Brakes plus Pty Ltd v Midas International Corporation
[1997] ATMO 20
•5 May 1997
Trade marks act 1955
decision of a delegate of the registrar of trade marks with reasons
Opposition by MIDAS INTERNATIONAL CORPORATION to Application No 561746 in the Name of BRAKES PLUS PTY LTD
As provided in the transitional provisions of Part 22 of the Trade Marks Act 1995 the provisions of the Trade Marks Act 1955 continue to govern this opposition. Accordingly, unless otherwise specified, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.
The application
Brakes Plus Pty Ltd, a Victorian company, applied on 15 August 1991 to register a series of two trade marks. The features of the two marks are essentially identical, one being in black and white while in the other the octagonal shape is coloured red and the lettering is in yellow:
The application was eventually accepted for registration and was so advertised on 24 March 1994 in respect of the following services:
Installation, servicing and repair of brake systems, suspension systems and other automotive parts and accessories
which are services included in Class 37 of the International Classification of Goods and Services.
The acceptance of the application was subject to the applicant’s consent to the following endorsements:
Registration gives no right to the separate exclusive use of
the words BRAKES and PLUS.*
It is a condition of registration that the blank space in
the mark will, when the mark is in use, be left vacant or be
occupied only by matter which is wholly descriptive and has
no trade mark significance in relation to the services for
which the mark is registered.*
The coloured mark in the series of trade marks is depicted
in the colours RED and YELLOW as shown in the representation
attached to the application form.*
Accepted on provision of evidence of use.*
The preceding endorsement(s) were recorded prior
to commencement of the Trade Marks Act 1995.*
The opposition
On 6 September 1994 notice of opposition to the registration of the trade mark was lodged by Midas International Corporation of Chicago, United States of America, pursuant to s49 of the Act. The grounds of opposition were widely drawn and involved the proprietorship of the mark, its distinctiveness, the applicant’s intention to use the mark, the likelihood of the use of the mark by the applicant leading to deception or confusion and the use of the mark being contrary to law and the public interest.
The evidence
The evidence stages of the proceedings were completed on 15 September 1996. The evidence consists of the following:
evidence in support
declaration of Jennie Lynn Ruffin, Legal and Property Manager of Midas Australia Pty Limited, together with Exhibits “A” and “B” (the first Ruffin declaration)
evidence in answer
declaration of John Leslie Rippon, Managing Director of Brakes Plus Pty Ltd, together with Exhibits JLR1 to JLRXX
trade declarations of John Kalnins, Peter J Smith, Julie Pike, Joe Bonnici, Chris Marturano and Ron McNamara
declarations of Jayantha Fernando, John Emory Novotny, Terence Joseph Pearce and Brian Russell, all franchisees of BRAKES PLUS, together with completed questionnaires from customers
evidence in reply
declaration of Jennie Lynn Ruffin together with Annexure “A” (the second Ruffin declaration)
On 18 November 1996 Spruson & Ferguson, patent attorneys for the opponent, requested that the matter be set down for hearing. This was done and the hearing took place in Melbourne on 5 February 1997. Mrs Annette Freeman of Spruson & Ferguson appeared for the opponent and Ms Carolyn Harris of Watermark, patent attorneys, for the applicant.
Submissions
Mrs Freeman began her submissions by noting that the 1955 Act applied to the opposition. She went on to state that she intended to pursue all of the grounds set out in the notice of opposition except for those relating to s40 (proprietorship), s28(use of mark contrary to law and public interest) and s24 (distinctiveness of mark). In particular she said she intended to address s33 in reliance on two registered trade marks of the opponent, nos 300312 and 326567. These trade marks are shown below:
326567
Those trade marks are registered in respect of the following goods/services:
| 300312 | Class 12 | Automobile spare parts and accessories including mufflers for internal combustion engines and parts thereof-namely, tail pipes, exhaust pipes, muffler clamps, dual muffler kits, comprising exhaust piping, mufflers, tail pipes and associated hangers, exhaust extensions and hollywood type mufflers; automobile tyres; fan belts; shock absorbers and parts thereof; seat covers; rear view mirrors; brake parts namely shoes, cable, drums, housings, clevis pins and rods; fender skirts; leaf springs and coil springs; convertible auto tops; rubber white wall tyre discs; floor mats; oil |
| 326567 | Class 37 | Services relating to the inspection, adjustment, repair and installation of automotive brake systems and parts therefor, of automotive engines and parts therefor, of automotive exhaust systems and mufflers and parts therefor, of automotive transmission and parts therefor, of shock absorbers and parts therefor, of seat belts and accessories therefor, of front end parts, of positive crankcase ventilation valves and systems used in internal combustion engines for eliminating crankcase emissions and parts therefor, and of automotive tyres and to the alignment and balancing of automotive vehicle wheels |
The registrations are subject to the following conditions:
| 300312 | Registration of this trade mark shall give no right to the exclusive use of the words "MUFFLER SHOPS"* The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.* |
| 326567 | It is a condition of registration of the trade mark that it will not be assigned separately from the trade mark subject of registration number A326566. It is a condition of registration that the blank spaces in the mark shall, when the mark is in use, either be left vacant, or be occupied only by matter which is wholly descriptive and has no trademark significance in relation to the non-trade mark character or to be occupied by the mark subject of registration No. A326566 with or without addition of non-distinctive matter.* The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.* |
The trade mark 326566 referred to in the endorsements on 326567 consists of the word MIDAS and the mark is registered in respect of the same services as those of 326567.
