Aqua Smiles Dental Pty Ltd

[2019] ATMO 37

TRADE MARKS ACT 1995

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

Re:Proposed revocation of acceptance of trade mark application numbers 1941302(44) and 1941309(44) – AQUA SMILES and AQUA SMILES Logo – in the name of Aqua Smiles Dental Pty Ltd.

Delegate:

Debrett G. Lyons

Representation:

Applicant: Written submissions by Danaher Legal

Decision:

2019 ATMO 37

Trade Marks Act 1995: proceedings under sections 38 and 44 of the Act – whether reasonable to revoke acceptances – acceptances revoked – applications returned to examination.

Background

1. In these proceedings under the Trade Marks Act 1995 (‘the Act’) Aqua Smiles Dental Pty Ltd. (‘the Applicant’) has applied for the registration of the trade marks which appear below in class 44 for “dental surgery services”.

Application No: 1941302

Priority Date:  26 July 2018

Trade Mark:  AQUA SMILES

(‘the Word Mark’)

Application No: 1941309

Priority Date:  26 July 2018

Trade Mark:  

(‘the Logo Mark’)

1. The trade marks were examined as mandated by section 31 of the Act and accepted by a delegate of the Registrar of Trade Marks after which they were advertised as accepted for possible registration in the Australian Official Journal of Trade Marks.

2. Thereafter, as a result of correspondence from a third party (‘Third Party’), a delegate of the Registrar of Trade Marks issued Notices dated 21 September 2018 proposing to revoke acceptance of the trade marks under section 44 of the Act. The Notices appended details of earlier registered and pending trade marks which I will discuss, below.

3. On 28 October 2018 the Applicant requested a hearing by way of written submissions and supporting evidence.  As a delegate of the Registrar of Trade Marks I wrote to the Applicant requiring those submissions and that evidence by 19 December 2018.  On that day I received submissions prepared by R J Maguire of counsel, instructed by Danaher Legal, together with a statutory declaration of Mimi Huynh, company secretary of the Applicant, made on 19 December 2018 (‘Huynh’).  My decision is based on that material and the earlier Office records.

Section 38

1. Section 38 of the Act relevantly provides:

   38Revocation of acceptance

   (1)Before a trade mark is registered, the Registrar may revoke the acceptance of the application for registration of the trade mark if he or she is satisfied that:

   (a)the application should not have been accepted, taking account of all the circumstances that existed when the application was accepted (whether or not the Registrar knew then of their existence); and

   (b)it is reasonable to revoke the acceptance, taking account of all the circumstances.

2. In Globalscope Pty Ltd[1] the Registrar’s delegate set out some of the factors involved in considerations under section 38 of the Act:

   [1] [2016] ATMO 14 at [12]-[21].

   As a preliminary matter, I note that the application of section 38 is discretionary (that is: “...the Registrar may revoke the acceptance...”). That said, it would be difficult to imagine a scenario where, the requirements of both limbs having been satisfied, some other circumstance meant acceptance of the trade mark would not be revoked (given the provisions themselves take into account a consideration of “all the circumstances”).

   Most importantly, the provisions of section 38 require that both limbs of the test (i.e. ss 1(a) and 1(b)) must be satisfied before the Registrar of Trade Marks may revoke acceptance. For the avoidance of doubt, I would also add that these elements must be satisfied before the Registrar issues a letter of intention to revoke.

   […]

   The current section 38 was introduced via amendments to the Act in 2006. The Explanatory Memorandum to the Intellectual Property Laws Amendment Bill 2006 noted that the previous section 38 had been interpreted too narrowly, with the result that the protection of the public interest in keeping invalidly accepted trade marks from becoming registered had not been fully realized. As a result, the Explanatory Memorandum provided […]:

   Paragraph 38(1)(a) clarifies that the Registrar is able to take account of any circumstance that existed which should have prevented acceptance. It is not necessary that the Registrar knew or was in a position to know of the existence of the circumstances at the time the application was accepted for this paragraph to apply. This may include an error of judgement or omission on the part of the examiner, or information about the trade mark that was not available to the Registrar at the time of examination, for example:

   the examiner may have overlooked or discounted information that would lead, if properly considered, to the examiner rejecting the application; or

   an international application for a conflicting mark having an earlier priority date had not yet been filed in Australia.

