Ab Initio Software LLC

[2010] ATMO 66

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:Trade mark application number 1080099 (9), (42) (International Registration number 862298) - > - in the name of Ab Initio Software LLC.

Delegate:	Claudia Murray
Representation:	Holder: Written submissions by Fiona Brittain, Associate, Davies Collison Cave, Melbourne.
Decision:	2010 ATMO 66 Regulation 17A.24 – section 41(5) established – IRDA rejected.

Background

1. Ab Initio Software LLC (‘Ab Initio’ or ‘the holder’), a US company, has requested the extension to Australia of protection for International Registration Designating Australia (IRDA) number 862298. The IRDA’s Australian trade mark application number is 1080099, and its priority date is 18 July 2005. It is in respect of a small plain chevron device, as shown below (the border is for illustrative purposes only and is not part of the applied-for trade mark):

2. The IRDA was filed in classes 9 and 42 of the International (Nice) Classification of Goods and Services, in respect of the following goods and services:

   Class 9: Computer software, namely, general purpose programming platform for processing large volumes of data

   Class 42: Computer consultation services; custom computer software design and development services for others; providing consultation on the use, integration and operation of computer software programs; installation of computer software programs; and maintenance and support of computer software programs

3. A ground for rejection under subsection 41(5) of the Trade Marks Act 1995 (‘the Act’) was raised during examination against all of the goods and services included in the IRDA. The examiner’s first report, notifying the holder (via the International Bureau in Geneva) of the full provisional refusal under regulation 17A.16, stated:

   To be protected in Australia, your trade mark must be capable of distinguishing your goods/services from the similar goods/services of other traders in the market place.

   Your IRDA is refused as the trade mark is not capable of distinguishing the specified goods and services because your trade mark consists of the mathematical symbol > or greater than. This symbol is commonly used in the market place in relation to computer software and its programming. Other traders should be able to use > in connection with goods or services similar to yours.

4. The examiner also cited a prior trade mark registration, in terms of section 44. However, as the holder’s application to remove it for non-use was not opposed, that trade mark is no longer on the Register and it will not be necessary to refer to it again.

5. The holder was invited to provide written submissions and submit evidence in support of its claim to protection of the trade mark in Australia. It did so, but the examiner was not persuaded. She issued a second report, maintaining the ground for rejection. Despite a supplementary declaration being provided by the holder, the examiner maintained the ground for rejection in a third report, which also indicated her intention to initiate formal rejection of the IRDA, as the process appeared to be reaching an impasse. She observed:

   The symbol > has a very low level of inherent adaptability to distinguish because it is commonly used for the applied goods and services. The previous evidence and the supporting Statutory Declaration do not show use of the mark as applied for. The evidence provided is of a much more stylised > and in some instances this symbol is merely used as an arrow into the next page, as in the case of the website.

   Reiterating my second report, I cannot assess the actual extent of use of the trade mark in the marketplace if you provide usage of a different trade mark, or you do not provide turnover figures (an estimated first sale figure, even if high, does not indicate the actual sales figures in relation to the mark for the applied goods and services). You were also unable to provide advertising figures because of the direct sale to customers

   Nevertheless, even if sales and advertising figures were provided and these were substantial, it is not likely to be sufficient to overcome the objection. This is because the trade mark has merely been used as a symbol and not as a trade mark or badge of origin. The direct sale to customers and the confined, targeted market suggests that the trade mark is not widely spread across Australia and the evidence is therefore insufficient to overcome the ground for rejection under subsection 41(5).

6. At that point, Ab Initio requested that the matter be reviewed and decided on the written record by a delegate of the Registrar. I have been delegated to make that decision, based upon the evidence and written submissions filed by the holder.

   Evidence

7. The holder’s evidence comprises:

   ·     Statutory declaration of Alexandria M.L. Wudyka, with Exhibits AMLW-1 to AMLW -3, dated 19 December 2007.

   ·     Supplementary Statutory declaration of Alexandria M.L. Wudyka, with Exhibit AMLW-4, dated 18 November 2008.

