Australia Dairy Corporation

[2001] ATMO 14

TRADE MARKS ACT 1995

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

Re:Trade mark application number 734489(16) - NATIONAL HEALTHY BONES WEEK - in the name of Australian Dairy Corporation.

Background

Trade mark application number 734489 was filed on 15 May 1997 by Australian Dairy Corporation (the applicant).  The application was for registration of the words NATIONAL HEALTHY BONES WEEK in respect of Paper and paper goods; printed matter including posters, stickers, booklets and fliers; stationery including pens and pencils; instructional and teaching materials in class 16.

The application was examined in terms of section 41 of the Trade Marks Act 1995 (the Act). Six reports issued during the course of examination. In the first three reports an examiner held the trade mark lacked sufficient inherent adaptation to distinguish the goods specified. The examiner considered the trade mark was one which any group or organisation might want to use if they were organising a week-long focus on preventative skeletal care. The applicant was invited to file evidence in terms of s41(5), and was advised that because the trade mark had very little inherent adaptation to distinguish, comprehensive and extensive evidence would be required.

In response, the applicant filed evidence in support of its application.  It also argued that other traders would not require the trade mark, as it was the only national body with the statutory duty to promote dairy produce.  It contended that the evidence provided, although not showing use of the trade mark in a conventional trade sense, supported acceptance, and that the extent of sales should be considered in the broader context of their promotional purpose.   At this stage, the applicant amended its specification of goods by restricting it to Printed matter, including posters, stickers, booklets and fliers; stationery including pens and pencils; instructional and teaching materials.

The examiner did not find the applicant's argument or evidence persuasive, and referred the application for review by a Principal Examiner. A fourth report was subsequently issued and a fresh ground for rejection raised. On this occasion the applicant was advised the trade mark had no inherent adaptation to distinguish the goods in question, and it could only be considered for acceptance in terms of s41(6). Despite further submissions by the applicant, this ground for rejection was maintained for a further two reports. Ultimately, the registrar, in terms of s203 of the Act, set the matter down for a hearing. The applicant chose not to appear but made brief written submissions.

The matter has now been referred to me as a delegate of the registrar for a decision on the material on file.

Evidence

The applicant filed two statutory declarations as evidence in these proceedings.  Both are by Stuart Nicolson, General Manager, Marketing & Promotions of Australian Dairy Corporation.  I must point out here that both declarations also pertain to trade mark application 716752, and most of the material contained in the declarations relates to use in respect of services in class 41.

The first declaration, dated 16 February 1999, sets out the history and extent of use of the words.  Two exhibits are attached to the declaration.  Both exhibits provide illustrative examples of the words used in relation to services and in respect of goods, most of which fall outside class 16.  The examples include product marking, newsletters, stationery, printed promotional material and press releases.  Although there is some reference to use of the words NATIONAL HEALTHY BONES WEEK solus, the evidence overwhelmingly relates to use of the words as an element of a composite trade mark, which includes distinctive graphics.  That use is predominantly in respect of services in class 41.

The second declaration, dated 6 May 1999, sets out further details of use and promotion of the words.  Twenty exhibits are attached, and these show examples of use of the words in respect of promotional and printed material.  Again, most of the evidence relates to use and promotion of a composite mark in respect of services.

Neither declaration provides any significant evidence of trade mark use of the words on goods in class 16.

In his first statutory declaration, at paragraph 6, Mr Nicolson declares the trade mark has been used since 1994 in respect of paper and paper goods, printed matter including posters, stickers, booklets and fliers, stationery including pens and pencils, instructional and teaching materials, T-shirts and caps, education and entertainment services relating to dairy and related products.  No sales figures for the years 1994 to 1996 are provided, although paragraph 8 sets out the total revenue generated from sale of goods for the years 1997 and 1998.  Some of the goods on which the applicant claims use of the trade mark are not covered by the applicant's specification.  As there is no breakdown of the revenue figures, it is not clear what percentage of the total applies to goods for which registration of the trade mark is sought.

At paragraph 13.5 of his second declaration, Mr Nicolson again sets out sales value of merchandise for the year 1998.  Of the 12 items listed, the applicant's designated goods cover only three (stickers, notes and pens), and their sales value is very low.

The exhibits to both declarations show limited use of a composite mark in respect of class 16 goods, mostly on printed materials, stationery and pens.  The majority of those goods appear to be distributed free of charge as educational and resource materials.

Reasons

The Act defines a trade mark as follows:

What is a trade mark?

17. A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

Note:  For sign see section 6.

A sign is defined in s6 as:

sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.

To be prima facie registrable, a trade must be capable of distinguishing the goods for which registration is sought, in terms of s41 of the Act.

Section 41 provides:

Trade mark not distinguishing applicant's goods or services

41.(1) For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

Note 1:  For applicant and predecessor in title see section 6.

