American Airlines, Inc. v Member Advantage Pty Ltd

[2011] ATMO 13

TRADE MARKS ACT 1995

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

Re:Opposition by American Airlines, Inc. to registration of trade mark application 1176912 (35) - Member ADVANTAGE & Device - filed in the name of Member Advantage Pty Ltd.

Delegate:

Michael Kirov

Representation:

Opponent: Eric Ziehlke of Chrysiliou IP

Applicant: Joseph Kelly of APESMA Lawyers, assisted by Cheryl Patten, General Manager of the Applicant

Decision:

2011 ATMO 11

Section 52 opposition: sections 42(b), 44 and 60 pressed – trade marks not deceptively similar – use not likely to mislead, deceive or cause confusion –opposition not established. Costs awarded against the Opponent.

Background

1. This is an opposition brought by American Airlines, Inc. (“the Opponent”) pursuant to s 52 of the Trade Marks Act 1995 (“the Act”) to registration of the trade mark subject of application number 1176912 in the name of Member Advantage Pty Ltd (“the Applicant”).

2.     Details of the opposed application are as follows:

Application Number:     1176912

Priority Date:                    18 May 2007  (“the Priority Date”)

Services:  (Class 35) Business organization and

management of discount services            (“the Services”)

Trade Mark:    (“the Trade Mark”)

3.     Acceptance of the application for registration was advertised on 20 September 2007.  The Opponent filed its Notice of Opposition (“the Notice”) on 18 December 2007 and the parties served and filed Evidence in Support, Evidence in Answer and Evidence in Reply as follows:

Evidence in Support

▪ Statutory Declaration by Bridget Blaise-Shamai made 15 April 2009, with Exhibits XX-1 to XX-12

Evidence in Answer

▪ Statutory Declaration by Cheryl Lee Patten made 18 November 2009, with Annexures CP 1 to CP 6

Evidence in Reply

▪ Statutory Declaration by Charles Sultan made 14 May 2010, with Annexures XY-1 to XY-7

4.     The evidence before me indicates the Applicant was incorporated in 1999 by the “Association of Professional Engineers, Scientists & Managers, Australia”, known more commonly as “APESMA”.  APESMA was formed in 1946 and claims to be “the largest national non profit organization representing professional employees” in Australia, with more than 25,000 members employed in both the public and private sectors as “engineers, scientists, managers, architects, IT professionals, pharmacists, veterinarians, surveyors, collieries staff and other professionals”.  APESMA provides various services and benefits directly to its members such as recruitment services, remuneration packaging advice, education services, insurance services and legal services, as well as access to discounts on goods and services provided by others in areas such as banking, entertainment, dining, accommodation and travel.

5.     The Applicant was apparently incorporated by APESMA in 1999 as a vehicle to extend access to the abovementioned services and benefits to “other professional organisations” which are not members of APESMA.  As of 2009 the Applicant offered such access to “over 450,000 professionals throughout Australia and New Zealand” via its website at < with client organisations each having their own dedicated webpage on the site accessed via a unique login.  Additionally, individual members can access available benefits and services via a “cobranded membership card”, which the evidence shows to be a credit card sized card issued by organisations or businesses including American Express, WeightWatchers, the Victorian Principals Association, Speech Pathology Australia, the Royal College of Nursing, Innovia Films and several others, which bear both the Trade Mark and the names or trade marks of the issuer of the card.

6.     The Opponent, according to its evidence, is “one of the world’s largest airlines” with a corporate history dating back more than 80 years.  Based in the United States, its market share amongst domestic U.S. airlines in 2007 was 18%, with some 37% of its more than 3,000 daily flights being on international routes, although none of these flights is to Australia.  The Opponent did however fly directly between the U.S. and Brisbane four times weekly from February 1990 to February 1992 and claims an ongoing association with Australian consumers through occasional Australian-themed articles in its in-flight magazine, through membership of its frequent flyer program and through a partnership arrangement with Qantas Airlines dating from 1999 involving “codeshare agreements, reciprocal frequent flyer programs and lounge access agreements”.  Relevantly to this opposition, in 1981 the Opponent “introduced the AADVANTAGE travel rewards program, a revolutionary marketing program to reward frequent flyers”, provided and promoted since then under trade marks containing or consisting of the element AADVANTAGE (“the AADVANTAGE trade marks”).

7.     At the heart of the current opposition is the claimed deceptive similarity of the Trade Mark to the AADVANTAGE trade marks which had been used and/or registered by the Opponent in Australia as at the Priority Date.