Mrs Freeman submitted that there was no contention that the services of the opponent were not the same or of the same description as those applied for by the applicant and that therefore the only question was whether the marks were substantially identical or deceptively similar. She concentrated her argument on the latter proposition. While conceding that the octagonal and oval shapes were not the same, she said that the marks would be used on poles outside business premises and would be seen from the roadway from a distance. She pointed out that the outline of the oval and arrow of the opponent’s trade marks had been accepted by the Registrar as capable of becoming distinctive and in the circumstances posited would very likely be confused with the applicant’s trade mark. The nature of the customers for the respective goods and services would be the same.
Mrs Freeman stressed the importance of the “idea” conveyed by the two marks: Jafferjee v Scarlett (1937) 57 CLR 115 and of the “essential feature ” of the marks: Saville Perfumery Ltd v June Perfect Ltd: (1941) 58 RPC 147. The marks were not to be compared side by side but rather the impression produced on the minds of ordinary purchasers considered: Australian Woollen Mills v F S Walton & Co Limited (1937) 58 CLR 641. She emphasised also that the onus was on the applicant for registration to show that there was no “real, tangible” danger of confusion and that the use of the mark would not cause purchasers to wonder whether it might not be the case that the services came from the same source as the opponent’s: Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. She also pointed out that in deciding the matter the appropriate test was not that applied in passing off: Re Hack’s Appn (1941) 58 RPC 91.
Mrs Freeman then turned to consider the applicability of the honest concurrent use provisions of s34 of the Act. She said, firstly, that the matters to be considered were set out in the leading case of Alex Pirie & Sons Ltd’s Appn (1932) 49 RPC. She then referred to the application of the principles of that case in K Mart Corporation v Artline Furnishers Supermarket Pty Ltd (1991) 23 IPR 149. The matters considered in that case were:
The honesty of the concurrent use.
The extent of the use in area, duration and volume.
The degree of confusion likely to ensue.
Whether any instances of deception have occurred.
The balance of convenience.
The effects of any terms or conditions imposed.
She noted also that in that case it was said that the honesty of the concurrent use was fundamental to the applicability of the subsection 34(1). She also noted that the parties’ respective rights were to be determined as at the date of the opposed application: Southern Cross case, supra, and pointed out that at that date the applicant had had a mere 13 months’ use of the trade mark and not very substantial sales in dollar terms. As to the honesty of the adoption of the mark by the applicant she said that no detailed background was given in the evidence in answer but submitted that in fact there were circumstances from which I could infer that the adoption was not made with that degree of “common honesty” required. These were that Mr Rippon who was one of the persons who established the Brakes Plus business was a former franchisee of Midas Australia Pty Ltd and would therefore certainly have been familiar with the OVAL AND ARROW trade mark of Midas. Moreover, anyone in the particular trade, whether previously associated with Midas or not, would have been aware of the trade mark which had been in use in Australia since 1976 by a major franchise operation in exactly the same market. In this case, she said, no honest reason for the adoption of the identical arrow device had been given.
As to the degree of confusion likely to ensue Mrs Freeman referred to Olin Corporation v Pacemaker Pool Supplies (1984) 4 IPR in which the Senior Assistant Registrar referred to the words of Graham J in Buler Trade Mark [1975] RPC 275, 289 :
...as seems clear from Pirie’s case and other cases, the degree of likely confusion is relatively unimportant under [s34(1)] provided the honesty of the applicant is established and it is otherwise just in all the circumstances that his mark should be registered.
She conceded that no instances of actual confusion or deception were shown by the evidence and, as to the balance of convenience, submitted that if the applicant had taken the risk of copying the Midas arrow device it could not now claim to be allowed to continue to misuse that mark on the basis of hardship.
Mrs Freeman went on to point out what she claimed were weaknesses in the applicant’s evidence in answer. As a general comment she noted that most instances of the use of the mark were well after the relevant date at which the parties’ rights were to be assessed, 15 August 1991. All of the trade declarations were dated February 1996 (except for one which is undated), more than four years after the relevant date, and the customers’ questionnaires exhibited to the franchisees’ declarations were entirely undated She seriously questioned a statement in the Rippon declaration that Brakes Plus held 12% of the market for brake component replacement services in light of the fact that Midas, which had been operating since 1976 and averaged about $60 million worth of business a year, estimated that it held only 4% of the Australian market for brake component replacement services. Brakes Plus had only seven service outlets in the Melbourne area. With respect to the trade declarations she submitted that they were very similarly worded and appeared to be in response to very leading questions. Most of the declarants recognised the Oval and Arrow device as indicating services offered by Midas even without the word MIDAS. The fact that they also acknowledged the Brakes Plus logo was hardly surprising, she said, given that the words BRAKES PLUS appeared prominently in the trade mark. As to the declarations of Brakes Plus franchisees she said that they were not, in the first place, independent witnesses. Once again the declarations were very similarly worded and they also recognised the Midas logo. The questions asked were leading and solicited a response to the two marks placed side by side which was not the appropriate test for the determination of the likelihood of deception or confusion. In support of her criticisms of the evidence Mrs Freeman referred to dicta in Broadhead’s Application (1950) 64 RPC 209 and Fox’s Application (1920) 37 RPC 37. As to the weight to be given to opinion evidence on deception and confusion generally she referred to the judgment of Wynn-Parry J in Bayer’s Appn (1947) 64 RPC 125.
