Alto Group Pty Ltd v Sekaku Electron Industry Co. Ltd

[2004] ATMO 2

TRADE MARKS ACT 1995

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

Re:Opposition by ALTO GROUP PTY LTD to registration of trade mark application 869909(9) filed in the name of SEKAKU ELECTRON INDUSTRY CO. LTD.

Delegate:

Claudia Murray

Representation:

Opponent

Julia Baird, of Counsel, instructed by Dibbs Barker Gosling, Lawyers.

Applicant

Gerard Skelly, legal practitioner, Spruson & Ferguson, Patent and Trade Mark Attorneys.

Decision:

1. Section 52 Opposition: registration allowed - s 55(b).

2. Costs awarded against opponent.

Background

1. Sekaku Electron Industry Co. Ltd. (the applicant) filed trade mark application number 869909 on 20 March 2001. The subject trade mark is:

 

1. The application was filed in class 9 of the International (Nice) Classification of Goods and Services, in respect of:

   Microphones, receivers, transmitters, public address amplifiers, audio amplifiers, car amplifiers, radio receivers and tuners, equalizers, audio cassettes, megaphones, horn speakers, speakers; discussion system comprising microphones, speakers, amplifiers, booster units, cables, power supplies and parts for all of the above.

2. No grounds for rejection under the Trade Marks Act 1995 (the Act) were raised against the application during examination, and it was advertised accepted for registration in the Australian Official Journal of Trade Marks, on 16 August 2001.

3. On 14 November 2001, Alto Group Pty Ltd (the opponent) filed notice of opposition to registration of the trade mark. Eight grounds of opposition were listed in the notice.

4. Evidence in support, answer and reply was served and filed and, in due course, the applicant requested a hearing upon the matter. A hearing was held before me, as a delegate of the Registrar, in Sydney, on 28 October 2003. Mr Gerard Skelly, of Spruson & Ferguson, Patent and Trade Mark Attorneys, Sydney, represented the applicant at the hearing. Ms Julia Baird, of Counsel, instructed by Mr Macek Rubetzki, of Dibbs Barker Gosling, Lawyers, Sydney, represented the opponent. Mr Ralph Fitzgerald, the opponent's Corporate Counsel, was also present.

Evidence

Evidence in support

1. The opponent's evidence in support comprises a declaration by George Altomonte, dated 11 February 2002, and accompanied by Exhibits GA1 to GA4. Exhibits GA1 and GA4 are copies of declarations made in 1998 and 1999 by Mr Altomonte in relation to other trade mark matters. His February 2002 declaration is mainly directed towards updating the information provided in the earlier declarations, providing more recent income figures, and details of changed business arrangements.

2. Mr Altomonte declares that he is the Chairman and founder of the Alto Group of Companies (the Alto Group), which includes the opponent, Alto Group Pty Ltd. He incorporated the company now known as Alto Prestige Pty Ltd on 15 May 1968 and has been a director of that company and the other companies within the Alto Group since that date. Mr Altomonte gives details of a trade mark owned by the opponent, which he says is substantially identical with or deceptively similar to the applicant's trade mark, and registered in respect of services closely related to the applicant's goods. The details of that trade mark are:

T/Mark No.	780241
Trade Mark	ALTO
Filing Date	3 December 1998
Class 35 Services	Advertising, promotion and sales of motor vehicles; advertising, promotion and sales of motor vehicle parts and motor vehicle accessories including motor vehicle tyres
Class 37 Services	Maintenance, servicing and repair of motor vehicles including motor vehicle panel and body repairs; maintenance servicing, repair and installation of parts and accessories for motor vehicles; after sales service; motor vehicle cleaning; motor vehicle car wash; motor vehicle detailing and polishing; motor vehicle service stations

1. Mr Altomonte provides substantial income figures for vehicle sales, sales of vehicle parts and accessories, and also vehicle servicing conducted under the ALTO trade mark by the Alto Group, during the ten years prior to the date of filing of the opposed trade mark application. He explains that vehicles sold by the Alto group routinely incorporate audio systems, radio systems, audio and radio components, mobile phone kits and associated cabling. These systems and components included amplifiers, speakers, and microphones, and other items identified in the applicant's specification of goods. If a customer requires a vehicle's existing system to be upgraded or replaced, or a mobile phone kit to be installed, the Alto group or its sub-contractors provide this service, for a fee. Mr Altomonte declares his belief that it is common in the market place for services such as those provided by the opponent to be applied to, or performed on, the applicant's specific goods of interest. For these reasons, he argues, it is clear that those goods and services are closely related.

