Beats Electronics, LLC v LG Electronics Inc

[2016] ATMO 104

TRADE MARKS ACT 1995

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

Re:Opposition by Beats Electronics, LLC to registration of trade mark applications nos. 1504324 – QuadBeat – and 1662449 – QuadBeat3 - in the name of LG Electronics Inc.

Delegate:	Bianca Irgang
Representation:	Opponent: Khajaque Kortian of Spruson & Ferguson Applicant: Relied on written submissions prepared by Griffith Hack Patent and TM Attorneys
Decision:	2016 ATMO 104 Trade Marks Act 1995 - Section 52 opposition: sections 42(b), 44, 60 and 62A pressed – section 60 established for both trade marks.

Background

1. LG Electronics Inc (‘the applicant’), filed trade mark application numbers 1504324 and 1662449 on 25 July 2012 and 4 December 2014 respectively in class 9 of the International Classification of Goods and Services. Current details of the applications are set out below.

   Trade mark:  

   Trade mark application no: 1504324

   Filing Date:  25 July 2012

   Convention details:                20 July 2012
     40-2012-0046595 Korea, Republic of

   Specification:  Class 9: MPEG audio layer-3 players; navigations being navigation apparatus; audio receivers; portable multimedia players; personal digital assistances; headphones; earphones; speakers; microphones; cordless phones; earphone mikes; headsets; remote controllers for televisions; remote controllers for audios; remote controllers for cassette players; remote controllers for MPEG audio layer-3 players; mobile phones; smart phones; television receivers; portable communication apparatus namely mobile phone handsets, walkie-talkies and satellite telephones

   Trade mark:  

   Trade mark application no: 1662449

   Filing Date:  4 December 2014

   Specification:  Class 9: Earphones; Headphones; Speakers; Smart phones; Portable communication apparatus namely handsets, walkie-talkies, satellite telephones, personal digital assistants and portable multimedia players; Television receivers; Electronic handheld units for the wireless receipt, storage and/or transmission of data and messages; Electronic wearable units for the wireless receipt, storage and/or transmission of data and messages; Wearable smart phones; Wearable electric audio and visual apparatus and instruments; Computers; Monitors; Tablet computers; Software for earphone; Software for speaker

2. Acceptance of the applications for possible registration was published in the Australian  Official Journal of Trade Marks dated 15 November 2012 and 23 April 2015 respectively. Subsequently Beats Electronics, LLC (‘the opponent’) filed a Notice of Intention to Oppose registration followed by Statements of Grounds and Particulars. A notice of opposition had previously been filed by the opponent in relation to application no. 1504324.

3. The applicant then filed its Notice of Intention to Defend for application no. 1662449. Thereafter the opponent and applicant respectively filed evidence in accordance with the provisions of the Trade Mark Regulations 1995 (‘the Regulations’).

4. I heard the opposition in Canberra as a delegate of the Registrar of Trade Marks on 5 September 2016. The opponent was represented by Khajaque Kortian of Spruson & Ferguson. The applicant was not represented at hearing but did provide written submissions prepared by its legal representatives, Griffith Hack, for consideration.

   Grounds of Opposition

5. The notice of opposition for 1504324 and the Statement of Grounds and Particulars for 1662449 nominated a number of grounds of opposition under the Trade Marks Act 1995 (‘the Act’). Those grounds included sections 42(b), 44, 60 and 62A which were pursued at the hearing. The opponent bears the onus of establishing at least one of the grounds of opposition.[1] The standard of proof is the ordinary civil standard of the balance of probabilities.[2] Should the opponent establish one ground of opposition for each trade mark in relation to all of the applicant’s services, there is no requirement for me to consider the other grounds of opposition.

   [1] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58 [32].

   [2] Pfizer Products Inc v Karam [2006] FCA 1663 [6] - [26]; Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156, [132]-[133]

   Evidence

6. The evidence in these matters is not identical and I have listed the evidence in both opposition proceedings under the heading of the trade mark numbers below.  