8.     I heard the matter as delegate of the Registrar of Trade Marks on 2 December 2010 in Canberra.  Joseph Kelly of APESMA Lawyers (assisted by Cheryl Patten, General Manager of the Applicant) appeared for the Applicant.  Eric Ziehlke of Chrysiliou IP appeared for the Opponent.  The parties’ oral submissions before me were also supplemented by written submissions filed and exchanged prior to the hearing.

Grounds of Opposition and Onus

9. The Notice lists a number of specific grounds corresponding to various provisions of the Act. By emailed letter sent 30 November 2010 (and copied to the Applicant’s attorneys), however, Mr Ziehlke indicated the Opponent would only be pressing the grounds in the Notice based on sections 42(b), 44 and 60 of the Act. These grounds are discussed below, where I have found it convenient to firstly consider ss 44 and 60 before turning to the ground based on s 42(b). I treat the remaining grounds listed in the Notice as abandoned.

10.   I proceed on the basis that the Opponent bears the onus of establishing one or more of the grounds of opposition pressed at the hearing on the balance of probabilities[1].

Discussion

[1] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599. See also Chocolaterie Guylian N.V. v Registrar of Trade Marks (2009) 82 IPR 13 at [22] to [26].

Section 44

11. The ground based on s 44 of the Act is indicated in the Notice as follows:

[The Trade Mark] is substantially identical with or deceptively similar to a trade mark registered by another person or whose registration is being sought by another person, in respect of similar services or closely related goods and the priority date of [the Trade Mark] is not earlier than the priority date for the registration of the other trade mark. Accordingly, the registration of [the Trade Mark] must be refused pursuant to the provisions of Section 44 of the Act.

12. Only s 44(2) of the Act is relevant to this ground and this is reproduced below:

Identical etc. trade marks

44(2) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of services (applicant's services) must be rejected if:

(a) the applicant's trade mark is substantially identical with, or deceptively similar to:

(i) a trade mark registered by another person in respect of similar services or closely related goods; or
(ii) a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and

(b) the priority date for the registration of the applicant's trade mark in respect of the applicant's services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

Note 1:  For deceptively similar see section 10.

Note 2:  For similar services see subsection 14(2).
Note 3:  For priority date see section 12.

13. The Opponent relies on 7 registrations of the AADVANTAGE trade marks for its s 44 ground (“the Opponent’s Registrations”). These are detailed below:

Regn No.	Priority Date	Trade Mark	Specification(s)
519305	15.9.89	Class: 39 Services rendered in the carriage or transport of passengers and freight by aeroplane and related or ancillary means of transport; and all other services nessarily (sic) connected with or ancillary to such transport including freight forwarding and storage, arranging of tours and travel information
702930	20.2.96	AADVANTAGE GOLD	Class: 39 Transportation of passengers by air, including providing a program of bonus flights for frequent travellers
702934	20.2.96	AADVANTAGE PLATINUM	Class: 39 Transportation of passengers by air, including providing a program of bonus flights for frequent travellers
721814	14.11.96	Class: 39 Services in relation to the transportation of passengers by air, inclusive of providing a program of bonus flights for frequent travellers
753045	1.12.97	AADVANTAGE EXECUTIVE PLATINUM	Class: 39 Transportation services, namely providing a program of bonus flights for frequent travellers
805290	27.8.99	AADVANTAGE	Class: 35 Promoting the goods and services of other by means of an incentive awards program, whereby purchase points are awarded for purchase made from vendor subscribers, which can then be rendered for merchandise and travel     Class: 39 Providing air transportation services featuring a program of bonus flights for frequent travellers
826664	7.3.00	Class: 35 Promoting the goods and services of other by means of an incentive awards program, whereby purchase points are awarded for purchases made from vendor subscribers, which can then be redeemed for merchandise and travel     Class: 39 Transportation of passengers and cargo; travel information and reservation services

14. For s 44 to apply at all, the priority dates of the registrations relied upon must be earlier than the 18 May 2007 priority date of the opposed application. This requirement is met by all of the Opponent’s Registrations.

15. To succeed under its s 44 ground it is sufficient if the Opponent establishes on the balance of probabilities that:

• the opposed application covers “similar services”[2] to those covered by one or more of the Opponent’s Registrations; and

• the Trade Mark is at least “deceptively similar”[3] to one or more of the Opponent’s relevant trade marks detailed above.

[2] As defined in s 14(2) of the Act, namely the same services and/or services of the same description.

[3] As defined in s 10 of the Act, which provides 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”.

16.   In Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411 (“the Woolworths Metro case”) French J (as he then was) noted[4] that these two issues were not necessarily to be considered in isolation, stating at [45]:

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. Consistently with that proposition, the registrar or a judge on appeal from the registrar could determine in a particular case that, given the limited degree of resemblance between the relevant marks he or she could not be satisfied, no matter how closely related the goods and services concerned, that the use of the applicant's marks would be likely to deceive or to cause confusion.