Evidence in answer

1. The applicant's evidence in answer comprises two declarations. The first declaration, dated 17 March 2003, is by Michael Anthony Rumore, licensed private enquiry agent. Mr Rumore's declaration records some market place enquiries he made at the instruction of the applicant, for the purpose of ascertaining usage of the word ALTO as a trade mark by businesses other than Alto Group Pty Limited in the motor vehicle industry. The declaration documents four such usages.

2. The second declaration is by Gerard James Skelly, Principal of Spruson & Ferguson. It is dated 18 March 2003, and refers to a search of the Trade Marks Database he conducted to locate trade marks indexed as containing or consisting of the word ALTO particularly in relation to motor vehicle related products and services. Exhibit GJS-1, incorporating the trade mark details of six such trade marks, accompanies the declaration.

Evidence in reply

1. The opponent's evidence in reply is a declaration, dated 23 May 2003, by Ralph Fitzgerald, Corporate Counsel employed by the opponent. The declaration describes investigations and actions taken by the opponent in relation to some of the trade marks listed in the applicant's evidence in answer. Exhibits RF1 and RF2 accompany the declaration.

Grounds of opposition

1. Some time prior to the hearing, on 1 July 2003, the opponent indicated that it would be relying on the grounds of opposition raised in its notice under sections 42, 44 and 60 of the Act. The opponent presented its case in relation to section 42 last, as it relied on several of the submissions already put in terms of section 60. I will follow the same order of consideration here.

Section 44 - substantially identical or deceptively similar trade marks

1. Subsection 44(1), applied to the present circumstances, provides that an application for registration must be rejected if it is substantially identical, or deceptively similar, to another person's trade mark application or registration that has an earlier priority date, and covers services that are closely related to the applicant's goods. The definition of "deceptively similar" in section 10 is that "a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion". While subsection 14(2) provides that services are similar to other services if they are the same as, or of the same description as, those other services, the legislation provides no further elaboration upon how services that are "closely related" to particular goods may be determined.

2. The applicant has not disputed the earlier filing date of the opponent's registration. The issues to be decided here are whether the relevant trade marks are substantially identical or deceptively similar, and whether the goods and services in question are closely related.

3. Ms Baird relied upon the classic tests set out by Windeyer J in Shell Co. of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407 at pages 414-415, to argue that the trade marks ALTO and were substantially identical and deceptively similar. She argued that the two marks "share all of their distinguishing characteristics in common", and that "the minor stylistic embellishment used in relation to the letter 'A' in the Opposed Trade Mark does not alter the overwhelming impression of resemblance".

4. Mr Skelly, in response, also cited Windeyer J's tests, in addition to Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641, Registrar of Trade Marks v Woolworths Limited (1999) 45 IPR 411 (Woolworths) and others. The basis of his arguments was that the applicant's trade mark, despite having been "irrelevantly" indexed by the Trade Marks Office as the word ALTO, was in fact simply the letters LTO preceded by a triangle device. He said that there was no evidence available as to how any prospective customer might view the mark, and it was the applicant's submission that its trade mark would not be recalled as the word ALTO. The triangle device had strong visual impact and would clearly be seen as a device. Further, Mr Skelly argued, verbal identification of the applicant's trade mark by reference to the letters LTO would be unlikely to result in confusion with the familiar word ALTO. Mr Skelly also cited Seven Network Ltd v Millenium Clothing Unlimited Pty Ltd [2002] ATMO 69 (21 August 2002), in support of his arguments.

5. I have considered the parties' submissions in relation to substantial identity of the trade marks, in light of Windeyer J's test. I cannot agree with Ms Baird's conclusions upon this point. For me, a side by side comparison of the two marks  and ALTO leads to an unshakable impression of dissimilarity, resulting from the presence in the first trade mark of an additional essential feature, a distinctive triangular device, unmistakably pre-eminent in relation to the letters LTO. I find that the applicant and opponent's trade marks are not substantially identical.

6. The question of deceptive similarity is, however, rather more complex. Dixon and McTiernan JJ in Australian Woollen Mills Ltd v F.S.Walton & Co Ltd, supra, at page 658 say:

   In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.