   Trade Mark Application No. 1504324

   Evidence in Support

   ·Declaration of Rafferty Atha Jackson  (‘Jackson 1’) dated 14 October 2013

   ·Declaration of Paul Lindsay Blanket (‘Blanket’) dated 13 February 2014

   Evidence in Answer

   ·Declaration of Rick Cho (‘Cho 1’) dated 8 July 2014

   ·Declaration of Jurgen Bebber (‘Bebber 1’) dated 6 August 2014

   ·Declaration of Rick Cho (‘Cho 2’) dated 6 August 2014

   Evidence in Reply

   ·Declaration of Francesca Colubriale ( ‘Colubriale ’) dated 14 November 2014

   Trade Mark Application No. 1662449

   Evidence in Support

   ·Declaration of Thomas R La Perle  (‘La Perle 1’) dated 18 November 2015

   Evidence in Answer

   ·Declaration of Rick Cho (‘Cho 3’) dated 24 February 2016

   ·Declaration of Jurgen Bebber (‘Bebber 2’) dated 1 March 2016

   Evidence in Reply

   ·Declaration of Thomas R La Perle (‘La Perle 2’ ) dated 4 May 2016

   ·Declaration of Khajaque Kortian (‘Kortian’) dated 9 May 2016  

   Discussion

   Section 60 - Reputation in Australia

7. Section 60 of the Act provides:

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

   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.

8. Unlike section 44 of the Act, section 60 does not require that the goods upon which the opponent has used its trade mark be “similar”[3] to the goods of interest to the applicant, nor is there a requirement that the trade marks be substantially identical or deceptively similar. Therefore, it is for me to determine whether the opponent has established that before 20 July 2012 and/or 4 December 2014 its trade mark(s) were recognized by the public generally, or at least by a significant number of persons in the speaker and headphone marketplace and whether because of that, the use by the applicant of its trade marks for the designated goods would be likely to deceive or  cause confusion amongst relevant purchasers.

   [3] As defined in section 14(1) of the Act.

9. The principles relevant to the assessment of the likelihood of confusion in particular were set out by French J in Registrar of Trade Marks v Woolworths: [4]

   (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:[5]

   “...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.”

   [4] [1999] FCA 1020 [50]

   [5] [1973] HCA 43; (1973) 129 CLR 353, 362

10. Reputation is to be assessed according to the test set out in McCormick & Company Inc v McCormick by Kenny J:

    What is intended by the word “reputation” in s 60? The word is defined in The Macquarie Dictionary as follows:

    reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.

    Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to “the recognition of the McCormick & Co marks by the public generally”.

    Does the evidence establish that in Australia before 9 March 1992 the McCormick  & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public’s mistakenly attributing a business connection between the two or attributing her product to the company?[6]

    [6] [2000] FCA 1335, [81].

    Trade Mark Application no. 1530464 “QuadBeat”

11. In determining the reputation of the trade marks relied upon by the opponent Jackson 1 and Blanket are both relevant. Jackson 1 demonstrates that the opponent is the owner of 22 registered trade marks in Australia being:

Trade Mark No.	Marks	Priority Date
1308436	HEARTBEATS	8 July 2009
1382458	BEATSAUDIO	7 September 2010
1390021	BEATBOX	20 October 2010
1398443	BEATS PRO	3 December 2010
1433368	BEATS	17 June 2011
1433369	BEATS BY DR. DRE	27 June 2011
1473087	URBEATS	6 February 2012
1476891	BEATS BY DR.DRE	23 February 2012
1477277	BEATS	27 February 2012
1481635	IBEATS	20 March 2012
1482271	CLUB BEATS	23 March 2012
1499235	BEATSAUDIO	27 June 2012
1501068	BEATS PILL	6 July 2012
1509972	BEATS STUDIO	21 August 2012
1510240	BEATS PRO	22 August 2012
1513731	BEATS EXECUTIVE	10 September 2012
1595887	POWERBEATS BY DR. DRE	10 December 2013
1599416	BEATS ACOUSTIC ENGINE	2 January 2014
1610521	POWERBEATS	11 March 2014
1610838	BEATS MUSIC	12 March 2014
1662300	BEATS	1 August 2014
1677257	BEATSAUDIO	21    October 2014

1. All of the above trade marks cover the same and/or similar goods in class 9 to the opposed trade mark. Blanket supplements Jackson 1 and provides expert opinion on brand extension in the marketplace and lists a number of examples of brand extension within Australia which feature a common word or element but contain various differing elements.