[4] In the context of closely related goods and services, but relevant also in the context of “similar services” as defined in s 14(2) of the Act.

17.   Mr Ziehlke’s submissions focused principally on the Opponent’s registration 805290 AADVANTAGE in Classes 35 and 39, because on the face of it the Trade Mark more closely resembled this registered mark than it did any of the other registered marks relied upon. Moreover, it was the Class 35 services covered by registration 805290 to which, he argued, the Services were most similar. In fact reliance on the other nominated registrations is arguably redundant in this case, since if the Opponent were to succeed based solely on registration 805290 then it would have the result it seeks. Conversely, if its s 44 ground based on registration 805290 were to fail, then reliance on the other six individual registrations would not advance its case any further.

18.   That said, Mr Ziehlke did ask me to note that the Opponent’s Registrations formed “a related portfolio of marks”, several of which contained the element AADVANTAGE in company with other words, and which the evidence showed would have been exposed to Australian consumers in varying degrees since 1981.  Referring to the well known words regarding the comparison of trade marks of Parker J (as he then was) in Pianotist Co’s Application (1906) 23 RPC 774 (at 777), he argued this should be a relevant “surrounding circumstance” to take into account when considering whether the Trade Mark was deceptively similar to the AADVANTAGE mark subject of registration 805290.

19.   Are the Services, namely “Business organization and management of discount services”, similar to the Class 35 services covered by registration 805290?  Mr Ziehlke did not make any submissions regarding the services described as “business organization”. My view is that such services are not on the face of it similar in the sense required by s 44(2) to the Class 35 services of registration 805290, nor indeed to any of the services in Classes 35 or 39 covered by the Opponent’s Registrations. Accordingly the opposition, to the extent that it is based on s 44(2), is not established in relation to the services described as “business organization”.

20.   As for the services described as “management of discount services”, Mr Ziehlke submitted that:

The [AADVANTAGE] mark is specified in Class 35 for “Promoting the goods and services of other (sic) by means of an incentive awards program, whereby purchase points are awarded for purchase (sic) made from vendor subscribers, which can then be rendered for merchandise and travel”.  It is submitted that the provision (sic) of “discount services” under the specified services of the [Trade] Mark are (sic) an inherent part of an incentive program referred to in the specification of [registration 805290].  Indeed, as discussed in detail below[5], the Applicant is in effect offering travel related discount services under the [Trade] Mark.  The fact that the [Trade] Mark includes the word MEMBER clearly refers to membership of such a program.  It is submitted that under the accepted criteria of Re Jellinek’s Application (1948) 63 RPC 59 the services of the respective marks have similar nature, uses and trade channels. It is therefore submitted that the services of the [Trade] Mark in Class 35 are similar to the services of the [AADVANTAGE] mark in Class 35.

[5] Mr Ziehlke was referring here to his later written submissions on the issue of deceptive similarity.

21.   Mr Kelly’s written submission on this issue was that:

It is submitted that the Applicant and the Opponent operate in different markets such that no deception or confusion would be likely to occur.  While the services provided by [the Applicant] touch on travel related services, this is vastly different to offering a travel rewards/frequent flyer program.  Air travel (being the Opponent’s primary activity) and management of discounted services (being the Applicant’s primary activity) are not services of the same description and as such should be differentiated.

22. Mr Kelly’s submission is however not relevant to what I must consider under s 44. It is of little account what activities the parties may be known for, or for what services they may have used their respective trade marks in the past, or indeed whether the parties’ respective marks have been used at all, since the specifications of the opposed application and of registration 805290 are not restricted in any way to possibly reflect the (arguably) relevant differences. This was specifically highlighted by French J in point (v) of his re-statement in the Woolworths Metro case (at [50]) of the matters to be considered under the Act when assessing deceptive similarity:

In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-5, which concerned the 1905 Act, Kitto J set out a number of propositions which have frequently been quoted and applied to the 1955 Act. The essential elements of those propositions continue to apply to the issue of deceptive similarity under the 1995 Act. Applied also to service marks and absent the imposition of an onus upon the applicant they may be restated as follows:

(i) To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring.  A mere possibility is not sufficient.

(ii) A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source.  It is enough if the ordinary person entertains a reasonable doubt.  It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.

(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.

(iv) The rights of the parties are to be determined as at the date of the application.

(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.

In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v The Bali Company Inc (1973) 129 CLR 353 at 362:

“...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion.”