8. Ms Wudyka has held the position of the holder’s Legal Counsel since 2003. She attests that her company has been using the chevron device in relation to its goods and services since 2004. In her second declaration, she gives the following explanation of the goods and services provided by her company, via its Australian subsidiary, Ab Initio Software Pty Ltd, which is based in North Sydney:

   The Goods and Services are of a specialised nature comprising computer programs used for the purpose of processing very large volumes of data on the order of gigabytes and terabytes of data and ancillary support services.

   The Goods support the challenging data processing problems for companies having large amounts of data such as those in the telecommunications, healthcare, banking and finance, insurance, e-commerce, transportation, retail and shipping industries. The software is used in critical applications such as data warehousing and associated data marts, real-time decision support systems, operational billing systems, clickstream analysis systems and customer relationship management systems. Attached hereto and marked Exhibit “AMLW-4" are current printouts from the website typical purchasers of the Goods and Services are telecommunications companies and banks. In the United States, the typical customer is a Fortune 500 company and worldwide the typical customer is a Global 2000 company.

   The Goods and Services are very expensive and involve considerable ongoing interaction between the Applicant and its customers and potential customers in relation to the selection, installation, configuring and training of the customer and its employees regarding use of the Goods. A typical first sale is in the order of US$600,000 to $1,000,000.

   All sales to such customers are direct - none of the Applicant's Goods or Services are sold or licensed through distribution channels. The Applicant does not advertise its Goods and Services in a conventional manner and does not make cold calls. The Applicant’s reputation is such that customers call the Applicant for the Goods and Services they need to manage the vast amounts of data.

   The Applicant and its trade marks are extremely well known in the niche IT market.

9. Ms Wudyka also explains that the chevron device was derived from a family of trade marks used by the company, ‘commencing with CO>OPERATING SYSTEM which was first used in the United States in 1997 and first used internationally in 1999.’ Various other examples of the holder’s ‘family’ of over a dozen, ranging from such disparate trade marks as I>O, ENTERPRISE META>ENVIRONMENT and DATA>PROFILER, have been registered overseas in countries such as the USA, Canada, India and Japan. The holder has Australian registrations for CO>OPERATING SYSTEM, FULL>SPECTRUM and GRAPH>IT.

10. Ms Wudyka also provides a list of fourteen overseas registrations, primarily from Canada, USA and the European Community, for what she suggests is the same small chevron device - > - that is the subject of this IRDA. However, consideration of Exhibit AMLW-3, which consists of database printouts of these registrations, reveals that, in most cases, the device which has been registered is actually a much larger, more rounded chevron, in line with the examples of the device used on the holder’s website, which Ms Wudyka has also provided. Exhibits AMLW-1 and AMLW-2 from the first declaration provides a limited handful of examples from the holder’s website and other marketing materials of the following large, brightly coloured, chevron device:

11. Exhibit AMLW-4 from the supplementary declaration depicts the following manner of use of a similar device, almost always together with the holder’s name, on sequential screens from the website, such as that depicted below:

    Ground of rejection

    Section 41 - Trade mark not distinguishing applicant’s goods or services

12. Section 41 of the Act deals with a trade mark’s capacity to distinguish an applicant’s goods or services. The section relevantly provides:

    (2)     An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

    Note:    For goods of a person and services of a person see section 6.

    (3)     In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

    (4)     Then, if the Registrar is still unable to decide the question, the following provisions apply.

    (5)     If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

    (a)     the Registrar is to consider whether, because of the combined effect of the following:

    (i)        the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

    (ii)       the use, or intended use, of the trade mark by the applicant;

    (iii)      any other circumstances;

    the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

    (b)     if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and

    (c)     if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.

    Note 1: For goods of a person and services of a person see section 6.

    Note 2: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

    (6)     If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

    (a)     if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

    (b)     in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

    Note 1: Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

    (a)      the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

    (b)     the time of production of goods or of the rendering of services.

    Note 2: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

13. Regulation 17A.28 of the 1995 Trade Marks Regulations applies this provision to IRDAs:

    17A.28         Grounds for rejecting IRDA

    (1) The grounds for rejecting an IRDA are the grounds set out in sections 39 to 44 of the Act, as affected by subregulation (2).

