a result, the company was, by virtue of s108(2), taken to be the applicant for registration and it did have the requisite intention to use the IR composite mark.
Davies J upheld the s60 reputation ground of opposition. Although Insight Clinical only carried on business in Western Australia, it did receive referrals from various interstate practitioners which was cogent evidence that it had acquired a reputation in its trade marks outside of Western Australia as at the relevant date of 7 December 2011. Her Honour considered that, because of this reputation, use of the applied for IR composite mark would be likely to deceive or cause confusion.
Davies J also upheld the s42(b) contrary to law ground of opposition on the basis that use of the IR composite mark and INSIGHT RADIOLOGY word mark contravened the Australian Consumer Law and constituted passing off.
Insight Clinical was successful in its Notice of Contention that Insight Radiology’s conduct constituted trade mark infringement, passing off and misleading or deceptive conduct under the Australian Consumer Law.
Insight Radiology failed in its defence and cross claim that Insight Clinical’s trade mark registrations were invalid or should have been limited to Western Australia.
Davies J was also satisfied that Mr Pham, being the sole director, secretary and 50% shareholder of Insight Radiology, is liable as joint tortfeasor and for aiding and abetting Insight Radiology’s wrongful use of the trade marks.
Ownership and intention to use
The Full Court referred to established authority that trade mark ownership may arise through authorship and prior use, or by the combination of authorship, the filing of an application for registration and an intention to use. Furthermore, the s58 ground of opposition should be construed as applying at the time the application is filed. At that time, Mr Pham was not the owner of the IR composite mark. Rather Insight Radiology was the true owner. Mr Pham was not the author of the IR composite mark and did not himself intend to use it. Rather, he intended that only Insight Radiology would use this mark. The subsequent purported assignment of the trade mark from Mr Pham to Insight Radiology was immaterial and could not cure the deficiency in ownership at the filing date of the trade mark application. Mr Pham could not assign something that he did not own. Hence, the Full Court found the primary judge to be in error in finding that the subsequent assignment operated to cure the deficiency in Mr Pham’s claim to ownership.
Pham Global belatedly attempted to rely on some kind of constructive trust, but the Full Court did not consider this because Mr Pham did not have any legal or equitable interest in the IR composite mark and the constructive trust issue was not raised before the primary judge.
Ownership and substantial identity
The Full Court also overturned the primary judge’s finding on substantial identity of the respective marks and agreed with the delegate that the IR composite mark was substantially identical to the ICI composite mark which had been previously used for the same services. Consequently, it was correct for the ownership ground of opposition to be upheld on this basis.
The test for substantial identity requires a side by side comparison of the respective marks, noting their similarities and differences having regard to their essential features (or dominant cognitive cues) and the total impression of resemblance or dissimilarity that emerges from the comparison.
The Full Court considered the primary judge fell into error by not properly considering the essential elements of the respective marks. These essential elements are the word “Insight” and the Device component of each mark. The word is the same in each mark and the Device appears to the left of this word in both marks. The dominant cognitive cues in both marks is a Device which is circular in shape evoking an eye to the left of the word “Insight”, while the other words “Clinical Imaging” and “radiology” are descriptive of the services offered. Not only is there a total impression of resemblance, the differences between the respective marks are slight having regard to these essential elements.
Given the Full Court’s findings on ownership, it was not strictly necessary for it to consider the s60 reputation ground of opposition. However, the Full Court did make some useful comments as to proper considerations in assessing reputation.
It was common ground that the ICI composite mark had acquired a relevant reputation in and around Perth (which is undoubtedly in Australia) and hence the s60(a) requirement of establishing a reputation in Australia was satisfied. The contentious issue was whether s60(b) was satisfied. This requires a conclusion that, because of this reputation, use of the IR composite mark would be likely to deceive or cause confusion.
There was ample evidence to support the primary judge’s finding that radiological services are provided as part of a specialist national market comprising radiographers, radiologists and medical practitioners, as well as patients.
The Full Court noted that it is common knowledge and not reasonably open to question that people freely travel between the States and Territories in Australia and proof of this fact is unnecessary. Further “the reality of modern life, with widespread use of the internet for advertising, job seeking, news gathering, entertainment, and social discourse and free and frequent movement of people across Australia for work, leisure, family and other purposes, necessarily impacts on both the acquisition of a reputation in a mark and the likelihood of the use of another mark being likely to deceive or confuse because of that reputation. Given current modes of communication and discourse and free and unfettered rights of travel within Australia, a substantial reputation in Western Australia in this national industry constituted a sufficient reputation in and across Australia for s 60(b) to be engaged”.
The Full Court also noted that Pham Global’s voluntary endorsement that registration of its IR composite mark would not give the exclusive right to use or authorise the use of the words INSIGHT RADIOLOGY in Western Australia was not an answer to the s60 ground of opposition.
Infringement, Australian Consumer Law and Passing Off
Before the primary judge, Insight Radiology (now Pham Global) conceded that, if Insight Clinical had developed a reputation in its marks extending to places in which Insight Radiology was operating (New South Wales and Tasmania), then it had contravened the ACL. Given the analysis and finding on the reach of Insight Clinical’s reputation being across Australia, this was effectively a concession that Insight Radiology’s conduct contravened the ACL and the same conclusion applies to the tort of passing off.
The Full Court also agreed with the primary judge and rejected Pham Global’s defences to infringement and cross claim that Insight Clinical’s trade mark registrations were invalid or should have been limited to Western Australia.