Mrs Freeman then pursued further the question of bad faith on the part of the applicant. She submitted that great weight should be given to the fact that no evidence had been put on to show that the BRAKES PLUS mark was honestly adopted and in view of the fact that the Midas mark had been in use for such a long period of time and must surely have been known to those establishing the Brakes Plus business, and that the arrow component of the marks was completely identical, that there was room for an inference that the BRAKES PLUS mark, at least as far as the arrow portion, was not honestly adopted but was rather copied directly from the Midas mark. In this connection she referred to comments of the High Court in Australian Woollen Mills, supra, to the effect that if a mark is adopted for the purpose of appropriating part of the trade or reputation of a rival it must be presumed that the mark is fitted for the purpose and is likely to deceive or confuse (at 657). Or, as it was put more succinctly in Claudius Ashe Sons & Co Ltd v Invicta Manufacturing Co Ltd (1911) 28 RPC 597:
If you find a defendant who is a knave, you may presume that he is not a fool.
The question of bad faith, Mrs Freeman submitted, was relevant to two considerations: firstly, that the mark was not honestly adopted sufficient to support an argument for honest concurrent use under s34, and, secondly, that its adoption indicated that those adopting it considered it to be sufficiently similar to the Midas mark to afford some benefit to them, and that from that it was open to the tribunal to presume that the two marks were sufficiently similar to cause a possible misrepresentation, confusion, deception, or at least to cause customers to wonder about the source of the goods/services. Mrs Freeman also referred for support of that position to the passing off cases Telmak Teleproducts (Aust) Pty Ltd v Coles Myer Ltd (1989) 15 IPR 362 and Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39.
Ms Harris took me to the evidence in answer to the opposition which consists of the leading declaration of John Rippon and various supporting declarations from the trade and from franchisees of the applicant company. She said that the Rippon declaration showed that the trade mark in suit had been used consistently on signage, stationery and in advertising since July 1990. In particular, it had been used in relation to sales, installation, servicing and repair of motor vehicle braking systems, suspension systems and other associated automotive parts and accessories. She emphasised that the words BRAKES PLUS were always present and very obvious. Other exhibits showed use on a variety of stationery products, woven badges worn by staff and advertising materials. Clause 5 of the declaration showed that sales of services under the BRAKES PLUS logo increased in the first three years of business and since then had remained relatively steady. More importantly, she said, the applicant held 12% of the market for brake component replacement services and was therefore the second largest supplier of brake component replacement services. At the time the evidence was prepared the applicant had seven service outlets throughout metropolitan Melbourne all of which except one having operated since at least 1992.
Ms Harris then referred to the declarations of persons in the relevant trade. A review of those declarations demonstrated, she said, that some of the declarants recognised the oval and arrow device as being distinctive of Midas but that half of them did not associate the device with any one particular trader. None of them associated the device with the applicant whereas all six declarants associated the trade mark in suit with Brakes Plus Pty Ltd. She then referred to the declarations of four franchisees of the applicant company appended to which are questionnaires completed by some of their customers. The latter showed, she said, that none of those customers believed that they were obtaining services from Midas. In fact, they recognised the oval and arrow device as being associated with Midas and did not believe there was any way that device could be confused with the applicant’s trade mark. Ms Harris submitted that that evidence demonstrated that there was no confusion in the marketplace between the two trade marks.
With reference to the evidence in reply, the declaration of Jennie Lynn Ruffin, Ms Harris submitted that the photograph annexed to that declaration showed that in the trade mark actually used by Midas the word MIDAS in large letters appeared within the oval while the words EXHAUSTS BRAKES & SHOCKS, also in large letters, occupied the arrow portion of the mark so that the words were the most prominent feature of the mark.. She also submitted that because of the extensive use of the Midas mark throughout Australia many other people than Mr Rippon, as a former franchisee of Midas, would have been aware of the Midas trade mark. In response to the allegation that the Brakes Plus trade mark had only been used in Victoria Ms Harris stated that the applicant had recently opened an outlet in Queensland and intended to expand the business throughout Australia. She reiterated, in answer to the statement that Midas held only 4% of the brake market in brake component replacement services, that, indeed, according to the Rippon declaration, the applicant enjoyed 12% of the same market.