    (2) Sections 39 to 44 apply in relation to an IRDA as if:

    (a)     a reference in those sections:

    (i)        to an application for the registration of a trade mark were a reference to the IRDA; and

    (ii)       to an applicant were a reference to the holder of the IRDA; and

    (b)     the reference in paragraph 41 (6) (a) to the filing date in respect of an application were a reference to the date of international registration or the date of recording, as applicable, in respect of the IRDA;

    Discussion

14. Subsections 41(5) and (6) of the Act focus upon evidence of trade mark use. However, if a trade mark is determined to be inherently adapted to distinguish an applicant’s goods or services, then it is acceptable for registration under subsection 41(3), without reference to the later subsections of section 41. The manner in which section 41 interacts with section 33 (‘Application accepted or rejected’)[1] and facilitates a decision of a delegate of the Registrar upon the registrability of a trade mark was examined closely by Branson J in the Oregon case.[2] In considering that analysis, the Trade Marks Office Manual of Practice and Procedure comments:

    If the Registrar is able to decide, on the basis of its inherent qualities, that the trade mark is capable of distinguishing the goods or services of the applicant from those of other persons, the matter is resolved in favour of the applicant. This does not mean the Registrar must be in no doubt about the trade mark's capacity to distinguish. The Registrar may have some reservations in the matter but still decide that the trade mark is capable of distinguishing.

    Having said this, Branson J makes it clear that subsections 41(3) to 41(6) are an exception to the presumption of registrability.  If the Registrar is unable to decide, on the basis of its inherent qualities, that the trade mark is capable of distinguishing the goods or services of the applicant from those of other persons, the matter is not to be resolved in favour of the applicant at that point.  Conversely, however, unreasonable, unnecessary or speculative grounds for rejection are not to be raised.

    If there exists a ground for rejection which is reasonable, necessary and well-founded, the application can be dealt with only under subsections 41(5) or (6).  Under these subsections, there is a burden of proof on the applicant.  The extent of that burden is dictated by the meaning of the word "satisfied".[3]

    [1] The equivalent provision applying to IRDAs is regulation 17A.24 – ‘Final decision on examination’.

    [2] Blount Inc v Registrar of Trade Marks (1998) 40 IPR 498 at 503-505

    [3] Trade Marks Office Manual of Practice and Procedure, Part 22, paragraph 3.2.

15. I do not consider that the inherent qualities of the holder’s > device are such that I am able to decide, in terms of subsection 41(3), that it is capable of distinguishing on its face. Ms Brittain argued that ‘the > symbol does not convey any particular meaning or descriptive significance in relation to the designated goods and services in classes 9 and 42’, and Ab Initio’s evidence demonstrated that ‘use of the > symbol on its own is merely fanciful and does not convey any function or meaning’. That may be so, but in my view, that inability of the plain > symbol to convey any function or meaning extends to an inability to suggest trade mark significance. While I would agree that the applied-for device does add a modicum of extra ‘something’ when included in the holder’s word trade marks, such as CO>OPERATING SYSTEM, the same cannot be said when the device appears on its own. Alone and unadorned, as illustrated at the beginning of this decision, the applied-for > symbol appears very far from a recognizable business identifier. Indeed, even with the help of an extraneous border, it still seems little more than a randomly precipitated blemish on the page.

16. Being therefore undecided about the device’s capacity to distinguish at this point, the terms of section 41 require me to choose one of the two paths of further enquiry offered by subsections 41(5) and (6). It is convenient to consider these in reverse numerical order, so as to eliminate the absolute ground first. I agree with the examiner’s assessment, that the > device is not entirely devoid of any capacity to distinguish the applicant’s goods or services. Searches of relevant reference sources do not reveal it to be in the ‘ordinarily used to indicate’, ‘soap for soap’ word or functional shape category alluded to in the explanatory note to subsection 41(6). However, for the reasons outlined above, it is still arguably very close to the kind of sign envisaged by Jacob J in British Sugar PLC v James Robertson & Sons Ltd when he commented:

    The phrase [‘devoid of any distinctive character’] requires consideration of the mark on its own assuming no use. It is the sort of word (or other sign) which cannot do the job of distinguishing without first educating the public that it is a trade mark.[4]

    [4] [1996] RPC 281 at 306 in relation to s. 3 (1) (b) of the Trade Marks Act 1994 (U.K).