   The Registrar is not limited in what he or she may consider.

   In relation to the second limb (section 38(1)(b)), the Explanatory Memorandum provided:[3]

   This consideration is not limited to the circumstances as they existed when the trade mark was accepted. Further, the Registrar is not limited in what he or she may consider.

   The new provision will allow the Registrar to revoke acceptance of a trade mark only when this course of action is reasonable, taking account of all of the circumstances. The intention of this provision is to focus attention on the reasonableness of the Registrar's actions, and not on whether or not an `error or omission' or a `special circumstance' preceded the registration of the trade mark.

   This provision ensures that the Registrar will be in a better position to effectively keep invalidly accepted trade mark applications from becoming registered, thus protecting the public interest.

   […]

   … guidance [is] provided in the Trade Marks Office Manual of Practice and Procedure (“the Manual”):

   It may also be reasonable to revoke acceptance in the circumstances where the decision to accept is one that cannot reasonably be supported by the accepted and defined tests and the decision made by the examiner is:

   •manifestly wrong,

   •clearly not just a difference of opinion, and

   •obviously disregards established authorities

   As Hearing Officer Williams said in the decision of Re Jack Grieve:

   It is utterly inappropriate for a delegate, in assessing the merits of revocation of an acceptance, to take on the role of a protagonist. Or, to put it another way, the case for revocation ought to stand on its own merits. If those merits need an advocate to lead evidence or counter-evidence, and to articulate the case for revocation, it is hard to see how this would be appropriate.

3. With the above principles in mind, I turn to the circumstances of this proposed revocation.  A primary examiner had, as stated, accepted the trade marks for possible registration but correspondence from the Third Party owner of earlier trade marks caused a supervising examiner to issue essentially identical Notices stating:

   [The trade marks] will be advertised as accepted in the Official Journal of Trade Marks shortly. However, it has now come to my attention that the trade mark[s] should not have been accepted.

   During examination of the application earlier trade marks 1224930 AQUA DENTAL / aqua dental, 1224932 aquadental / AQUADENTAL and 1936875 AQUA DENTAL, all for dental services, were considered to be sufficiently different to your trademark AQUA SMILES. Unfortunately, this decision was incorrect. The examiner should have considered that the prominent word AQUA in your trade mark[s] which is an unusual word in trade marks for these services, provides a significant degree of similarity with these earlier AQUA trade marks in terms of sound, appearance and idea of the trade marks. While your trade mark[s] also [include] the word SMILES and the earlier trade mark the word DENTAL, these are common terms in the dental field and are not features that consumers would find memorable when making purchasing decisions.

   The examiner should have raised grounds for rejection against your application[s] under section 44 of the Trade Marks Act, 1995 on the basis that your trade mark[s are] deceptively similar to these earlier trade marks.

   Therefore, having taken into account all the circumstances that existed when the application was accepted, it is considered reasonable to revoke the acceptance[s] in accordance with section 38 of the Trade Marks Act 1995.

4. Appended to the Notices were details of the earlier marks referred to (‘the Proposed Citations’), pertinent details of which are set out hereunder:

Reg. No.		Trade Mark	Services	Priority Date
1224930		AQUA DENTAL / aqua dental	Cl. 44: dental services	19 Feb 2008
1224934		aquadental/ AQUADENTAL	Cl. 44: dental services	19 Feb 2008
App. No.	Trade mark		Services	Priority Date
1936875	AQUA DENTAL		Class 44: Dentistry; dental surgery services including root canal treatment, tooth extraction, crowns, bridges and implants; denture construction and fitting; preventative dentistry; restorative dentistry; cosmetic dentistry; dental hygiene services; consultancy and advisory services in relation to dentistry and dental surgery services.	27 June 2018

1. I am required to decide whether the decision to accept was one that could not reasonably be supported by the usual tests in relation to section 44(2) which states, for present purposes, that an application for the registration of a trade mark in respect of services must be rejected if it is substantially identical with, or deceptively similar to another person’s registered or pending trade mark of earlier priority date for similar services.