Ms Harris conceded that the respective services of the opponent and the applicant were the same or of the same description so that the only question to be decided was whether the respective trade marks were substantially identical or deceptively similar. She submitted, however, that a comparison of the trade marks demonstrated that they were not so similar. In the first place, she said, the applicant’s mark consisted of an octagon containing the words BRAKES PLUS together with the arrow device while the opponent’s marks were the oval and arrow device and the word MIDAS. She submitted that an oval is quite different in shape to an octagon. Moreover, an octagon is the same shape as a stop sign and in the automotive accessories industry would be seen to have such a connotation. It would not therefore be perceived by customers as in any way similar to an oval. Moreover, while both marks contained part of an arrow, the Midas mark had part of the arrow above the oval whereas the Brakes Plus mark had the arrow only below the octagon. And, furthermore, arrows were used extensively on streetscapes to give directions and therefore could not be considered distinctive or the sole property of any one particular trader. Another difference, of course, was the words BRAKES PLUS which were clearly the most significant part of the applicant’s mark and which would be recalled by the customer. While the words had been separately disclaimed the combination was clearly distinctive.
Ms Harris submitted that no evidence had been put forward to show that customers had been or could have been confused despite six years of use of the opposed trade mark. The applicant had clearly shown, she said, that confusion was highly unlikely especially when the opponent’s device mark was used together with the word MIDAS. As a general proposition where a trade mark combined a device with a word customers would more naturally refer to the word when ordering the product or service. If the verbal features could be readily distinguished the likelihood of confusion through similarities in other features of the marks would be correspondingly reduced. The words BRAKES PLUS clearly distinguished the opposed mark from the MIDAS trade marks, both the oval and arrow device alone as well as the device in combination with the word MIDAS. She said that despite over six years of use of the mark in suit the opponent had never approached the applicant about the use of the mark, had not suggested that it had considered taking action for infringement or under the Trade Practices Act.
Ms Harris referred to Arthur Fairest’s Appn (1951) 68 RPC 197 in support of the proposition that in opposition proceedings the opponent carries the burden of establishing prior use or reputation. She said that the onus was then on the applicant to show that there was no reasonable likelihood that the trade mark would deceive or cause confusion. She submitted that the applicant had discharged that onus by virtue of the declarations of franchisees of Brakes Plus Pty Ltd. Those declarations all demonstrated, she said, that there was no reasonable likelihood that the use of the trade mark would deceive or cause confusion. In particular, the customers of Brakes Plus did not believe that they were purchasing services from a party other than Brakes Plus.
Decision
I wish firstly to examine in a little more detail the evidence which Ms Harris claimed clearly demonstrated that there was no reasonable likelihood of deception or confusion as a result of the use by the applicant of its trade mark. The “trade” declarations reveal the following:
John Kalnins states that his company is “involved in the manufacture of disc brake pads” and that he has been engaged in such trade for 35 years.
If he saw the following signage:
he would not believe that the services were offered by Brakes Plus Pty Ltd but would think it possible that such services were offered by “Midas”.
If he saw the following signage:
he would believe that the services were offered by BRAKES PLUS PTY LTD.
Peter J Smith states that he is a director of Corporate Giftware Co and has been involved in his industry for 9 years and because of the nature of his job he has “regular contact” with various “mechanical servicing outlets” and is therefore entitled to make his declaration.
If he saw the following logo:
he would not believe that the services were offered by BRAKES PLUS PTY LTD but does not associate the logo with any company.
If he saw the following logo:
he would believe that the services were offered by BRAKES PLUS PTY LTD
Julie Pike states that she is the manager of CHECKPOINT WHOLESALE, has been involved in the automotive repair industry for 10 years, has “regular contact” with most automotive servicing companies and hence is “authorised” to make her declaration.
If she saw the following street signage:
she would not believe the services were offered by Brakes Plus Pty Ltd and does not recognise the logo as being associated with any one particular trader.
If, however, she saw the following street signage:
she would believe that the services were offered by BRAKES PLUS PTY LTD
Joe Bonnici states that he is a bank manager, has been involved in the bank profession for 30 years, has “regular contact” with various small operators within the motor vehicle servicing industry and hence is entitled to make his declaration on the basis of that contact.
He then refers to the following logo:
and states that if saw that logo on street signage he would believe that the services were being offered by Midas Mufflers.
He then refers to the following logo:
and states that he would believe that services were being offered by Brakes Plus Pty Ltd and no other party.
Chris Marturano states that he is the branch manager of Consolidated Bearing Company, is a “bearing trader” and by virtue of his “regular contact” with all automotive repairers and suppliers is entitled to make his declaration.
If he saw the following signage:
he would believe that services were being offered by Midas Muffler.
If, on the other hand, he saw the street signage:
he would believe that the services being offered under the signage would be offered by Brakes Plus.
Ron McNamara states that he is a retailer of tools, has been involved in the industry and has “regular contact” through his business with most automotive outlets.
If he saw the following street signage:
he would not believe that the services offered under that logo were by Brakes Plus Pty Ltd but he does not associate the logo with any particular party.