7. Here, the "effect of spoken description" cannot easily be determined. Mr Skelly has pointed out that there is no evidence available to me as to how its trade mark may be viewed by prospective customers, and submits that the applicant itself does not believe its trade mark is likely to be recalled as the word "Alto". Ms Baird suggested at the hearing that there has been no Australian use of the trade mark to date, and Mr Skelly did not dispute her supposition. If the applicant's future aural advertising refers to the trade mark using the letters "LTO", rather than the word "Alto", customers may indeed quickly come to identify it thus, regardless of whether they initially wondered, looking at the visual form, whether the triangle was in fact an "A". However, the applicant has declined to clearly indicate its intentions to do this, despite the support this might lend to its case.

8. The trade mark is intended for use in relation to goods that are used for, inter alia, the recording and reproduction of music. This is a market place where the term "Alto" has a parlance familiar to many people. Mr Skelly himself alluded to this musical connection in his submissions, noting that "the word is derived from Latin, meaning high and is used in musical terminology (eg an alto voice)". I believe that many, if not most, people will refer to the applicant's trade mark as the ALTO trade mark. The test is within a commercial context and the market place within which the opposed trade mark is proposed to be used is that for audio and hi-fi equipment. (See: Lord Parker (then Parker J) in Re Application by the Pianotist Co Ltd (1906) 1A IPR 379 at page 380; 23 RPC 774 at page 777.)

9. In Woolworths, supra, at page 428, French J summarises the essential elements for determining deceptive similarity between trade marks, first set out in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. Two of the elements he describes are related to the surrounding circumstances in which the trade marks are used:

   (iii) In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.

   ...

   (v) The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained.

10. When the applicant's trade mark is considered in the context of its notional market, for what Mr Skelly said may be "loosely characterised as audio goods", it is fairly obviously the word ALTO, albeit featuring a filled-in triangle device as its letter "A". However, the opponent’s market place within which it uses the trade mark ALTO is car sales, service and repair, together with ancillary services such as spare parts sales. Thus, while I find that the trade marks are deceptively similar, it is with the proviso that the commercial contexts of each trade mark are quite different from each other.

11. I now turn to consideration of whether the applicant’s goods are closely related to the services nominated on the opponent’s registration. In Kellegg Co v Exxon Corp (2001) 53 IPR 177 at page 183, Hearing Officer Williams indicated that the appropriate course for the Registrar's delegate is to proceed on the assumption that goods and services are not closely related unless the contrary is established to the necessary degree. It appears to me that, as a matter of commonsense, the goods and services in question here are not closely related.

12. The opponent founds its case on the fact that most cars contain radios and that amongst the accessories it sells are car radios. However, this approach is somewhat simplistic and is akin to the proposition that because aircraft contain seats, a seat and an aircraft are closely related. A different approach to the question is obviously needed. I think that the tests lie in the perceptions of the public.

13. A trader who sells cars does not necessarily sell car audio equipment except inasmuch as it is a part of a car. Most car sales and service agencies that do sell such goods do not sell them from over the spare parts counter but from a distinct area within the premises where customers can compare different brands of car audios. Car audios are also available from retailers who specialise in their sale and installation, and from motor parts stockists. In other words, the sale of car audio equipment is not such an integral part of new car sales and service that the public will see it as such.

14. The Full Federal Court in Woolworths explored the question of reversed onus under the new legislation in some detail. In Torpedoes Sportswear Pty Limited v Thorpedo Enterprises Pty Limited [2003] FCA 901 (27 August 2003), a very recent case before a single judge of the Federal Court, Bennett J dismissed the appeal, finding that the appellant had not adduced any convincing evidence to support its opposition case. Citing Woolworths, she observed at paragraph 129:

    In oppositions (and appeals from them) the question of onus is particularly important.

15. The opponent's evidence relating to how the trade marks in question might cause deception and confusion of the public, in being used in relation to closely related goods and services, originates solely from Mr Altomonte himself. As the applicant has observed, he is a very interested party in the proceedings. There is no independent evidence drawn from prospective customers in the market. The opponent has not discharged the onus upon it in terms of sections 33 and 55 to establish that its services are closely related to the goods of the registration which it opposes.

