Bi-Lo Pty Limited v Kellogg Company

[1996] ATMO 15

TRADE MARKS ACT 1955

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

Re:Opposition by Kellogg Company to the trade mark BI-LO  RICE  POPPS, application number 543964(30), lodged in the name of Bi-Lo Pty Limited

This matter concerns the registration of the trade mark bi-lo  rice  popps.  Application to register this mark was lodged on 16 October 1990 by Bi-Lo Pty Limited, a New South Wales company of 27 Centenary Road, Newcastle.   On 5 May 1992, in the Official Journal of Trade Marks,  the Registrar advertised acceptance of this mark in Part B of the Register, for all goods in International class 30.  The goods in Class 30 are described as:

Coffee, tea, cocoa, sugar, rice, tapioca, sago, artificial coffee; flour and preparations made from cereals, bread, pastry and confectionery, ices; honey, treacle; yeast, baking-powder; salt, mustard; vinegar, sauces (condiments); spices; ice.

Registration of this mark was promptly opposed by Kellogg Company, a Delaware company located at Kellogg Square, Battle Creek, Michigan in the U.S.A.. Under the provisions of section 49 of the Trade Marks Act 1955, it lodged notice of opposition on 20 November 1992. The notice contains broad general grounds amongst which are the following:-

·    the registration or use of bi-lo  rice  popps is likely to cause deception or confusion by reason of its close resemblance to one or more of Kellogg Company’s  trade marks

·    the use of bi-lo  rice  popps in relation to class 30 goods  would be misleading or confusing by reason of the reputation and rights acquired by Kellogg Company

·    bi-lo  rice  popps would be disentitled to protection in a court of justice

·the opposed trade mark is not distinctive of Bi-Lo Pty Limited’s goods

Evidence (as described below) was served by both parties and, in accordance with the provisions of regulation 49, the agent for Bi-Lo Pty Limited,  Mr Colin J. Oberin, an attorney from the Melbourne firm of Oberins, requested that the matter be heard.  A hearing was therefore set down, and was conducted before me in Canberra on 30 November 1995.  Ms Kate Johnston, a legal practitioner from the Sydney firm of Spruson k Ferguson, attended on behalf of Kellogg Company.  Mr Oberin attended on behalf of Bi-Lo Pty Limited. 

Description of the evidence

Evidence was served by the parties in accordance with the provisions of regulations 43, 44 and 45 of the Trade Mark Regulations 1955.  It is convenient for me briefly to describe its contents.

·    Evidence in support of the opposition comprises three declarations -  the first from David A. Herdman, trade mark counsel for Kellogg Company;  a second from Gerard James Skelly, a solicitor employed by Spruson k Ferguson,  Kellogg Company’s Australian agents; and a third from Edward J. Gildea, Vice President-Legal of Kellogg Company.   

·    Bi-Lo Pty Limited’s  evidence in answer consists of four declaration.  The first of these is from Sandra Elizabeth Forman, a technical assistant with Oberins; the second is from David Gwynne Wilson, General Manager, (Merchandising) for Bi-Lo Pty Limited; the third and fourth are from Bernard Flynn and John David McLeish both of whom are claimed by Bi-Lo Pty Limited, as independent witnesses.  Mr Flynn is Account Manager of Counterpoint Marketing in South Australia and he manages the national accounts for a number of product brands in the retail food sector.  Mr McLeish is State Sales manager of Unifoods, South Australia.   Unifoods manufacturers and distributes a wide range of food products, and supples the major supermarket chains throughout Australia.

·    The opponent’s evidence in reply is a single declaration from Michael James Kirov, a solicitor with Spruson k Ferguson.

·    Included as exhibits to the Wilson and Kirov declaration, are two short video clips, which we viewed in the course of the hearing.

Ms Johnston opened her submissions with confirmation that the grounds relied on were those relating to sections 28 and 33 of the Act, and to the question of distinctiveness.  I shall deal with these grounds in the same order as Ms Johnston did.