If he saw the following street signage:
he would believe that the services were offered by BRAKES PLUS PTY LTD.
It is sufficiently clear, I think, from the common format and wording of the above declarations that they had been prepared for the signature of the declarants. In that they are somewhat similar to a questionnaire. The respondents, having been made firmly aware by the wording of clause 3 of the existence of a company named Brakes Plus Pty Ltd, were then confronted in clause 4 with the applicant’s trade mark with the words Brakes Plus prominently displayed. It is hardly surprising, as Mrs Freeman pointed out, that the declarants promptly identified the mark as associated with the aforementioned Brakes Plus Pty Ltd. In this respect the statements in all the declarations are tantamount to answers to leading questions. Furthermore, only one, possibly two, of the declarants are directly concerned in the relevant trade. John Kalnins stated that he was “involved” in the manufacture of disc brake pads and had been so for 35 years, but in what capacity he had discharged that “involvement” is not stated. Julie Pike’s “involvement” in the “automotive repair industry” may possibly have some connection, near or remote, with the relevant services. For the rest, the declarants are a director of a giftware company, a “bearing trader”, a bank manager and a retailer of tools whose only connection with the relevant services seems to have been the mysterious “regular contact” enjoyed with some, or various, or most or, in one case, all automotive repairers and suppliers. Half of the six declarants recognised the Midas device mark as associated with Midas. Moreover, most of the declarations refer only to the use of the trade marks on street signs ignoring all other possible uses of the marks. On the whole I find I can give very little weight to this evidence which Ms Harris claimed clearly demonstrated that there was no reasonable likelihood of deception or confusion resulting from the applicant’s use of the mark in suit.
I turn next to consider the declarations of the four franchisees of the applicant company. These declarations also have a common format and wording and I will give a representative sample of the contents of the declarations. After identifying himself/herself as a franchisee of a particular franchise and giving details of experience in the trade the declarants go on to state:
I believe that customers come to BRAKES PLUS because they are aware that we offer a service only in relation to brakes and thus have expertise in this area. They would prefer to obtain expert advice from a specialist than taking their motor vehicle to a mechanic who does not have any specialist expertise in relation to brakes.
I have never had a customer in my BRAKES PLUS franchise who believed that he/she was obtaining automotive services from a company other than BRAKES PLUS. I have never had a customer who believed that he/she was obtaining automotive services from MIDAS.
I now refer to the following device:
I do not believe that a purchaser of automotive services, upon seeing this device on signage would believe that the services were offered by BRAKES PLUS PTY LTD. It is possible that a customer seeing the above sign may consider that services being offered under this trade mark were being offered by a MIDAS outlet.
I personally associate the above device with MIDAS.
I now refer to the following device:
I believe that a customer seeing the above symbol on signage would consider that automotive services offered under the symbol would be offered by BRAKES PLUS PTY LTD and would not believe that the services would be offered by any other party.
Refers to customer questionnaires exhibited to the declaration.
I do not believe that customers could confuse the BRAKES PLUS trade mark with the MIDAS trade mark. The BRAKES PLUS trade mark is always used with the words BRAKES PLUS in the octagonal device and hence no customer could possibly think that services offered by my franchise were being offered by MIDAS.
The responses of the declarants in clauses 5, 6 and 8 call for an opinion as to the likelihood of deception and confusion among members of the public in general.
In Payton & Co Ld v Snelling, Lampard, & Co Ld 17 RPC 628, at 635 Lord Macnaghten said:
One word with regard to the evidence I should like to say. I think, as I have said before, that a great deal of the evidence is absolutely irrelevant and I do not myself altogether approve of the way in which the questions were put to the witnesses. They were put in the form of leading questions and the witnesses were asked whether a person going into a shop as a customer would be likely to be deceived and they said they thought that he would. But that is not a matter for the witness; it is for the Judge. The Judge, looking at the exhibits before him and also paying due attention to the evidence adduced, must not surrender his own judgment to any witness whatever.
That was followed by Lord Halsbury in North Cheshire and Manchester Brewery Company v Manchester Brewery Company [1889] AC 83 where he said in relation to the words of Lord Macnaghten above:
...which I take to mean this, that the judge is not to take the answers of witnesses on the very question that he is to try to the surrender of his own judgment
Again, in Addley Bourne v Swan and Edgar, Ld 20 RPC 105 Farwell J said, at 118:
It only remains then to call the evidence of people who can say that they themselves would be deceived. Now it is obviously extremely difficult to get any such evidence. Nobody likes to admit that he is so extremely foolish, as in many cases he would have to do. The result is that unless it is left to the eyesight of the Judge to judge for himself, there is practically no evidence open to the Plaintiff in an action of this sort.
He went on to say (1903) 1 Ch 211 at 224:
It appears to me that there is also another reason against the admissibility (that is, of expressions by witnesses of the opinion that a particular mark is or is not calculated to deceive the public), and that is that I do not see how you can call any individual to give what is in truth expert evidence as to human nature, because what they are asked in this form of question is, not what would happen to them individually, but what they think the rest of the world would be likely to suppose or believe. They are not experts in human nature, nor can they be called to give such evidence, and, apart from admissibility, one cannot help feeling that there is a certain proneness in the human mind to think that other people are perhaps more foolish than they really are. I do not think that Carlyle is alone in his estimate of the intelligence of the majority of the inhabitants of these islands. Therefore that is ruled out as a matter of evidence.