Note 2:  If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

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

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

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

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

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

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

(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances;

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

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

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

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

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

(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
(b) in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

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

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

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

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

In Blount Inc v Registrar of Trade Marks (1998) 40 IPR 498 (OREGON), Justice Branson discusses the application of s41. Her Honour observed at page 504 that, in deciding whether a trade mark is capable of distinguishing under s41, the registrar has three options. The registrar may conclude:

(a)     that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or

(b)     that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or

(c)     that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of distinguishing the designated goods or services.

In each of those three options, the key consideration is the degree of inherent adaptation to distinguish a trade mark has.

The criteria on which a judgment of inherent adaptation to distinguish should be made are set out at length by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 513. In F H Faulding & Son Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537 at 555, Kitto J summarised those criteria as:

The question to be asked in order to test whether a word is adapted to distinguish one trader's goods from the goods of all others is whether the word is one which other traders are likely in the ordinary course of their business and without any improper motive, to desire to use upon or in connection with their goods.

The criteria were recently approved by Wilcox J in Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FAC 177.

Thus, the relevant question I must consider in this case is whether the words NATIONAL HEALTHY BONES WEEK are words which other traders likely, in the ordinary course of their business and without any improper motive, to desire to use in connection with their goods or services.

In my experience, there are now many organisations which promote awareness of health and social issues by running an awareness program over the course of a week.  These are commonly referred to as NATIONAL XXX WEEK, where XXX equals the issue that the organisation is hoping to raise awareness of.  I think that, if the aim of an organisation is the promotion of an awareness of the public of the desirability of healthy bones, and associated issues such as osteoporosis and its prevention, the term NATIONAL HEALTHY BONES WEEK is one that they would normally wish to use.

In its submissions the applicant argues that as it is the only body with the statutory duty to promote dairy produce, other traders are unlikely to require to use the trade mark.  I accept the applicant has a statutory duty as argued, but I fail to see how that duty would deter other traders from requiring to use a set of words which they might normally need to use in respect of a week-long event dedicated to the promotion of healthy bones - as per Re Australian National Airlines Commission (1989) 16 IPR 270.  It is likely that other traders may wish to organise, or become involved in, services or events forming part of such a week.  Under such circumstances, they are likely to need to use the words NATIONAL HEALTHY BONES WEEK in connection with their services and promotional products.

As I have found the trade mark is not to any extent inherently adapted to distinguish the designated goods, the provisions of subsection 41(6) come into operation.  For the trade mark to be registrable, the applicant must establish that because of its use prior to the date of filing, the trade mark does distinguish the designated goods as being those of the applicant.

The applicant has produced evidence that relates overwhelmingly to use of a composite trade mark in respect of services.  There is very little evidence of use of the trade mark applied for in respect of goods in class 16.  Although the evidence refers to use of the trade mark from 1994, sales figures provided primarily relate to use after the date of filing, and are very low in respect of class 16 goods.

Most of the goods for which the applicant is seeking registration of its trade mark appear to be ancillary products distributed free of charge to promote a healthy bones awareness week, to promote dairy products, or to educate and inform the public on the prevention of osteoporosis.  This calls into question whether, in relation to those goods, the trade mark is actually being used in the course of trade as set out in s17.  In its submissions, the applicant acknowledges that use of the trade mark on the designated goods has not been in the conventional sense but argues "it is nevertheless used by the applicant in the course of trade in the applicant's business of promoting and assisting the sale of dairy products . . ."

The issue of use of a trade mark in the course of trade was discussed by D R Shanahan in Australian Law of Trade Marks and Passing Off, Second Edition, 1990, The Law Book Company Limited.  At p31 he states:

Ancillary products

Akin to the free distribution cases are those where it is said that a product is merely ancillary to the actual product traded.  There must be trade in the particular goods or services for which the use is to be established, and indeed the inclusion of the words "in the course of trade" was recommended by the Goschen Committee to make it clear the Register is not available to persons who "do not actually trade in or deal with goods, for example, persons concerned in the professions, headmasters or governing bodies of schools and insurance companies".  Thus the use of a "service mark" on letterhead, bank books, menus and advertising materials has not been regarded as trade mark use in relation to those goods, there being no trade in the products in question.  However, there may of course be trade in the services to which such goods are ancillary, and such a mark may now be registered in the appropriate services class.

If the applicant was providing free samples of its class 16 goods to promote sales of those same goods, this could well amount to use in the course of trade.  But this is not the case.  Where the applicant is providing its class 16 goods free of charge, it is to promote both the sale of dairy products, and to raise health awareness.  The applicant may find such use of the trade mark commercially desirable to promote the products of the industry it represents, but this does not establish use in the course of trade.  The goods provided free of charge, being class 16 goods, are not the actual products and services traded in, but are ancillary to those products and services.

Decision

I find NATIONAL HEALTHY BONES WEEK is not a combination of words that is inherently adapted to distinguish the designated goods. I consider the evidence provided by the applicant is insufficient to establish the trade mark did distinguish the applicant's goods from those of other traders at the time of filing. Accordingly, I reject the application under the provisions of s41(2).

F Aarnio
Senior Examiner

22 February 2001