2. Jackson 1 goes on to outline the history of the opponent’s use of its BEATS and BEATS BY DR DRE trade marks on its electronic goods and most notably premium headphones, earphones and speakers which have been sold and promoted in the USA since 2008 and in Australia since 2009. Jackson 1 also states that the opponent’s ‘BEATS’ branded goods have been incorporated into Chrysler motor vehicles, HP Computers and HTG mobile phones. This is supported by Exhibit RAJ-4 accompanying Jackson 1. Exhibits RAJ-1 and RAJ-5 provide a number of examples of how the opponent’s BEATS branded products have been promoted throughout the world, including in Australia. These exhibits also support the statements made in Jackson 1 that the opponent sells its BEATS branded goods throughout Australia through national retail stores including Myer, JB Hi Fi, Harvey Norman, Apple, David Jones and Dick Smith. The opponent has also sold its BEATS branded goods via the internet through third party websites including ‘ and ‘

3. The various BEATS trade marks which the opponent has used within Australia include BEATS solus, POWER BEATS, BEATS BY DR DRE, MONSTER BEATS and BEATS PRO.[9] However, I note that in most of the opponent’s examples of the advertising dated before the priority date of the applicant’s QuadBeat trade mark demonstrate various combinations of the BEATS trade marks are used such as a stylised “b”, “beats”, “HEARTBEATS” and “MONSTER BEATS ™ BY DR. DRE”. In particular,  advertisements featuring the expression “Beats by Dr. Dre” place significant emphasis on the word BEATS in the trade mark by presenting the trade mark as “Beats ™ by Dr Dre ™” or “Beats ™ by Dr Dre ™ Studio ™”. [10] The “BEATS” solus trade mark underpins the opponent’s section 60 ground of opposition.

   [9] Exhibits RAJ-1, RAJ-4, RAJ-5, RAJ-6 accompanying Jackson 1

   [10]Exhibit RAJ-5 accompanying Jackson 1

4. Turning to confidential exhibits RAJ-2 and RAJ-7 which contain details of the opponent’s wholesale and advertising figures, I note that the opponent’s wholesale figures since 2008 in Australia have very significantly increased each year. The figures show significant growth and I am satisfied that these figures, along with the opponent’s evidence of its advertisements through major retail chains across Australia and news articles[11] demonstrate that the opponent had a significant reputation in Australia for its BEATS trade mark before the priority date of trade mark application no. 1504324. I just need to determine if because of this demonstrated reputation, use by the applicant of the QuadBeat trade mark is likely to deceive or cause confusion in the marketplace.

   [11] Exhibit RAJ-3 accompanying Jackson 1

5. This comes down to my being satisfied that there is a ‘finite and non-trivial’ risk of deception or confusion.[12] A relevant factor is the similarity of the trade marks in question. The Registrar’s delegate in Reece Pty Ltd v Rogers Seller & Myhill Pty Ltd[13] observed that:

   Confusion cannot arise solely from the reputation of one trade mark. There must always remain a level of similarity between the marks, whether we call it deceptive similarity or something less, and no matter how small it might be. The likelihood of confusion must depend on the reputation of the opponent's trade mark, but have regard (amongst other factors) to the level of similarity of the goods/services and the degree of similarity of the trade marks, greater or smaller.

   [12] Registrar of Trade Marks v Woolworths Limited (1999) AIPC 91-499 at 36, 697-8 (per Justice French) and 39, 703-4 (per Justice Branson)

   [13] (2010) 85 IPR 647

6. I also direct my attention to Australian Woollen Mills Limited v F S Walton & Company Limited[14], where Dixson and McTiernan JJ stated the following:

   "An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought.  The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same… the usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any higher perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observations of men considered in the mass affords the standard".