2. Each of the Proposed Citations has a priority date earlier than that of the trade marks and the compared services are “similar services” as defined by section 14(2) of the Act[2].  It is not necessary for me to decide whether the compared trade marks are substantially identical or not if I find that they are deceptively similar.  In that regard the accepted test for “deceptive similarity” was laid out in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd[3] (‘Shell’) where Windeyer J said:[4]

   On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's television exhibitions. To quote Lord Radcliffe again: "The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him . . . . It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole": de Cordova v. Vick Chemical Co (1951) 68 RPC, at p 106. And in Australian Woollen Mills Ltd v. F.S. Walton & Co. Ltd. [1937] HCA 51; (1937) 58 CLR 641 Dixon and McTiernan JJ. said: "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".

   [2] That is, the same or of the same description.

   [3] [1963] HCA 66; (1963) 109 CLR 407; [1962] ALR 304; 35 ALJR 355; 1B IPR 523 at [12].

   [4] Op. cit. at [13].

1. Further, the definition of the expression “deceptively similar” is defined by section 10 of the Act:

   10Definition of deceptively similar

   For the purposes of this Act, 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.

2. The process of assessing the likelihood of deception and confusion is informed by the factors discussed by French J in Registrar of Trade Marks v Woolworths[5]:

   (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] HCA 43; (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."

   [5] [1999] FCAFC 1020; [1999] FCA 1020; (1999) 93 FCR 365; (1999) 45 IPR 411; [1999] AIPC 91-499 at [50]

3. Returning to the comparison of the trade marks, it is to be in the context of the marketplace for the relevant goods: Parker J said in In the Matter of An Application by the Pianotist Company Ltd for the Registration of a Trade Mark[6]:

   You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion - that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods ... you must refuse the registration, or rather you must refuse the registration in that case.

   [6] (1906) 23 RPC 774 at 777.

4. The Applicant supported its written submissions with the Huynh declaration which explains that the Applicant was incorporated in August 2017 and in December of that year acquired an existing dental clinic in Hoppers Crossing, Victoria, which had done business under the name, Sarkis Dental Clinic for some years.  Huynh declares that the business was renamed and in January 2018 started performing dental services under the name, Aqua Smile Dental[7].  Confidentiality is claimed in respect of the information regarding marketing expenditure and revenue from services rendered by reference to the trade marks.  Without compromising that confidentiality, I can only make a qualitative assessment and describe the marketing expenditure as small and the service fees as modest.  I further note the Applicant’s written submission that the market for dental services is geographically localized and the statement in Huynh[8] that “dental patients do not travel far beyond their own residential locations to receive such [dental] services.”  I note here, too, that Huynh provides material wherein the Third Party owner of the Proposed Citations describes its business as “a small, modern, family owned Gold Coast dental practice”.[9]  Finally, I note that Huynh concedes that the Applicant made no search of the Trade Mark Register prior to adoption of the trade marks[10] and states that it was unaware of the Third Party’s business before it received a letter of demand from its attorneys in June 2018[11] and was likewise unaware of any other dental practice in Australia using the word “AQUA” until after receipt of that letter when the Applicant made further enquiries and discovered two other dental clinics operating by reference to that name in Australia[12].

   [7] I note here for completeness the submission that the asserted first use of [the Word Mark] was in 2017 when the Applicant advertised in November on an employment website and in December when its own website went live.

   [8] Huynh [56].

   [9] Huynh Annexure MH-14.1.

   [10] Huynh [24], stating further that it was unaware such a register existed.

   [11] Huynh [57].

   [12] Huynh [59].

5. This information, by operation of section 38, is to form the background circumstances that existed when the applications were accepted, regardless of whether or not the Registrar knew then of their existence.

