Musidor BV (Musidor), a Dutch corporation, has been the owner of a registration on the trademark ROLLING STONES in Australia in respect of, inter alia, compact discs since 1976. Robert William Tansing, trading as Apple House Music (Apple House), obtained recordings of live performances by the ROLLING STONES musical group and these were released in Australia clearly marked on the packaging to show that they were "unauthorized". In late 1993, Musidor sued Apple House for infringement and, in response, Apple House filed suit seeking a declaration that their use of the words ROLLING STONES did not constitute an infringement of the registered trademark.

The trial judge held that there was no trademark infringement because Apple House's use of the words ROLLING STONES was use of the words to describe the product (i.e. the recorded music) and that it therefore did not constitute trademark use.

Musidor appealed to the Full Court of the Federal Court, and, in a majority decision rendered on August 5, 1994, the appeal was dismissed, after due consideration of the definition of a trademark and the provision dealing with infringement, on the grounds that the use of the words ROLLING STONES was not use of the registered trademark for the purpose of indicating a connection in the course of trade between the goods and the person who had the right to use the mark. In other words, although the court held that the words ROLLING STONES on Apple House's recordings would convey that they contained the music of the well-known musical group, this was not sufficient to constitute trademark use in this case, as the words ROLLING STONES were not used for the purpose of indicating a connection in the course of trade between Apple House and the goods covered by the registration. It was held by the court that the words ROLLING STONES were only used by Apple House to identify a recording that had been made 30 years ago of live performances by the musical group and that had been reproduced and embodied in the discs manufactured by Apple House, and that this did not constitute trademark use.

The majority was also of the view that the impression given by the packaging, including the warning to the effect that the release of the recordings had not been authorized by the ROLLING STONES musical group, served additionally to indicate that the words ROLLING STONES were used on the discs to identify the group and not to signify a connection in the course of trade between Apple House and the discs contained in the packaging.