The Section 33 ground

Background

The starting point for the section 33 ground, is the Office data base, and the record of trade marks, in class 30,  which contain the words pop, pops, popp or popps.  Ms Foreman searched for these marks and discovered 125.  Not all of these are registered.  20 failed before registration; 13 have been removed from the Register; and 29 are pending.  However, on the day Ms Foreman extracted her information, 13 October 1994, 63 of them were registered marks.  Mr Skelly points out that five of these are registered to the opponent, Kellogg Company.  These are:

Number                   Trade mark  Goods

79143            SNAP CRACKLE AND POP          cereal foods

79144  cereal foods

153385COCO POPS  breakfast foods, cereal preparations, bread, biscuits, cakes, confectionery all being cocoa flavoured

245062STRAWBERRY POPS  cereal derived food product to be used as a breakfast food, snack food and confection, being strawberry flavoured

351534              all goods included in class 30

The majority of the remaining 58 marks have no bearing on this opposition.  Amongst them, for example,  are marks such as poppy custard,  popsy,  hippopotamousse,  popeyes,  poppycock,  blowing whistle lollipops  and popsicle. In many of these marks, particularly those registered for confectionary or ice confectionary, the word pop is simply part of a descriptive term like lollipop.   However, the following five marks were cited by Kellogg Company, as being relevant to the opposition.

Number         Trade mark  Goods

167034FRUITYPOP   fruit flavoured puffed rice products being a snack food, but not including and not being in the nature of breakfast cereal foods

167035CHICKPOP   chicken flavoured puffed rice products being a snack food, but not including and not being in the nature of breakfast cereal foods

167036CHEEZPOP  cheese flavoured puffed rice products being a snack food, but not including and not being in the nature of breakfast cereal foods

171592bacon flavoured puffed rice

products being a snack food, but

not including and not being in

the nature of breakfast cereal

foods

Bi-Lo Pty Limited, however, cites these marks to support its counter claim and cites the following marks as well. The first of these is now removed,  the other three are registered.

Number         Trade mark  Goods

226045krunchi-pops  all goods in class 30

399417SUNPOPS  all goods in class 30

472201NUTTY POPS  chocolate, chocolates and confectionery; non of the foregoing being breakfast cereals or iced confections

536648TOOTSIE POPS  all goods in class 30

A brief outline of the Kellogg Company’s position, is provided by Mr Herdman and Mr Gildea.  Mr Herdman says that snap crackle and pop  and coco pops  have been used throughout Australia for many years.  He gives an account of turnover for goods sold under these marks, and of advertising,  for the last five years. These are high figures.  Mr Gildea says that Kellogg Company is the proprietor of a worldwide family of trade marks containing or consisting of the word pops,   choco pops,  coco pops,  corn pops,  honey pops  and strawberry pops.  Registrations exist in a string of countries including New Zealand, the United Kingdom and the United States of America.  Global sales are very high.

The position for Bi-Lo Pty Limited, is set out by Mr Wilson. There are 119 Bi-Lo Supermarkets operating throughout Queensland, New South Wales, Victoria, South Australia and Western Australia.  Bi-Lo was originally registered as a business name in all but the Northern Territory. As generic brands appeared it was determined that the company needed a trade mark for its generic product lines, and the word bi-lo was registered as this mark. 72 generic products are now marketed under this trade mark. They include bi-lo instant coffee,  bi-lo fish fingers,  bi-lo tomato paste,  bi-lo wheat germ,  bi-lo corn flakes  and  bi-lo raw sugar.  Turnover for these goods is very high.  When Bi-Lo Pty Limited decided to add a “popped rice cereal product” to its bi-lo range, it was natural, says Mr Wilson,  to call it bi-lo rice popps. This style, he says, is in line with two other traders, Jewel Foodstores Pty Ltd and Franklins Limited who, he reports, similarly adopted the “rice popps” suffix, and tied it to the respective generic brand names as per, no names rice popps  and no frills rice popps.

Mr Wilson concludes his declaration with the statement that at the time of adopting the trade mark bi-lo  rice  popps,  he was aware of the snap crackle and pop slogan and the coco pops trade mark, but he did not consider that there was any conflict.  He remains of that opinion, and is not aware that there has in fact been any confusions between the applicant’s mark and the Kellogg Company trade marks.  