17. Under the circumstances, I turn to the provisions of subsection 41(5). These have been reproduced in full above. The Trade Mark Examiner’s Manual paraphrases the tests thus:

    Overall, section 41(5) of the Act requires the Registrar to consider a balance of the shortfall of inherent adaptation against the:

    ·     extent of use (in time, area, volume or market share terms) - a quantitative question

    ·     manner of use - a qualitative question

    ·     any other circumstances.[5]

    [5] Part 22, section 5.

18. I have already decided that the ‘shortfall of inherent adaptation’ in relation to the applied-for symbol is considerable. I must now consider whether the weight of the evidence before me is sufficient to overcome that shortfall and tip the balance in favour of a determination that the > device is capable of distinguishing the holder’s goods and services.

19. I will deal firstly with the manner and extent of the holder’s use. In regard to this, it is interesting to note that Ms Brittain’s written submissions began by drawing my attention to various uses of small arrow devices as depicted in ‘a random selection of printouts of computer software websites’. She contrasted these representations and their uses with the evidence of use of the > device on Ab Initio’s own website. She observed:

    As you will see, the > symbol is depicted in varying bright contrasting colours and is a very large and prominent element relative to the size of the type script used in the website. There are also small triangle devices which the reader must click into in order to obtain further details, or to scroll down the page. We submit that it is readily apparent to the person accessing the website that the > symbol is not a page turning mechanism and has no functional aspect at all, but rather operates to distinguish the goods or services dealt with or provided in the course of trade by the applicant company from goods or services so dealt with or provided by any other person.

1. I cannot agree with Ms Brittain’s claims. Fundamentally, the large, rounded symbol ‘depicted in varying bright contrasting colours’ is not the subject of the IRDA I am considering here. Neither is it substantially identical to the plain > symbol, in terms of section 7 of the Act. Subsection 7(1) provides that use of another version of a trade mark ‘with additions or alterations that do not substantially affect the identity of the trade mark’, may be taken as use of the original mark. A comparison of the two symbols side-by-side, in accordance with the well-known tests for substantial identity[6], manifestly reveals how very different they are:

[6] Shell Co. of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414-5.

1. It follows, therefore, that the evidence of the holder’s use of the latter device cannot be weighed into the balance for the purposes of deciding that the former is capable of distinguishing the holder’s goods and services. The other use evidenced by the holder is of a smaller and perhaps arguably substantially identical device to that which is the subject of its IRDA, as depicted in Exhibit AMLW-4 and illustrated earlier in this decision. However, that use is compromised by always occurring together with the words AB INITIO SOLUTIONS. In that context, the > symbol appears as what Jacob J has dubbed a ‘limping trade mark’, ‘where a sign proffered as a valid mark cannot really stand up on its own’[7].

   [7] Philips Electronics BV v Remington Consumer Products [1998] RPC 283, at 312.

2. Ms Brittain’s final submissions about the extent of the holder’s use related to the specialized nature of its market. She observed:

   Further, the fact that the goods and services provided under the mark are offered in a specialised market does not preclude the > mark from achieving factual distinctiveness.

   In Bausch & Lomb Inc v Registrar of Trade Marks (1980) 28 ALR 537 Lee J held that where a trade mark is used on a specialised product the enquiry should be directed to the section of the community following the particular pursuit or possessing the special vocational or technical interest. His Honour adopted the approach proposed by Dixon J in the Rohoe case and continued:

   "In my view one must approach the matter not as a layman with the loose knowledge to which I have referred, but from the point of view of how the word would be accepted amongst those who in fact distinguish the lens of one manufacturer from that of another by reference to a trade name, and in this case these are in the main the specialists in the field of eye care and to a lesser extent their patients. "

   On the basis of the foregoing, we submit that educated consumers of computer software goods and support services would be likely to understand the > symbol as operating as a trade mark in relation to the designated services, rather than fulfilling any type of functional or descriptive role.