23.   In E & J Gallo Winery v Lion Nathan Australia Pty Limited [2009] FCAFC 27 (29.07.09) the Full Federal Court (“FFC”) was considering the words “goods of the same description” in s 14(1) of the Act and I believe the Court’s guidance on the proper interpretation of this term is equally applicable to the term “services of the same description” used in s 14(2)[6].  In particular, the FFC emphasised (at [71]) its agreement with Burchett J in Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 26 IPR 246 that:

…the expression “goods of the same description” is generally to be understood in such a sense that, if two different items are held not to fall within the expression, their sale under the same mark by different companies is not likely to lead to confusion or deception.  (My emphasis)

[6] I note the FFC’s decision was appealed to the High Court (reported as (2010) 265 ALR 645 and 86 IPR 224) but that it was not necessary for the High Court to address this issue.

24.   In my view there is merit in Mr Ziehlke’s above submission that “management of discount services”, while clearly not the same services, might (at least notionally) be considered services of the same description as the services “promoting the goods and services of other by means of an incentive awards program, whereby purchase points are awarded for purchase made from vendor subscribers, which can then be rendered for merchandise and travel” covered by registration 805290.  That is to say, if provided under the same mark by two unrelated parties (whether or not those parties were direct competitors), I would hesitate to contend that their provision was “not likely to lead to confusion” of the kind described by French J in point (ii) of his re-statement of the principles relevant to assessing deceptive similarity under the Act[7].

[7] See paragraph 21 above.

25.   In the matter before me, of course, the     mark is by no means the same as the Opponent’s AADVANTAGE mark.  Moreover the likelihood of deception or confusion, which is the essential issue I must determine, will to a large extent be contingent on the inherent distinctiveness of the element(s) common to the marks under comparison in any event, in this case being the element ADVANTAGE.  I thus now turn to the issue of whether the Trade Mark is “deceptively similar” to the registered AADVANTAGE mark in terms of s 10 of the Act.

26.   It is well established that in order to assess deceptive similarity trade marks should not be compared side by side[8].  Rather, I should attempt to assess the effect or impression produced on the minds of potential consumers of the Services, who know of the AADVANTAGE trade mark (and perhaps have an imperfect recollection of it), when they encounter such services bearing the Trade Mark.  In this regard, as highlighted by French J in point (ii) of paragraph 50 in the Woolworths Metro case quoted above, it is enough if the person of ordinary intelligence and memory would be caused to wonder, or be left in doubt, about whether the services in question come from the same source.

[8] Australian Woollen Mills Ltd v F.S. Walton & Co (1937) 58 CLR 641 (at 658); Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407 (at 415)

27.   Mr Ziehlke’s written submissions concerning deceptive similarity began by arguing regard should not be had to the presence of the element MEMBER in the Trade Mark:

It is submitted that in the context of discount and incentive schemes which generally involve membership. (sic)  Because both Applicant and Opponent provide programs directed to members, the word MEMBER is descriptive of the people to whom the services are directed for both Opponent and Applicant.  Thus, the word MEMBER can therefore be disregarded for comparison purposes.

28.   He continued:

It is submitted that when the [Trade] Mark is used aurally (sic) or used in a written sentence, the distinctive element is ADVANTAGE only.  It is submitted that the word ADVANTAGE and AADVANTAGE are verbally indistinguishable.

29.   Highlighting that the Opponent’s Registrations “are specified variously in Classes 35 and 39 in relation to bonus and incentive programs in Class 35 and for transportation services in Class 39 which refer to bonus or incentive programs”, he concluded:

These registered trade marks form part of a portfolio of AADVANTAGE marks.  It is submitted that if the Applicant uses the ADVANTAGE mark in company with a generic word such as MEMBER, this could easily seen (sic) by potential consumers as constituting part of the trade mark portfolio of AADVANTAGE marks owned by the Opponent.

…

It is submitted that the [Trade] Mark is deceptively similar for similar services to the [AADVANTAGE mark subject of registration 805290] and by extension to the other [registered] AADVANTAGE marks in the trade mark portfolio of the Opponent …and that the Opponent should succeed under Section 44 of the Act.

30.   I mention that Mr Ziehlke made no submissions regarding the presence of the device element in the Trade Mark other than as indicated in paragraph 28 above.

31.   For the Applicant, Mr Kelly highlighted that the Applicant had “been managing discount services, including third-party travel services (but not air travel)”, under the Trade Mark since 1998, yet the Opponent had led no evidence that there had been any actual deception or confusion between the parties’ trade marks.  Referring to French J’s words in the Woolworths Metro case (quoted in paragraph 22 above), he stressed that the Opponent must satisfy the Registrar that there was a real tangible danger of deception or confusion occurring, not a mere possibility.