The independent witnesses, whose declarations form part of Bi-Lo Pty Limited’s evidence, speak as experts from the grocery business.  Mr Flynn is familiar with Bi-Lo Pty Limited’s products, he knows its trade mark bi-lo, and he is aware that this mark is used both alone and in conjunction with other names.  He also knows Kellogg Company breakfast cereals and he expresses the opinion that neither he, nor the general consumers, would be likely to associate bi-lo rice  popps with the Kellogg’s range of breakfast cereals.  Similarly, Mr McLeish is familiar with Bi-Lo Pty Limited and its trade marks.  He too declares his opinion that consumers would not believe a connection existed between bi-lo rice  popps and the Kellogg Company range.  Both of these witnesses refer to Bi-Lo Pty Limited’s goods as popped rice  breakfast cereals.

The s33 tests

Against that background, I turn to the section 33 ground of opposition.  It depends on Kellogg Company’s registered trade marks, 79143, 79144, 153385, 245062 and 351534.

There are essentially three test and,  for the subject marks,  these may be stated as follows:

·are the application goods the same, or of the same description as the goods of the opponent’s marks: and

·are the applicant’s and opponent’s marks substantially identical:  and/or  

·are the applicant’s and opponent’s marks deceptively similar.

If the goods are the same, or are of the same description, and if the marks are found to be either substantially identical or deceptively similar, then an objection under the section 33 ground is made out. 

The goods

The application mark has been accepted for goods including preparations made from cereals. The Kellogg Limited’s registrations all overlap with these goods, and both Ms Johnston and Mr Oberin agreed that the question of goods is therefore not an issue.  The various marks all hold goods in common, particularly breakfast cereals which, according to the evidence, are the goods of paramount interest.  The section 33 question thus turns on a comparison of the marks.  

Substantial identity

The question of substantial identity is tested by comparing the marks side by side (Shell Co. (Aust.) Ltd -v- Esso Standard Oil (Aust.) Ltd.) (1961) 109 CLR 407 at 414-415.   Ms Johnston does not, I think, seriously contend that bi-lo rice popps is substantially identical to snap crackle and pop,  coco pops, strawberry pops or to either of Kellogg Company  device marks.  In my view the differences between bi-lo rice popps and any one of these marks is patently too wide to support an argument of substantial identity, and I find that the opposition so far as   substantial identity is concerned, cannot succeed. 

Deceptive similarity

Deceptive similarity, however, is a wider test.  It brings in the question of the impressions which the respective marks generate and which are then carried away by members of the community who have an interest in buying breakfast cereal products.  It involves the question of imperfect recollection.  It requires a consideration of the manner in which cereal products are sold, the kind of customers who buy them, the degree of expense and careful forethought that can be assumed, and all the surrounding circumstances.  As per Australian Woollen Mills Ltd -v- F.S.Walton k   Co. Ltd, (1937) 58 CLR 641 at 658:

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 high 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. 

Ms Johnston’s first submission on deceptive similarity is the likeness between the trade mark bi-lo rice popps and the five Kellogg Company trade marks.  She centres her argument, however, on two marks, strawberry pops and coco pops  - and at a cursory glance these two marks can be seen to come a good deal closer to bi-lo rice popps than any of the other three Kellogg Company marks.  Ms Johnston puts the argument, that in the strawberry pops and coco pops registration, the distinctiveness which renders the marks registrable, is the word pops.  She asserts this from the fact that in the coco pops registration, the goods are restricted to all “being cocoa flavoured”; and in the strawberry pops registration, the goods are restricted to all “being strawberry flavoured”.  Hence, “coco” and “strawberry” have been recognised and treated as descriptive words.  Further, she points to the above mentioned marks, fruity pop, chickpop, cheezpop, and  bac’npop, and to their goods, restricted in turn, to “fruit flavoured”, “chicken flavoured”, “cheese flavoured” and “bacon flavoured” goods.  Moreover, in each case, the goods of these four mark exclude breakfast cereals.  These marks, she submits, therefore demonstrate that the words pop or pops constitutes the distinctive element in strawberry pops, coco pops,  fruitypop, chickpop, cheezpop, and bac’npop, and, because breakfast cereals are excluded from all but the Kellogg Company marks,  establish that in relation to breakfast cereals,  the words pop and  pops have clearly been perceived as distinctive of Kellogg Company’s goods.