16. French J, in Woolworths, at paragraph 40, said:

    In the end there is one practical judgment to be made. Whether any resemblance between different trade marks for goods and services renders them deceptively similar will depend upon the nature and degree of that resemblance and the closeness of the relationship between the services and the goods in question. It will not always be necessary to dissect that judgment into discrete and independent conclusions about the resemblance of marks and the relationship of goods and services.

17. Here, the trade marks in question are to some degree deceptively similar, but based in different market places. And the opponent has not established that the goods and services in question are closely related. Accordingly, the ground of opposition under section 44 has not been established.

Section 60 - trade mark with a reputation in Australia

1. To satisfy section 60, an opponent must demonstrate that, at the time of filing of the opposed application, it had a reputation in a substantially identical or deceptively similar trade mark, such that use of the applicant's trade mark would likely cause the public to be deceived or confused. The opponent's trade mark need not be subject of an application or registration, or used in relation to similar goods or closely related services, in order to be relied upon under this section.

2. Ms Baird, for the opponent, argued that its evidence clearly demonstrated the substantial reputation built up by the opponent in its ALTO trade mark over many years. She submitted that this reputation extended to the supply and installation of the goods of interest to the applicant. Mr Skelly argued in response that it is not in fact possible to gauge from the evidence the size of this component of the opponent's business, relative to its core business, being vehicle sales.

3. I find that the opponent has not met its burden of proof under the section. Its evidence has left me in no doubt that it does indeed have a significance presence in its field. However, the opponent has not established that it had a reputation, at the relevant date, sufficient to create in the public mind the critical leap of association that would lead the applicant's customers to believe its audio goods originated from a company that primarily deals in new cars.

4. I find the ground of opposition in terms of section 60 to be unsuccessful.

Section 42 - use of trade mark contrary to law

1. Subsection 42(b) of the Act provides that an application for the registration of a trade mark must be rejected if its use would be contrary to law. Ms Baird submitted that the applicant's use of its trade mark on the goods in its application would be contrary to law under section 42, because such use would contravene section 52 of the Trade Practices Act 1974 (the TPA). Section 52 of the TPA provides:

   (1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

1. Ms Baird cited Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177, Equity Access Pty Limited v Westpac Banking Corporation (1989) 16 IPR 431 (Equity Access), and S&I Publishing Pty Limted v Australian Surf Lifesaver Pty Limited (1998) 168 ALR 396. She quoted from these cases several principles to be applied in determining whether a breach of the TPA has occurred. These included that, for conduct to be misleading or deceptive in terms of the TPA, it must convey a misrepresentation. Further, there must be a real or a not remote chance or possibility of the relevant consumers being misled or deceived. In addition, section 52 is not confined to conduct which is intended to mislead or deceive. A corporation that acts honestly and reasonable may nonetheless engage in conduct that is likely to mislead or deceive.

2. A finding under section 42 of the Trade Marks Act 1995 requires, in effect, two separate, consecutive findings to be made. Only the second of these is within the Registrar's actual jurisdiction. The first is, to quote Madgwick J in Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, at paragraph 22, merely an "expression of an opinion upon a hypothesis". However, the threshold to be met under section 52 of the TPA is higher than that set by the Act. Shanahan's Australian Law of Trade Marks and Passing Off, 3^rd Edition, 2003 at page 598 states: "Misleading conduct does not merely cause confusion; it actually directs a person towards the wrong choice". In Equity Access, Hill J quotes at paragraph 77, an earlier summary by Lockhart J:

   Section 52 is not concerned with conduct where the risk of infringement is remote. The risk must be a real risk in a practical sense and in all the circumstances.

3. I have found above that the opponent has not made its case in terms of sections 44 and 60. It therefore follows that its case must also fail in terms of section 42.

Decision

1. I have found that the opponent has not succeeded under any of the grounds pursued at the hearing. For completeness, and as I have no basis to be satisfied that the other grounds raised in the notice of opposition have been made out, I find those grounds also to be unsuccessful. Trade mark application number 869909 may therefore proceed to registration one month from the date of this decision. If the Registrar has been served with notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued.

Costs

1. Both sides have claimed their costs in the opposition. I award costs in these matters to follow the event, against the unsuccessful opponent, Alto Group Pty Ltd.

Claudia Murray

Hearing Officer

Trade Marks Hearings

27 January 2004