32.   He pointed to the fact that the Opponent’s AADVANTAGE marks featured the initial letters “AA”, standing for the words “American Airlines”, whereas the Trade Mark “incorporates a unique design and the name of [the Applicant]”.  The only “similarity” between the marks was the element ADVANTAGE and, not only was this element “significantly modified” in the Opponent’s marks by the initial double “A”, but the word “advantage” itself was “sufficiently generic to suggest that no importance be attached to this common feature”.

33.   In relation to this last point, I do accept that the word “advantage” is on the face of it somewhat descriptive, certainly somewhat laudatory, in relation to relevant services in Classes 35 and 39.  Moreover, the Register indicates registered trade marks containing the word “advantage” and covering services in the nature of incentive or loyalty programs are fairly common, with there being several such marks amongst the more than one hundred currently registered marks in Class 35 alone which contain the word “advantage”.  The majority of these are, of course, owned by parties other than the Opponent and include, by way of example:

·612758 ADVANTAGE PLUS owned by James Hardie Technology Limited (“Frequent buyer programme for purchasers of building materials”)

·875818 ALCHEMIST ADVANTAGE CLUB owned by AHG Technologies (“Vouchers for sales incentive programs, customer loyalty programs, and customer rewards schemes; membership cards for sales incentive programs, customer loyalty programs, and customer reward schemes”)

·1098656  owned by ANZ Banking Group Ltd (“Loyalty rewards services”)

·1119305 owned by Livingstone International Pty Ltd (“Customer reward programs and schemes; services relating to the supply of benefits in connection with reward programs and schemes; operation and administration of loyalty marketing and other sales and promotional incentive and loyalty schemes; sales promotion through reward programs; reward program including discounts, complimentary goods, complimentary services, additional reward points and expenses for holiday travel”)

·1120508    owned by AGL Energy Limited (“operation of customer loyalty programs and incentive schemes”); and

·1268502 ADVANTAGE YOU owned by Sonova Holding AG (“sales promotion in the form of customer retention by the medium of benefits and bonuses”)

34.   While the state of the Register can provide no more than an indication of what trade marks may actually be in use for particular goods or services, the existence of these and several other similar third party registrations does on the face of it suggest the apparently laudatory word “advantage” is common to the trade in relation to customer loyalty or incentive schemes.  In this regard I believe the following words of Burchett J in Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 (at 511-512), where his Honour was assessing the deceptive similarity of the trade marks VOGUE and EUROVOGUE, are apt:

At the same time, it should be borne in mind that ‘VOGUE’ is neither a made-up word nor a word wholly without any direct application, in the ordinary use of language, to the goods in question [clothing].  A trader is not entitled to monopolise such a word, denying its use entirely to other traders.  Deceptive or confusing use is barred by the applicant’s registration, but the Court should be careful not to shut out inappropriately other traders from the fair use of the language in ways that will not in reality deceive or confuse.

35.   Accordingly, where an element shared by trade marks under comparison is also common to the trade generally its presence in both marks must be discounted somewhat in assessing deceptive similarity.  Given the apparently low inherent distinctiveness of the common element ADVANTAGE, the various differences between the parties’ marks highlighted by Mr Kelly may correspondingly assume greater significance amongst the relevant public.  In this regard I consider the fact that the word “advantage” is misspelt as “aadvantage” in the Opponent’s trade mark(s) is an important distinguishing factor, particularly as the misspelling occurs at the beginning and given also the extreme rarity of words in English which commence with the letters “aa”[9].

[9] Cf London Lubricants (1920) Ltd’s Appn (1925) 42 RPC 264, where it was said that in comparing trade marks the first words or syllables of the marks are generally the most important for the purposes of distinguishing them.

36.   Further, the parties’ marks must be considered in their entirety.  As it was put many years ago in Clark v Sharp (1898) 15 RPC 141 (at 146):

One must bear in mind the points of resemblance and the points of dissimilarity, attaching fair weight and importance to all, but remembering that the ultimate solution is to be arrived at, not by adding up and comparing the results of such matters, but by judging the effect of the respective wholes.

37.   I thus think the presence of the distinctive device element in the Trade Mark is an important additional distinguishing factor in this case, whether or not I were to accept Mr Ziehlke’s submission that the element MEMBER appearing in the Trade Mark should be disregarded.  Indeed, I note Mr Kelly’s oral submission that not only the word “member” alone, but even the combined words “member advantage” were effectively descriptive in relation to the Services, but that their combination with the device element nevertheless rendered the Trade Mark as a whole distinctive and readily distinguishable from the marks of the Opponent’s Registrations.