Turning next to the application mark, bi-lo rice popps, Ms Johnston put the view that any distinctiveness in this mark likewise depended on the word popps.  bi-lo, she argues, is nothing more that a phonetic equivalent of the words buy low and is a direct reference to low priced goods; rice is simply a nomination of the cereal products.  A comparison of bi-lo rice popps with coco pops  and strawberry pops, she claims, thus comes down to comparing marks in which the essential element is the word popps or pops - and she claims, pops is the distinctive feature of Kellogg Company’s trade marks.  On that basis, Ms Johnston submitted, I should find the application mark deceptively similar to the Kellogg Company’s marks.

The surrounding circumstances

To support its section 33 ground, however, Kellogg Company has a further argument. This hinges on “the way in which the particular class of goods [breakfast cereals] are sold,”  “the setting, and the habits and observations of men,” (Australian Woollen Mills Ltd -v- F.S.Walton k  Co. Ltd  (supra )), and the video and other material exhibited by Mr Kirov.  The habits and observations I am to take into account are the habits and observations of those of us who buy breakfast cereals. The video shows a segment of a Channel 7 current affairs program. It deals with and discusses the fact that generic products (of the kind produced by the applicant and sold under its trade mark bi-lo) may be manufactured by one of the national brand leaders (such, indeed, as Kellogg Company may claim to be).  Mr Kirov’s other exhibit, an article from Choice magazines, comments on and confirms this marketing development.  Generic lines are marketed by a number of the principle food retailers.  Jewel Foodstores Pty Ltd and Franklins Limited - as mentioned by Mr Wilson - market generic lines under the trade marks no name and no frills.  According to Mr Kirov’s evidence, any of these goods may be manufactured by a national brand manufacturer.  Kellogg Company’s second argument is therefore this.  On account of television programs and press coverage, there is widespread knowledge that generic brands may be manufactured by national brand leaders.  pop and pops are essential and distinctive parts of some very well known trade marks owned by Kellogg Company.  Marketing of the applicant’s generic brand rice breakfast cereals under a trade mark which gives prominence to the word pop, will therefore be perceived as an indication that these rice cereals are manufactured for the applicant, by Kellogg Company.  This circumstance, says Ms Johnston, supports the section 33 ground, that the trade mark bi-lo rice popps is disqualified from registration because it is  deceptively similar to Kellogg Company’s trade marks coco pops and strawberry pops .

The applicant’s argument

A contrary view is argued for the applicant, by Mr Oberin.  He contends that pop (and pops) are not, prima facie, distinctive elements and could not, alone,  justify  the registration of the Kellogg Company marks coco pops and strawberry pops.  Nor is pop the element which justifies registration of above mentioned marks like fruity pop, or acceptance of Bi-Lo Pty Limited’s trade mark bi-lo rice popps.  He reminds me that some 63 marks containing these elements co-exist in class 30 alone.  He also points to marks such as nutty pops, sunpops and tootsie pops (supra), which are registered for good that overlap with the Kellogg Company trade marks.  And he notes that nutty pops is not confined to nut products.  He says that in all of these marks it is necessary to look and compare the whole marks.  He submits that registration has been allowed on that basis, sometimes as a result of evidence, and frequently with only a part B result.  And he points out that although Kellogg Company may have achieved registration of the word pops in some overseas jurisdictions, it has never been registered solus, in the Australian jurisdiction.

pop, pops, popp or popps, says Mr Oberin, principally serve a descriptive function.  This is not only evident from the very many marks in class 30 which include these words, but it is borne out by Mr Wilson, who states that other traders have adopted the styles no names rice popps and no frills rice popps.   Ms Johnston objected that this statement is not supported - but there is no evidence to show that it might be wrong. I therefore accept that other traders are using pop, pops, popp or popps as ordinary descriptions of rice breakfast cereals, and, as instanced by Messres Wilson, Flynn and McLeish evidence, that these cereals may be referred to as “popped rice products”.