   [14] (1937) 58 CLR 641 [658]

7. The applicant has argued that the opponent’s evidence demonstrates it uses the word BEATS most often accompanied with the words ‘By Dr Dre’ and has not demonstrated any confusion in the marketplace between the opponent’s BEATS branded goods and goods branded with the applicant’s QuadBeat trade mark. To this point I note that the applicant has not yet used its QuadBeat trade mark in Australia so there are unlikely to be any examples of confusion in the marketplace nor is it a requirement of section 60 that the opponent demonstrate actual instances of confusion have taken place. I also note that the opponent’s evidence demonstrates that it has clearly used ‘BEATS’ as an individual and stand alone trade mark and that even when used in conjunction with the words “By Dr Dre” the opponent often represented the expression in the following ways: “Beats ™ by Dr Dre ™” or “Beats ™ by Dr Dre ™ Studio ™”. [15]

   [15] Exhibit RAJ-5 accompanying Jackson 1

8. When I consider the similarities between the opponent’s trade marks and the applicant’s QuadBeat trade mark I note that the prominent and common feature of all the trade marks is the word BEAT. In particular, the applicant has further emphasized the word BEAT within its QuadBeat trade mark by capitalizing the letter ‘B’ in Beat which causes the reader to see two distinctly different words QUAD and BEAT.

9. Given the significant reputation of the BEATS trade marks and the abovementioned degree of similarity between the respective trade marks I am satisfied use of the applicant’s QuadBeat trade mark would be likely to cause confusion. Consumers are likely, as the opponent submitted, to believe this is a related product or new product line from the maker of the well known BEATS branded headphones, speakers and earphones. Therefore, the opponent has established its ground of opposition under section 60 in regards to trade mark application number 1504324. Having found in favour of the opponent in terms of section 60 there is no need for me to discuss the other grounds set out in the notice of opposition. Although I note any grounds allowed for in the Act may be relied on in the event of an appeal from this decision. I turn now to trade mark application number 1662449.

   Trade Mark Application Number 1662449 “QuadBeat3”

10. In determining the reputation of the opponent’s BEATS trade mark  I turn to the evidence put forward by the opponent in La Perle 1 and the accompanying exhibit TLP-2 which relists the previous trade mark registrations owned by the opponent as I detailed in paragraph 11 of this decision. La Perle 1 outlines the history of the opponent in the same terms as detailed in Jackson 1 being that the opponent commenced selling BEATS branded headphones, earphones and speakers in the USA in 2008 and expanded its sales to Australia in 2009.

11. Exhibit TLP-4 accompanying La Perle 1 contains printouts from the opponent’s Australian portion of its website ‘au.beatsbydrdre.com’ showing the range of ‘BEATS’ branded goods available as at the 7 November 2013. Exhibit TLP-5 are printouts showing the availability for purchase of 4 December 2012 in Australia of BEATBOX powered speakers, BEATS PILL wireless speakers, BEATS PRO and BEATS STUDIO headphones and BEATS TOUR, POWERBEATS, and HEARTBEATS earphones. Similarly, the opponent’s evidence demonstrates that the word BEATS is often emphasized by being rendered in a different colour when accompanied by additional words or being prominently displayed solus across the actual product.[16]

    [16] Exhibit TLP-4 accompanying La Perle 1

12. La Perle 1 also states that the opponent’s goods bearing its BEATS solus and various combination BEATS trade marks are currently offered for sale and sold at retail stores throughout Australia and online including Myer, JB Hi Fi, Harvey Norman, Apple, David Jones and Dick Smith.[17] Mr La Perle explains that the opponent commenced distributing its BEATS branded goods through Harvey Norman around July 2010 and that the BEATS branded goods have been advertised in Harvey Norman catalogues which are distributed across Australia.[18] Exhibit TLP-7 appears to contain copies of the same advertisements demonstrating use of various BEATS trade marks in third party catalogues as contained in exhibit RAJ-5 accompanying Jackson 1. La Perle 1 asserts that approximately 3.6 million copies of each Harvey Norman catalogue were distributed by or on behalf of Harvey Norman to households and businesses across Australia before the priority date of the applicant’s QuadBeat3 trade mark.