3. Sundberg J, in Chocolaterie Guylian N.V. v Registrar of Trade Marks[8], has recently discussed the kind of survey evidence which might have been provided by the holder and to which Ms Brittain might have referred in support of her arguments. The trade mark being dealt with in that case was a chocolate seahorse shape and Sundberg J also referred to other authorities which had considered the shape of an ice cream cake[9] and the colour green for petrol stations[10]. However, the principles discussed there also apply to the kind of minimal device Ab Initio is seeking to register here. The courts have not necessarily been persuaded by sheer numbers of generalised declarations from members of the public. They have found survey evidence may not reliably demonstrate any more than that declarants simply recognize a particular sign when they see it. What is not clearly demonstrated is whether they actually recognize the sign as having a distinctive character, as a trade mark. The claim by trade mark owners that the public would in practice rely upon recognition of a shape or colour (or non-distinctive device) alone to identify a trader’s goods or services has been viewed with considerable scepticism by the courts.

   [8] [2009] FCA 891 (18 August 2009); (2009) AIPC 92-355; (2009) 82 IPR 13. paras 91-100

   [9] Unilever plc’s Trade Mark Applications [2003] RPC 35.

   [10] Woolworths Ltd v BP Plc (No 2) [2006] FCAFC 132; (2006) 154 FCR 97

4. In the event, Ms Brittain’s submissions upon the subject of what educated consumers of computer software may or may not understand about the significance of the > symbol are entirely unsupported by survey evidence of any kind. Accordingly, to summarise my conclusions under subsection 41(5) so far, I find the holder’s case in terms of subparagraphs 41(5)(a)(i) and (ii) to be simply unsubstantiated.

5. The third leg of the subsection 41(5) tripod rests upon the existence of ‘any other circumstances’. Such circumstances that a delegate might find persuasive or at least relevant in terms of a trade mark’s capacity to distinguish could include the existence of overseas registrations of a subject trade mark, or evidence of the imminent launch of a major marketing campaign likely to significantly boost the recognition of an already well-established mark. The holder has provided evidence of several overseas registrations which it hopes I will find to be relevant ‘other circumstances’ in this case. However, as I have already noted in my earlier examination of the evidence, most of Ab Initio’s overseas registrations are not in respect of the > symbol it has applied for here. Instead, they feature the much larger, rounded, quite different device which I have also dealt with above. I do not find that there exist any other circumstances capable of tipping the balance in the holder’s favour in this matter.

   Decision

6. Regulations 17A.24 and 17A.25 (the equivalent provisions to sections 33 and 34 of the Act that apply to IRDAs) relevantly provide:

   17A.24         Final decision on examination

   (1)     The Registrar must, after the examination, accept the IRDA unless he or she is satisfied that:

   (a)     it is not in accordance with this Division; or

   (b)     there are grounds for rejecting it.

   (2)     The Registrar may accept the IRDA subject to conditions or limitations.

   (3)     The Registrar must reject an IRDA, in whole or in part, if the Registrar is satisfied that:

   (a)     it is not in accordance with this Division; or

   (b)     there are grounds for rejecting it, in whole or in part.

   17A.25         Notice of final decision on examination

   (1)…

   (2)     If the Registrar made a report under regulation 17A.16 in respect of the IRDA, the Registrar:

   (a)     must notify the International Bureau of the final decision on examination in accordance with rule 17 of the Common Regulations; and

   (b)     must notify the holder, in writing, of the final decision on examination…

7. The holder has had an opportunity to be heard and has instead requested the matter to be decided on the written record. At the end of the process, I am not satisfied that the applied-for > symbol ‘does or will so distinguish the designated goods or services’. Consequently, I find, in terms of paragraph 41(5)(c), that it is not capable of distinguishing those goods or services. I am therefore satisfied that there is a ground under section 41 of the Act for rejecting this IRDA. In accordance with subregulation 17A.24(3), I now reject trade mark application number 1080099, International Registration number 862298. Both the holder and the International Bureau will be notified of this decision.

   Claudia Murray
   Hearing Officer
   Trade Marks Hearings
   23 July 2010