In relation to distinctiveness in the mark bi-lo rice popps, Mr Oberin pointed to Bi-Lo Pty Limited registrations, and he draws my attention to Ms Foreman’s second exhibit.  This shows the word bi-lo registered 23 times across a range of classes including class 30. Number 433925,  is the word bi-lo, registered in Part B for all goods in class 30.  This mark proceeded to registration on the basis of evidence.  In the face of these registrations, Mr Oberin submits, I can not discount bi-lo as a non-distinctive element.  The extent of use, the presence of the numerous registration, and the evidence from Messrs  Wilson, Flynn and McLeish, bear witness, he says, to the fact that the word bi-lo is capable of becoming distinctive, or has become distinctive. 

In response to Mr Kirov’s evidence, Mr Oberin points out that a feature of generic brands is the anonymous nature of the manufacturer.  The Channel 7 clip mentions that retailers are not inclined to disclose the manufacturers of their generic lines.  Sometimes contractual arrangements preclude them from doing so. This, says Mr Oberin, is information which is just as widely known as the fact that national brand manufacturers may sometimes manufacture the goods, and it invalidates the assumption that the word popps in the applicant’s trade mark, will be taken to indicate the opponent’s association with any generic brands.   His argument  is that while national brand leaders may provide goods  for generic packaging, it is common knowledge that they would not wish to disclose this fact, and consequently it is unlikely that consumers would expect to see any brand leaders associating their trade marks with generic goods.

Discussion on the question of deceptive similarity

First, is the question of whether, in the context of class 30 good in general, and cereal products in particular, pops is a word which is predominantly descriptive or distinctive.  The state of the Register certainly indicates the former.  As mentioned, Ms Foreman discovered some 125 marks continuing pop or pops or a phonetic equivalent.   58 of these are currently registered marks and Ms Foreman extracted details on a further dozen or so marks which, over the years, have been removed from the Register. The co-existence in that field of marks like coco pops,  chickpop,  krunchi-pops,  sunpops,  nutty pops  and  tootsie pops - all registered in the names of different proprietors, and all (regardless of the exclusion of breakfast cereals from chickpop and nutty pops) encompassing cereal foods, indicates to me that the Registrar has viewed pops as a descriptive word.  When, in comparing marks, a common element is regarded as descriptive, or common to the trade, the focus shifts to other features (Coca-Cola Co. (Canada) Ltd. -v- Pepsi-Cola Co. (Canada) Ltd. (1942) 59 RPC 127 particularly Lord Russell at p134), and to the total impression of the marks. The view that pop is essentially descriptive, and the approach indicated by, inter alia, Lord Russell, has resulted in the crowded field documented in Ms Foreman’s evidence. Comparisons of applications in class 30 have clearly, therefore, not centred on  the descriptive component pop, but on the whole marks.

The evidence in Mr Wilson’s declaration, appears on the whole to vindicate the Registrar’s attitude.  As I mentioned, Ms Johnston takes issue with his statement that other traders have adopted the styles no names rice popps and no frills rice popps, but she has produced no evidence to show that Mr Wilson is wrong.  Likewise, there is nothing to show that Messres Wilson, Flynn and McLeish’s use of the term “popped rice products”  is not in line with current use.

My conclusion on this first point, is that in respect of cereal products, pop  and pops function as descriptive words.

I turn next to compare the subject mark bi-lo rice popps with each of the five Kellogg Company trade marks. The common feature of these are the words pop, pops,and  popps which, I have found, is descriptive material. The subject mark, however, is distinguished by the word bi-lo  -  a word which Bi-Lo Pty Limited has had registered for class 30 goods for over 10 years. Evidence of use showed that in 1985 this word was capable of becoming distinctive of class 30 goods, and the opponent has not produced anything to show why, as of 1990, the prospect had diminished.  I find, on the contrary, that on current evidence bi-lo is now a very well known mark, and that its presence and standing as a prominent and initial part of the application mark, operates to preclude any deception or confusion with any one of the opponent’s five trade marks.  On reflection I am not surprised that Bi-Lo Pty Limited’s independent witnesses are able to say they do not know of any confusion between the applicant’s trade mark and the Kellogg Company marks.

There is, however, Kellogg Company’s further argument, that application of bi-lo rice popps to generic goods will give rise to deception and confusion because the word popps will be taken to indicate that Kellogg Company is the manufacturer behind the bi-lo goods.  

