Health World v Shin-Sun – deceptive similarity case review

Since 1991 Health World Limited (“Health World”), had manufactured and sold a medicine product which it called Inner Health Powder. In 2000 it commenced sale of a similar product called INNER HEALTH PLUS and in September 2001 applied to register that name as a trade mark. However, in May 2001 Shin-Sun Australian Pty Ltd (“Shin-Sun”) applied to register the trade mark “HealthPlus” and subsequently obtained registration of that mark.

Crucially, as the proceedings were commenced prior to the commencement of the Trade Marks Amendment Act 2006 (Cth), Jacobson J found that the provisions of the Trade Marks Act 1995 (Cth) applied as they stood prior to the 2006 amendments. This meant that Health World were precluded from relying on the ‘contrary to law’ ground under s 42, that there was an additional requirement under s 60 that the marks be deceptively similar, and that there was an additional requirement under s 92 that the applicant for non-use be “a person aggrieved”.

Jacobson J found that the two marks were not deceptively similar because they conveyed different ideas and concepts. He was of the opinion that HealthPlus conveyed an impression of overall or general health and that INNER HEALTH PLUS specifically concerned internal health. In addition, he found the marks to be visually different as the dominant part of the INNER HEALTH PLUS mark was the phrase “Inner Health”.

At the heart of the dispute was the question of the reputation of Heath World in INNER HEALTH PLUS. Shin-Sun contended that Health World’s reputation in the Inner Health Plus capsules was not separate and distinct from its reputation in Inner Health Powder, the product it had launched nine years before. Jacobson J accepted Shin-Sun’s submission, and was of the opinion that the entire thrust of Health World’s launch of the Inner Health Plus capsules was to take advantage of the reputation of the Inner Health Powder and the goodwill attaching to it. He therefore rejected Health World’s ground for removal of the HealthPlus mark under s 88(2)(a) and s 60, claims that Shin-Sun had passed off its pharmaceutical products as those of Health World, and claims that Shin-Sun’s conduct was misleading and deceptive under the Trade Practices Act 1975 (Cth).

Health World also sought revocation of the HealthPlus mark under sections 88(2)(a) and 59, as at the time Shin-Sun applied for registration of their mark, they did not intend to use or authorise the use of the HealthPlus mark. Health World also sought removal of the HealthPlus mark on the ground that Shin-Sun had failed to use the mark in Australia during the three year period referred to in s 92(4)(a).

These grounds were raised because of the failure of Shin-Sun and the persons who conduct the business of that company to distinguish between the separate identities of Shin-Sun and an associated company, Nature’s Hive Pty Ltd (“Nature’s Hive”). In particular, the HealthPlus products identified Nature’s Hive rather than the trade mark owner Shin-Sun as being responsible for those products. Accordingly, Jacobson J found that Shin-Sun had failed to show an intention to use the mark and that Shin-Sun had not used the mark during the relevant three year period, but rather it was Nature’s Hive that used the mark during that period and at all other times. He also found that use of the HealthPlus mark by Nature’s Hive, although having the same directors as Shin-Sun, did not amount to authorised use because Shin-Sun did not relevantly control Nature’s Hive’s use of the mark.

Health World further contended that as the HealthPlus mark was being used to identify the goods of Nature’s Hive and not those of Shin-Sun, it was likely to deceive or cause confusion under s 88(2)(c). For the reasons above, this was accepted by Jacobson J.

It followed that if Health World had standing as a person aggrieved, the grounds under sections 59, 88(2)(c) and 92(4)(a) were made out. However, Jacobson J found that Health World was not a person aggrieved because the evidence was inconsistent with any intention of Health World to use the HEALTH PLUS trade mark, other than as part of its existing INNER HEALTH PLUS mark. As he found that the HealthPlus mark was not deceptively similar to the INNER HEALTH PLUS mark, Health World was found not to be a person aggrieved. Therefore, Health World’s applications seeking that the HealthPlus trade mark be removed from the register were dismissed.

The difficulties encountered by Shin-Sun illustrate the importance of ensuring that a trade mark is registered and remains in the name of the party that will use the mark. While Health World were able to show that Shin-Sun did not use the HealthPlus mark within the three year period specified in s 92(4)(a), the HealthPlus mark was not removed because Health World failed to show that they were a person aggrieved. It is important to note that the 2006 amendments have removed the requirement in s 92 that the applicant for removal of a mark be a person aggrieved.

Click here to see the judgment.