    [17] Exhibit TLP-9 accompanying La Perle 1

    [18] Exhibits TLP-7 and TLP-8 accompanying La Perle 1

1. La Perle 1 states that since at least December 2009 the opponent has widely promoted its BEATS branded goods in Australia and throughout the world.[19] Mr La Perle details how the opponent entered into licenses with the owners of other well-known brands to increase the exposure of the BEATS brand. In this way BEATS branded goods were included in HTC mobile phones and also as the speaker system in motor vehicles. BEATS branded goods are also currently co-marketed alongside Apple’s iPhones and iPad products.[20] The opponent asserts that it had extensively marketed its BEATS branded products in Australia and I am satisfied that the opponent has extensively promoted its BEATS trade mark throughout Australia before the priority date of the applicant’s QuadBeat3 trade mark.

   [19] Exhibit TLP-10 accompanying La Perle 1

   [20] Exhibit TLP-1 accompanying La Perle 1

2. I am satisfied that this evidence of extensive advertising of the opponent’s BEATS branded goods in Australia, along with the sales figures listed in confidential exhibit TLP-12 demonstrate that the opponent had a significant reputation in Australia for its BEATS branded goods before 4 December 2014. Given this reputation, then, would use of the QuadBeat3 trade mark for the designated goods be likely to deceive or cause confusion in the marketplace?

3. Similarly to my discussion of the trade marks in paragraphs 15 to 19 of this decision, a comparison of the applicant’s QuadBeat3 trade mark to the opponent’s various BEATS trade marks reveals that the common feature between all the trade marks is the word BEAT. The applicant’s QuadBeat3 trade mark is structured with the letter “Q” and “B” capitalized within the trade mark which causes the reader to see the trade mark as two distinct words, namely “Quad” and “Beat” with the numeral “3” at the end of the trade mark. 

4. The fact that the opponent has demonstrated it uses the word BEATS with other additional words (appearing either before or after it) including BEATS ™ BY DR. DRE ™, BEATBOX, BEATS PILL, BEATS PRO, BEATS STUDIO, BEATS TOUR, POWERBEATS and HEARTBEATS makes it more likely that consumers will see the applicant’s QuadBeat3 trade mark as being related to the opponent’s similarly branded BEATS goods. This is particularly so when the goods the respective trade marks will be used on are the same (i.e. speakers, headphones and the like). The fact that the applicant uses the word ‘BEAT’ and that the opponent’s demonstrated reputation resides in the plural form ‘BEATS’ does not in my view significantly affect the likelihood that Australian consumers are likely, as the opponent submitted, to believe this is a related product or new product line from the maker of the BEATS branded headphones, speakers and earphones. I am satisfied that the likelihood of confusion between the opponent’s BEATS goods and the applicant’s QuadBeat3 branded goods is high.

5. Therefore, the opponent has established its ground of opposition under section 60 with regard to trade mark application number 1662449.

   Decision

6. Section 55 of the Act provides:

   55  Decision

   (1)  Unless subsection (3) applies to the proceedings, 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:          Forlimitationssee section 6.

7. I find that the opponent has met the onus upon it, in terms of the ground of opposition under section 60 in regards to both trade mark applications. Accordingly I refuse to register trade mark application no.s 1504324 and 1662449.

   Costs

8. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs against the applicant in terms of Schedule 8 of the Regulations.

   Bianca Irgang

   Hearing Officer

   Trade Marks Hearings

   23 November 2016

   
   

[7] Exhibit RAJ-1 accompanying Jackson 1

[8] Exhibit RAJ-1 accompanying Jackson 1