This scenario seems to me to assume a degree of considered contemplation that is not in keeping with the simple exercise of purchasing breakfast cereals.  It also, I think, assumes a greater appreciation of the working of generic brands than might rightly be assumed.  Certainly, the video clip indicates that a report on generic marketing has had some air time.  But the report was a brief segment tucked within a current affairs program and, I gather, had but a single airing. That, together with one article in The Australian Consumers Association magazine Choice,  is not, I find, convincing evidence that a significant number of people who buy breakfast cereals, are aware of the fact that generic brands are at times manufactured by the brand leaders.  The scenario further depends, however, on the premise that the word pop or pops is distinctive of Kellogg Company’s goods;  that purchasers will note that bi-lo rice popps contains the word popps; and will then wonder whether bi-lo rice popps are manufactured by Kellogg Company for Bi-Lo Pty Limited.  I do not think there is evidence to maintain this line of argument, and I am not prepared to accept it. Moreover, I have found that the words pop and pops perform descriptive rather than trade mark functions, and so this argument falls on the premise that these words have distinctive trade mark value. Taking all these matters into account, I reject the submission that the habits and observation of purchasers  will lead buyers to assume that the trade mark bi-lo rice popps indicates a connection with Kellogg Company.  

My finding that the trade mark bi-lo rice popps is not deceptively similar to any of the five Kellogg Company trade mark thus remains unchanged.

Conclusions re s33 ground

I have found that bi-lo rice popps is neither substantially identical nor deceptively similar to any of the opponent’s trade marks. As a result, the section 33 ground of the opposition does not succeed.

The section 28 grounds

Section 28(a) is a question first, of whether the trade marks is likely to lead to deception or confusions.  Argument put by Ms Johnston in support of this question again depended on the  five Kellogg Company trade mark registrations listed at the beginning of these reasons.  I have found that bi-lo rice popps is not deceptively similar to any of them, and so the section 28(a) ground likewise fails.  

Section 28 (d) requires evidence of some blameworthy action on the part of Bi-Lo Pty Limited.  I note Mr Wilson’s statement that in developing the trade mark bi-lo rice popps he knew of Kellogg Company’s marks and “did not consider that use of bi-lo rice popps would in any way conflict with such prior use”.   In light of my previous findings, this seems to me to be a very reasonable conclusion.  Adoption of the mark I find has not been shown to have been blameworthy, and  I have been shown no evidence of any other blameworthy action, or any other reason as to why the subject mark is not entitled to protection in a court of justice.  I dismiss this ground.

The distinctiveness ground.

The final ground to be argued, is the question of distinctiveness.  First, as pointed out by Mr Oberin, the trade mark was not accepted as a distinctive mark, but as a mark capable of becoming distinctive.  It was thus found to meet the criteria for a Part B.

popps is nothing more than a phonetic equivalent to pops, which  I have found is descriptive and, on the basis of its popularity as a constituent part of trade marks in class 30, it now  looks set to become  common to the trade. rice indeed, is nothing more that the name of a cereal and has no distinctive qualities at all.  The capacity to distinguish therefore depends on the word bi-lo and the overall impression of the mark as a whole. Certainly bi-lo is a phonetic rendering of the words  buy low and in respect of any retailing goods, these words indicate low price.  However, buy low is not a commonplace description, it is not a phrase in regular use, nor is it an expression that is naturally adopted to proclaim that goods are cheap.  Moreover, the expression under consideration is not simply the words buy low but a phonetic misspelling.  This in itself does not render the expression inherently fit for a Part A or even for that matter for Part B.  However, when all these matters are added up, and the precedent of Bausch and Lomb Inc -v- Registrar of Trade Marks (1980) 28 ALR 537 is taken into account, words of this kind can succeed on the basis of significant evidence.

bi-lo has clearly been supported by significant evidence, and I consider that on account of that evidence the trade mark bi-lo rice popps is rightly accepted as one that is capable of becoming distinctive.

Decision

The opposition has failed to establish any one of the grounds it cited under sections 24, 28 and 33.  Consequently I find for the applicant.  The opposition is dismissed, and unless the matter is appealed, I direct that this trade mark proceed to registration.

Costs

Both sides applied for costs.   There is no reason why they should not follow the cause, and I therefore award them to the trade mark applicant, Bi-Lo Pty Limited.

Helen R. Hardie
Deputy Registrar

27 February, 1996