38.   The final matter Mr Kelly raised was the absence from the Opponent’s evidence of any instances of actual confusion, notwithstanding the Applicant’s evidence in answer discloses APESMA had initially used the words “Member Advantage” as a business name from 1998 before incorporating the Applicant under that name in 1999 and that the Applicant had continuously used the words for the Services since then.  Mr Kelly himself, however, argued that the parties’ evidence indicates their respective services have hitherto been provided through essentially different channels.  Although Mr Ziehlke took issue with this, I accordingly do not think the absence of evidence of confusion is necessarily significant in this case.

39. When all the foregoing matters raised by Mr Ziehlke and Mr Kelly are weighed up and when I consider the parties’ marks as wholes and attempt to assess their likely effect or impression in the minds of relevant consumers I am not satisfied that deception or confusion amongst a significant number of people is likely. I do not on balance believe there is a real tangible danger of a number of persons being left in doubt or caused to wonder whether the parties’ services provided under their respective trade marks come from the same source. Accordingly, my conclusion is that the Trade Mark is not deceptively similar to the Opponent’s AADVANTAGE mark, nor of course to any of the other registered AADVANTAGE marks detailed in paragraph 13 above. The s 44 ground of opposition is therefore not established.

Section 60

40. The ground based on s 60 is indicated in the Notice as follows:

Another trade mark had acquired a reputation in Australia before the priority date of [the Trade Mark] and because of the reputation of that other trade mark, the use of [the Trade Mark] would be likely to deceive or cause confusion. Accordingly, the registration of [the Trade Mark] must be refused pursuant to Section 60 of the Act.

41. Section 60 of the Act is reproduced below:

Trade mark similar to trade mark that has acquired a reputation in Australia

60. The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a) another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

(b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

Note:  For priority date see section 12.

42.   Mr Ziehlke identified the element AADVANTAGE, as it appears in the “portfolio” of marks in the Opponent’s Registrations set out in paragraph 13 above, as the “other trade mark” which the Opponent claims had the relevant reputation in Australia as at the Priority Date.

43.   The initial letters of this element appear in conjunction with the device of an eagle in the form  (“the AA Device”) in some of these registered marks, of course, and as plain capital letters in others. The examples in evidence of the Opponent’s use of the various marks indicate both forms are in fact employed. I thus confirm I am effectively treating both variants of the mark (to which I will refer hereafter simply as “the AADVANTAGE mark”) as a single mark in the following analysis and will consider the Opponent’s s 60 ground on this basis.

44.   As Mr Kelly pointed out, nevertheless, the Opponent’s evidence indicates the AA Device in its own right is one of the Opponent’s principal trade marks in respect of the transportation services it primarily provides.  Indeed, either the AA Device or the eagle device on its own also features in the majority of the Opponent’s registered marks in Class 39 covering transportation services and services ancillary thereto (such as transportation reservation services, providing travel information, freight forwarding services and similar) other than its loyalty program.  Thus, to the extent that the Opponent claims a relevant reputation for its loyalty program in the element [10], the reputation of the AA Device alone would presumably be all the greater.  On the face of it, therefore, the absence of the AA Device (or indeed of the initial double “A” of the plain word mark, as the case may be) from the Trade Mark is a relevant factor to take into account in assessing whether its use for the Services is likely to cause deception or confusion.  As Mr Kelly put it:

The Opponent’s mark relies, as its central feature, on a striking ‘AA’ design which is a mirror of the mark used for American Airlines.  The ‘AA’ at the start of ‘AAdvantage’ (which also includes a stylized design of an eagle) serves to imprint the point of origin of the ‘AAdvantage’ product.  It is the inclusion of the established American Airlines mark within the word ‘AAdvantage’ which makes the AAdvantage mark unique.  None of these features (the ‘AA’ or the eagle design) are in any way incorporated or approximated into the Applicant’s [trade mark].

[10] As opposed to the element AADVANTAGE without the eagle device, although in principle the same point appears just as valid in relation to the mark without the eagle device in any event.

45.   Mr Kelly’s observation has all the more force, I think, when the apparently low inherent distinctiveness of the word “advantage” alone in relation to customer loyalty and incentive schemes (as discussed in paragraphs 33 to 35 above) is taken into account.

46. However, the most significant difficulty the Opponent faces in establishing that the reputation of the AADVANTAGE mark was such amongst the Australian public as at the Priority Date as to bring s 60 into play is, to my mind, the fact that the Opponent’s only flights to Australia were to Brisbane, for two years only, some 20 years ago. Moreover, as pointed out in the Applicant’s evidence and conceded in the Opponent’s evidence in reply, the Opponent does not even maintain an office in Australia. The Opponent thus essentially relies in its evidence on the “codeshare agreement” it has had with Qantas Airlines since 1989, on Australian membership of its AADVANTAGE branded loyalty program and on the occasional Australian-themed article published in its in-flight magazines[11] over the years.