6. Thus, when comparing the trade marks with the Proposed Citations for the purposes of section 44(2) it is my finding that the word “dental” (as it occurs in the Proposed Citations) can be disregarded; it is purely descriptive of the relevant services and under Australian case law as it now stands, would be entirely discounted even in the more strict determination of “substantial identity”. Further, the word “smile” is of a low distinctive value when used in connection with dental services by reason of it being a facial expression generally showing the teeth and a “good” smile would generally assume “good” teeth. Furthermore, the device element of the Logo Mark, being a realistic representation of a water droplet encapsulating the outline of a tooth, is of meagre distinctive value.

7. The Notices state that “[t]he examiner should have considered that the prominent word AQUA in your trade mark[s] which is an unusual word in trade marks for these services”.  In my assessment there is no direct cognitive link between the word “aqua” and “dental services”.  There may be indirect, suggestive undertones to the word which appeal to traders who might wish to provide dental services by reference to the word, but if so, that level of nuance is of the kind which often differentiates a trade mark from a word having little or no inherent capacity to distinguish the services of one trader from those of others. 

8. I find that the Notices were correct in characterizing AQUA as the prominent element of the trade marks.  To the extent that the Notices described AQUA as an unusual word in trade marks for these services, I note that the Applicant’s submission is that such a conclusion is:

   “… now contradicted by the Huynh evidence, which demonstrates that, when the Applications were accepted, at least two other unrelated dental clinics were using the name AQUA in combination with DENTAL in relation to dental services in Australia, thereby diminishing the distinctiveness of that word in such a context.”

1. I am not so convinced by that submission.  There is no evidence, for example, of the state of the Register for these services and without making at this stage a forensic assessment of the Huynh declaration, it outlines the possibility of three possible users of the word “aqua” for dental services throughout Australia[13].  In my assessment three potential users of a word for like services would do little to diminish the distinctiveness of a term which otherwise has no direct reference to the services at issue.

   [13] Huynh [68] makes reference to searches by the Applicant said to show use of the word “aqua” in the USA, Canada and the UK but I do not find that information assists me.

2. I consider that there is a real tangible danger of deception or confusion occurring in the sense that a significant number of people would have cause to wonder whether it might not be the case that the services come from the same source.  My consideration of that point has taken into account the surrounding circumstances as they are set out in the Huynh declaration, together with my own understanding of the commercial world and businesses of the kind conducted by the Applicant.  The services are essentially identical.  The class of person who would avail themselves of the services is identical in both cases.  The Applicant’s submission that its business and that of the Third Party are geographically well separated does not address the decisions which state that the likelihood of confusion or deception is not limited to whether a particular use will give rise to deception or confusion; rather, that assessment is based upon what the Applicant can do if registration is obtained and that is to offer dental surgery services throughout Australia[14].   Further, it is my appreciation of modern commerce that businesses such as dental clinics are not uncommonly franchised or use of the name otherwise licensed such that the reach of the business is considerably expanded.

   [14] Per Mason J in Berlei Hestia Industries Ltd v The Bali Company Inc [1973] HCA 43; (1973) 129 CLR 353 at 362.

3. Bearing all of these factors in mind I am satisfied that section 44(2) of the Act existed as a ground for rejection. That said, the Applicant has submitted that the Huynh declaration supports a case for the application of section 44(3)(a) based on the honest concurrent use of the trade marks. It stated that “[i]f an objection under section 44 had been raised during the examination of the [a]pplications, the Applicant would have been able to overcome it with evidence of these matters at that stage.” I turn to examination of that submission.

Section 44(3)

1. Section 44(2) of the Act is subject to section 44(3)(a) which provides that if the Registrar is satisfied that there has been honest concurrent use of two trade marks then the applied-for trade mark  may be accepted subject to any conditions or limitations that the Registrar thinks fit to impose, including a geographical restriction as to use of the trade mark.