In Claudius Ash, Sons & Co Ltd v Invicta Manufacturing Company Ltd (1911)28 RPC 597 at 608 Buckley LJ said:
To my mind, in all these cases the judge necessarily must proceed upon evidence . You cannot put to any particular witness the question: “Is this article calculated to deceive?”. That is for the judge to determine - it is the point in issue; you can only ask a witness: “Would this deceive you?” And if he says it would, then ask him how it deceives him. Of course that would involve all the various articles which are sold in the trade, but it is for the judge to determine upon the evidence adduced by persons competent to give evidence upon the subject, and to give evidence which satisfies the mind of the tribunal, that they, or certain of them, are deceived or to assign reasons why they would be deceived, and then it is for the judge to say whether there is deceit or not.
The judgment in Bourne v Swan & Edgar, supra, was approved by the High Court of Australia in Don v Burley (1916) 22 CLR 136. Barton J quoted the passage cited above and went on to say:
I am of the same opinion. I do not think that much value is to be attached to such declarations concerning the likelihood of deception as we have in this case, and, in fact, I think they are not evidence on that question. I judge by my eyesight , and I think that there is no likelihood of deception arising out of the use of these two devices concurrently. I do not think that a person of ordinary intelligence - and that is really the hypothetical purchaser - would be likely to be deceived, or, as I put it in William Charlick Ltd v Wilkinson & Co Proprietary Ltd 16 CLR 370 at 377, “Looking at these two labels not placed closely in juxtaposition and putting oneself as nearly as possible in the position of an intending purchaser, it seems to me that a person having an ordinary recollection of one label would not be deceived into asking for a packet bearing the other label, seeing it in a shop. I am talking of a person of ordinary sense, not such a person as Farwell J spoke of in the passage I have quoted”. Using my own observation and intelligence in the way I am called upon to do in a case of this sort, I do not think that a person of ordinary intelligence and memory would be deceived after first seeing one of these labels and then within a reasonable time seeing the other. He would not take one for the other....There is a common supposition that the criterion is, would an ignorant customer be deceived? That is not the criterion.
In Thomas Bear & Sons (India) Ld v Prayag Narain & Jaggennath (1941) 58 RPC 25, a decision of the Privy Council, Viscount Maugham said:
Evidence of actual deception may be available, and if available may be very valuable. There is no such person as an expert in human nature, and it is now well settled that a witness cannot be called to say that it is likely that purchasers of the goods will be deceived. This can only be a matter of opinion formed after the dispute has arisen and too often without any judicial consideration of the opposing contentions. On the other hand a person who is accustomed to buy the articles in question may be called to say that he would himself be deceived, and cross-examination will often show what weight should be attached to such a statement.
A more recent case in which the same principle was affirmed is Mothercare UK Ltd v Penguin Books Ltd [1988] RPC 113. In that case Dillon LJ said, at 116:
The question whether there is a misrepresentation, like the question whether there is a likelihood of deception, is a question for the tribunal and not a matter for a witness.
There is one recognised exception to the acceptability of evidence as to the likelihood of deception and confusion. It was stated by Lord Evershed in George Ballantine & Son v Ballantyne Stewart & Co [1959] RPC 273 at 280:
It is no doubt true ... that the question whether a mark is likely to cause confusion or lead to deception is the question for the court’s decision and, accordingly, that it is not legitimate for a witness to state or suggest, by way of evidence, expressed in general terms, the answer which it is the court’s duty to give. But it is, in my opinion, going too far to say that a witness expert in the trade which is involved in the proceedings before the court, may not legitimately say, in giving evidence, that according to his experience of how the business in which he is and has been concerned is conducted, traders or customers will adopt certain characteristics or practices; though the weight to be attached to such evidence must always be a matter for the court.
A similar view was expressed by Lord Diplock in “GE” Trade Mark” [1973] RPC 297 at 321:
My Lords, where goods are of a kind which are not normally sold to the general public for consumption for domestic use but are sold in a specialised market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in the market as to the likelihood of deception and confusion is essential. A judge, though he must use his commonsense in assessing the credibility and probative value of the evidence is not entitled to supplement any deficiency in evidence of this kind by giving effect to his own subjective view as to whether he himself would be likely to be deceived or confused. In the instant case this would apply to the large industrial electrical machinery ... But where goods are sold to the general public for consumption or domestic use, the question whether such buyers would be likely to be deceived or confused by the use of the trade mark is a “jury question” ... The judge’s approach to the question should be the same as that of the jury. He, too, would be a potential buyer of the goods. He should, of course, be alert to the danger of allowing his own idiosyncratic knowledge or temperament to influence his decision, but the whole of his training in the practice of the law should have accustomed him to this, and this should provide the safety which in the case of a jury is provided by their number.