[11] The Opponent produces different magazines for its economy and first class passengers.

47.   As to the “codeshare agreement” with Qantas, it is not apparent to me from the evidence how or to what degree this might contribute to the reputation of the AADVANTAGE mark amongst Australian consumers.  Indeed, it appears to have principal relevance to American travelers, since all the Blaise-Shamai declaration says of the agreement is that it:

began in 1989 with what was, at the time, the world’s first commercial codeshare agreement.  [The Opponent] codeshares on Qantas transpacific flights between Australia and New Zealand, as well as Qantas flights within and between select destinations in Australia and New Zealand.  Through its codeshare agreement with Qantas, [the Opponent] offers flights to Australia via (sic) Adelaide, Brisbane, Cairns, Melbourne, Perth and Sydney.

48.   I likewise find the evidence of Ms Blaise-Shamai regarding Australian membership of the Opponent’s AADVANTAGE branded loyalty scheme leaves too many questions unanswered to assess what reputation the AADVANTAGE mark may have had amongst Australians as at the Priority Date.  She says, for example, that “there are currently over 80,000 AADVANTAGE members based in Australia”.  It is unclear to me how many of these might be Australians and how many might be Americans temporarily “based in Australia”.  Moreover, it is left unsaid how many of this number actively sought membership, given:

Membership was [initially] seeded by searching [the Opponent’s] SABRE computer reservations system for recurring phone numbers.  The 130,000 most frequent flyers, together with an additional 60,000 members of [the Opponent’s] Admirals Club, were pre-enrolled and sent letters with their new account numbers.

49.   Further, although she explains that “based on the amount and price of travel booked” members “are designated AADVANTAGE Gold, AADVANTAGE Platinum and AADVANTAGE Executive Platinum elite” (with correspondingly higher privileges), there is no indication as to whether any Australians fall in these (or any other) categories of membership.  Indeed, I am left wondering whether those Australians who are members have had significant exposure to the AADVANTAGE mark at all, since membership is not limited to frequent flyers but also extends to (possibly infrequent) customers of a number of other businesses[12].  In this regard Ms Blaise-Shamai says:

Because not everyone is a frequent traveler, miles can also be earned through non travel-related partners, including assorted financial partners, such as Chase, Citi, Fidelity Investments, Liberty Mutual, TD Ameritrade and Wells Fargo, and retail partners, such as, DirecTv, FTD, Harry and David, Netflix, Office Depot, Samsonite and USA Today.

[12] Essentially American-based businesses, I believe, since the majority are unknown to me.

50.   The examples of the Opponent’s in-flight magazines in evidence show articles appearing every year or two between 1999 and 2007 with titles such as Bottoms Up (on Australian wines), All Ashore (discussing Australian cruises), The Sweetheart of Sydney (in which an actor named Naomi Watts reminisces about growing up in Sydney), The 22 Year-old Itch (in which an actor named Kate Bosworth discusses her experience of Sydney while shooting the film Superman Returns), as well as articles on topics including Ningaloo Reef, the Australian Motorcycle Grand Prix, the “top five hotels in Australia, New Zealand and the South Pacific” and similar.  The magazines also include advertising featuring the AADVANTAGE mark for the Opponent’s frequent flyer loyalty scheme.  However, it appears to me that these articles are essentially aimed at American consumers.  There is no indication in the Opponent’s evidence as to how many Australians may have flown with the Opponent and had the opportunity to even see these magazines.  Given the Opponent only operated flights to Brisbane from February 1990 to February 1992 I am thus unable to place any significant weight on this evidence.

51.   I mention too that there are no figures given for any revenue generated in Australia by, or by Australian members of, the AADVANTAGE branded loyalty program.  I nevertheless assume any such revenue would be quite low, given the Opponent’s claimed worldwide revenue from the program between the years 1998 and 2007 was only around US$12,000,000, or in the order of US$1,200,000 per annum.  On this matter Ms Blaise-Shamai simply says:

As a result of its extensive use around the world of its family of AADVANTAGE trade marks over many years, [the Opponent’s] revenues in respect to its AADVANTAGE travel awards programs totals many millions of dollars.  For example, worldwide revenues under the AADVANTAGE travel awards program between the years 1998 and 2007 were in excess of US$12,000,000.