1. The Applicant’s section 44(3) submissions are that (i) it has been honest in its use of the trade marks, (ii) the extent of the Applicant’s use, albeit within a relatively short compass of time and geographic area, has been significant, demonstrated by its expenditure on advertising and marketing and its volume of patients and revenue; (iii) the degree of confusion likely to ensue if the Applications are accepted is low because of the separation of the businesses; (iv) there has been no confusion; and (v) there would be no foreseeable inconvenience to the Third Party since it has no reputation in Victoria and the Applicant has no ambition to use its trade marks in Queensland.

2. My starting point is the section 38(1)(a) requirement that I should take account of the circumstances that existed when the application was accepted, whether or not the Registrar knew then of their existence. The applications were accepted on 13 August 2018 (‘Acceptance Date’). On the Acceptance Date the Registrar was not seized of the Huynh declaration. Nonetheless the declaration attests to facts prior to the Acceptance Date which have a potential bearing on the questions before me. Of relevance to section 44(3)(a) is the origin and use of the trade marks. However, were the applications now before the examiner for the first time aided by the facts as set out in the Huynh declaration, the assessment of section 44(3)(a) would have looked to use of the trade marks at the priority dates of the trade marks, 26 July 2018[15].  It follows that what is before me of relevance, so far as use of the trade marks is concerned, is confined to that small window of time between, at earliest[16], November/December 2017, and July 2018.

   [15] See, for example, Hills Industries Ltd v Bitek Pty Ltd [2011] FCA 94, [163]–[164].

   [16] See fn. 7 supra.

3. I have already characterized the confidential marketing and revenue evidence. I note, too, that some of that data postdates the priority dates. It is then of no surprise to me that the Applicant claims there has been no confusion with the Third Party’s business. More importantly, there is no meaningful evidence of concurrent use on which the section 44(3)(a) provision hinges; I accept the evidence from the Huynh declaration that the sphere of influence of the businesses and their respective patients are non-overlapping. So far as the Applicant’s honesty is concerned, I am reminded that the Applicant made no search of the Register before adopting the trade marks and later submitted applications for the trade marks through the Office’s “HeadStart” programme on 17 July 2018 having already received the Third Party’s June 2018 letter of demand. However, the paucity of concurrent use taken alone is sufficient for me to be satisfied that on the information “known” to the Registrar on the Acceptance Date, there was no case for the application of section 44(3)(a).

4. Therefore, in the result, taking account of all the circumstances that existed when the applications were accepted, I am satisfied that the applications should not have been accepted. The first limb of section 38 is accordingly established and so I am now required to consider whether revocation is reasonable, taking into account all of the circumstances existing at the time of the decision whether to revoke. In that regard it has been said that revocation must be reasonable and the reasons for it more than a mere difference of opinion.[17] 

   [17] See for example Aceto Balsamico del Duca di Adriano Grosoli SrL v Registrar of Trade Marks [2008] ATMO 2; (2008) 75 IPR 400; Re Bobart [2010] ATMO 43; (2010) 88 IPR 357.

5. The Applicant has referred to the diametrically opposed decisions of the primary and supervising examiners. The supervising examiner, who penned the Notices, stated that the primary examiner’s decision was incorrect. I am satisfied that the primary examiner was incorrect in essential ways and the reasoning separated so far from the reasoning of the supervising examiner as expressed in the Notices that the divergence could not properly be called a mere difference of opinion. I am further satisfied that in all the circumstances it is reasonable to revoke the acceptances with the consequence that the applications will be returned to examination. For the purposes of section 38 I have made my assessment of the evidence in the Huynh declaration, but examination is the proper venue for further consideration of that material and anything else which might supplement it.

Decision

1. I am satisfied, in terms of section 38(1) of the Act, that the applications should not have been accepted and that it is reasonable to revoke their acceptance.

2. Section 38(2) of the Act provides:

   If the Registrar revokes the acceptance:

   (a)    the application is taken to have never been accepted; and

   (b) the Registrar must examine, and report on, the application necessary under section 31; and

   (c)     sections 33 and 34 again apply in relation to the application.

Accordingly, the applications will be returned to examination.

Debrett Lyons

Hearing Officer

Oppositions and Hearings

13 March 2019