This exception was applied by Knox J in Island Trading Co and Others v Anchor Brewing Co and Another [1989] RPC 287 to admit opinion evidence from persons in the relevant trade.
On the other hand, however, in Bayer Products Ld v A Wander Ld (1947) 64 RPC Wynn-Parry J said of such evidence:
A number of persons, all members of the Pharmaceutical Society of Great Britain, have made statutory declarations on behalf of the Appellants in which they say that, if a product is put on the market under the name “Diasil”, there is bound to be confusion between the two marks.
Such evidence as this is, in my view, quite inadmissible, and I leave it entirely out of account in considering this matter.
On behalf of the Respondents a number of persons, enjoying the same qualification, have each expressed the view for himself that he would not confuse the two names if used in regard to two different pharmaceutical preparations.
This type of evidence has the initial advantage of being admissible and, on the view that I take of the matter, is not without importance.
Being a potential buyer of the services here in question and having no idiosyncratic knowledge or temperament to declare it seems that I should treat the question whether such buyers would be likely to be deceived or confused by the use of the applicant’s trade mark as a “jury question”. However, these cases were of course all court cases and it is commonly said that the Registrar acting as a tribunal in opposition proceedings is not bound by the strict rules of evidence as they apply to a court. However, given the strong condemnation by the courts of the sort of opinion evidence which attempts to pre-empt the decision of the tribunal and given also that the evidence of franchisees is not independent I find that in the case of this evidence also I can give it no probative weight at all.
The questionnaires collected by the franchisees and exhibited to their declarations at least have the merit of being the type of evidence which Wynn-Parry declared to have the initial advantage of being admissible since they seek to elicit customers’ own reactions in the face of allegedly confusing or deceptive trade marks. However, despite that initial advantage the evidence suffers from some of the same deficiencies as the “trade” declarations. The questionnaires are all in the same form and consist of five questions:
When you brought your vehicle to a BRAKES PLUS outlet today for service, what type of service did your vehicle require? (eg brakes, suspension or other?)
Why did you choose the services offered by BRAKES PLUS PTY LTD rather than those of another company?
If you saw the following street signage, would you believe the services were being offered by a BRAKES PLUS PTY LTD franchise or another company? If so, which company?
If you saw the following street signage, would you believe the services were being offered by a BRAKES PLUS PTY LTD franchise or another company? If so, which company?
With what company (if any) do you associate the following symbol?
In response to question 1 all 16 respondents confirmed that they had wanted services in connection with brakes. Five of the respondents chose Brakes Plus because of the quality of the service provided, four because of the prices charged, four because of the specialist nature of the services, three because of convenience, including one who answered “next door”, two because they had seen advertisements on television or in the yellow pages and one because of trust in the persons providing the services. Eleven of the respondents did not recognise the “street signage” of question three and five correctly identified it as associated with Midas. Not surprisingly, 14 of the respondents presented with the “street signage” of question 4, prominently displaying the words BRAKES PLUS, correctly concluded that the services offered were by BRAKES PLUS PTY LTD, although one questionnaire drew a blank and one respondent did not draw the obvious conclusion. In response to the last question six of the respondents this time associated the “symbol” with Midas including one who had not done so in answer to question three.
This sort of evidence is fundamentally flawed inasmuch as, being in the nature of survey evidence, it was gathered from respondents who were not randomly selected but who were exclusively customers of one of the parties to the dispute. Moreover, the questions were leading, the words BRAKES PLUS or BRAKES PLUS PTY LTD being presented to the respondents in large bold letters in all the questions but the last. Once again I find that I can give very little weight to such evidence.
Section 33
With respect to s33 of the Act it was common ground that the services in respect of which Midas is the registered proprietor under 326567 are the same services or services of the same description as the services in respect of which Brakes Plus seeks to register its trade mark, while the goods of the registered mark 300312 are closely related to those services. The question for determination therefore is whether the respective marks are substantially identical or deceptively similar. The test of substantial identity is that propounded by Windeyer J in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd 1961 109 CLR 407, 414-415
In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or similarity that emerges from the comparison ...
Comparing each of the opponent’s registered marks with that of the applicant I think the differences are so obvious that there is no question of their being considered to be substantially identical. In the case of 300312 the words MIDAS and MUFFLER SHOPS are so different from the words BRAKES PLUS as to remove any doubt on the matter. The blank device mark of 326567 is again quite different from the applicant’s mark which includes the words BRAKES PLUS.
In the case of deceptive similarity, on the other hand, the test was stated by Dixon and McTiernan JJ. in Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641 at 658:
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. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part. 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 observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight.
In the case of the opponent’s mark 300312 and the applicant’s mark there can be little doubt that the former would be known by the name MIDAS and the latter BRAKES PLUS. These are so different in sound and meaning that I do not believe that their use would lead to the deception or confusion of a substantial number of persons (per Evershed J in Smith Hayden & Co Ltd's Application (1946) 63 RPC 97:
Assuming user by the opponent of its mark ...in a normal and fair manner for any of the goods covered by the registration of that mark ... is the Registrar satisfied that there will be no reasonable likelihood of deception and confusion amongst a substantial number of persons if the applicant also uses its mark ... normally and fairly in respect of any goods covered by their proposed registration?)