52. To conclude, I am not satisfied the AADVANTAGE mark enjoyed the kind of reputation contemplated by s 60 amongst a significant number of Australian consumers as at the Priority Date. Even were I so satisfied, given the low inherent distinctiveness of the word “advantage” in relation to loyalty schemes and the obvious differences between the parties’ marks when considered as wholes, I am not satisfied use of the Trade Mark for any of the Services would be likely to deceive, or cause confusion amongst, a significant number of Australian consumers. The Opponent has accordingly not established its ground of opposition under s 60.

Section 42(b)

53. The ground based on s 42(b) is indicated in the Notice as follows:

Use of [the Trade Mark] by the Applicant would be contrary to law. Accordingly, the registration of [the Trade Mark] must be refused pursuant to the provisions of Section 42 of the Act.

54. Section 42(b) of the Act is reproduced below:

Trade mark scandalous or its use contrary to law

An application for the registration of a trade mark must be rejected if:

(a) …

(b) its use would be contrary to law.

55. Mr Ziehlke argued use of the Trade Mark would be contrary to law under section 42(b) of the Act because it would constitute “misleading and (sic) deceptive conduct” under s 52 of the Trade Practices Act 1974 (“the TPA”), “false representations as to sponsorship, approval or affiliation contrary to s 53 of the TPA and would in addition constitute the common law tort of passing off. The relevant TPA sections are reproduced below:

s.52       Misleading or deceptive conduct

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

(2)  Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).

s.53 False or misleading representations

A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:

(c)  represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;

(d)  represent that the corporation has a sponsorship, approval or affiliation it does not have.

56. Mr Ziehlke acknowledged in his submission that the above provisions and the tort of passing off require a likelihood of deception amongst Australian consumers as to the true origin of the Services or their connection to the Opponent, rather than mere confusion or simply being caused to wonder as is the case with s 60 of the Act. The deception need not have been intended, of course, and such is not necessarily alleged here. Mr Ziehlke’s written submission was nevertheless that:

…the deceptive similarity of the [Trade Mark] as compared with the Opponent’s marks, the extensive reputation of the Opponent’s marks and the overlapping of trade channels based on [the Opponent’s evidence] provides a “likelihood of deception” amongst consumers as to the true origin of the services under the [Trade Mark].  As a result, these activities are likely to constitute misleading and deceptive conduct contrary to Section 52 of the [TPA].

It is further submitted that based on the evidence of the activities of the Opponent and the Applicant under their respective marks as set out in [the evidence], the Applicant has been misappropriating the reputation of the Opponent and therefore infringing the provisions of Section 53 of the [TPA] together with the common law tort of passing off.

57. I have already found that use of the Trade Mark for the Services is unlikely to deceive or cause confusion in terms of s 60 of the Act. There are several decided cases confirming that more is required to establish a likelihood of misleading or deceptive conduct (or, by extension, conduct amounting to the making of false representations) than is the case with trade marks likely to deceive or cause confusion under s 60. In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 1a IPR 684, by way of example, Gibbs CJ noted with respect to s 52 of the TPA (at 688):

In McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd (1980) 33 ALR 394 it was rightly held by Smithers J and by Fisher J that to prove a breach of s 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source, and that Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; 1A IPR 465, a decision on the Trade Marks Act 1905 (Cth) as amended, is distinguishable.

58. I consider the reasoning set out earlier in rejecting the Opponent’s case based on s 60 of the Act is no less applicable to its claims that the Applicant’s use of the Trade Mark would amount to passing off or would breach ss 52 or 53 of the TPA. That is to say, given the low inherent distinctiveness of the word “advantage” in the context of loyalty schemes, given the various other significant differences between the marks when compared as wholes and in the absence of any evidence before me of actual deception, I am not satisfied that the reputation of the Opponent’s relevant trade marks, whether considered individually or in terms of their collective reputation, was such that use of the Trade Mark for the Services would constitute passing off, would be likely to mislead or deceive, or would amount to the representations alleged. I thus find that the Opponent has not established its ground under section 42(b) of the Act.

Decision

59. Section 55 of the Act provides:

Unless the proceedings are discontinued or dismissed, the Registrar

must, at the end, decide:

(a)  to refuse to register the trade mark; or

(b)  to register the trade mark (with or without conditions or  limitations) in respect of the goods and/or services then

specified in the application;

having regard to the extent (if any) to which any ground on which the

application was opposed has been established.

Note: For limitations see section 6.

60. I have found the Opponent has not established any of the grounds it raised pursuant to ss 42(b), 44 and 60 of the Act. The trade mark application may accordingly proceed to registration one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued.

Costs

61.   Both parties requested an award of costs in their favour.  As the successful party, the Applicant is entitled to its costs and I accordingly award costs against the Opponent as per Schedule 8 of the Trade Marks Regulations 1995.

Michael Kirov

Hearing Officer

Trade Marks Hearings

4 February 2011