In the case of the device mark 326567, however, the comparison is somewhat different as it does not readily lend itself to being called by a name. Also, while it seems to be fairly obvious that in the normal course of trade the blank spaces in the mark will not be left blank, as is required by the condition of registration, but rather will be occupied either by the registered trade mark MIDAS or by other non-distinctive matter such as MUFFLER SHOPS or, as shown in the photograph exhibited to the declaration of Jennie Lynn Ruffin in reply, by such words as EXHAUSTS SHOCKS & BRAKES. Nevertheless the device is a registered trade mark and I am required, for the purposes of s33, to assume user of the mark as registered in a normal and fair manner for any of the services in respect of which it is registered. There is no doubt that in some at least of the circumstances in which it is used, as the evidence shows, that is, on street signs, it is a very weak mark since the arrow serves a purely functional purpose and the oval shape is no more than a vehicle for the words contained in it. It is in fact overwhelmed by the content. It is therefore understandable that the applicant’s evidence and submissions focused fairly closely on the use of the respective marks in those particular circumstances. It is necessary, however, to make, as it were, a comparison in the abstract ignoring the peculiar circumstances of the principal uses of the marks. Given that the opponent’s device mark is, as I have said, a weak mark relatively little variation from it is required to differentiate it from a rival mark. In this case I think that the change of the oval shape to an octagonal shape is sufficient to achieve that differentiation quite apart from the addition of the words BRAKES PLUS. I also have in mind Ms Harris’ submission that the octagonal shape is the shape of a stop sign and carries that connotation. I think there is force in that argument. I have therefore come to the conclusion that the applicant’s mark is not deceptively similar to either of the opponent’s registered trade marks.
Section 28
In considering the likelihood of deception or confusion in terms of s28(a) I must have regard to the extent of the reputation of Midas in its trade marks. To refer again to the words of Evershed J. in Smith Hayden & Co Ltd's Application, supra:
Having regard to the reputation acquired by the [opponent’s trade mark] is the Registrar satisfied that the mark applied for, if used in a normal or fair manner in connection with any goods covered by the registrtion proposed, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons?
The evidence of the extent of Midas’s reputation is to be found in the declaration of Jennie Lynn Ruffin in support of the opposition. There it is stated that the first use of “the trade mark” in Australia was in September 1976 and “the trade mark” has been used in relation to “exhausts, brakes, suspension, lubricants and services connected therewith”. Throughout this declaration reference is made to “the trade mark” and it is not clear to which of the opponent’s two registered trade marks the evidence relates. Sales under “the trade mark” appear to have grown steadily, at least over the years 1986-1995, for which sales figures have been provided, reaching a peak of over $64 million in 1992, while the amount spent on advertising was over $3 million for the same year. As there is no evidence of the use of the trade mark exhibited to the declaration it is impossible to say just what those figures refer to, but it seems a fair inference that “the trade mark” is the composite trade mark the subject of registration 300312 in which case the appropriate comparison is between that trade mark and the applicant’s trade mark. If that is indeed the case I am confident that there would be no reasonable likelihood of deception or confusion of a substantial number of persons.
If I am wrong in that conclusion the onus would still be on the opponent to show that there was some “blameworthy conduct” on the part of the applicant which would disentitle the applicant’s trade mark from protection in a court of justice in terms of s28(d). The question of “blameworthy conduct” in opposition proceedings has been considered recently in Canon Kabushiki Kaisha v Robert James Brook and Rachel Brook trading as The Cannon Watch Company (1996) 36 IPR 188 per Tamberlin J. His Honour, after considering the judgments in New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Limited (1990) 171 CLR 363, concluded that in his view the reasons for judgment delivered by members of the High Court left the matter open as to whether there was a need to find blameworthy conduct in opposition proceedings based on s28(a) as opposed to expungement proceedings. He went on to find that:
Notwithstanding the diverse opinions expressed by members of the High Court in New South Wales Dairy Corporation case, I consider that I should follow the views expressed by the Full Federal Court in that case, with the result that in the case presently before me the opponent to the application for registration is required to demonstrate “blameworthy conduct”.
The Full Federal Court in the New South Wales Dairy Corporation case , concluded that, as a matter of interpretation, s28(a) was qualified by s28(d) and that “blameworthy conduct” was one, but not the only, circumstance which could render a mark “not entitled to protection in a court of justice”. (see 86 ALR 549 per Gummow J), (24 FCR 370 Lockhart, Pincus and Von Doussa JJ).
In the instant case, Canon has not established any “blameworthy” conduct or any other matter on the part of the respondents in relation to the present application, which would disentitle the mark to protection in the courts and as a result the challenge under this provision must fail....
In the present matter, the delegate of the Registrar, when considering the s28(a) ground, relied on what was described as the “fully settled” practice of the Registrar developed from the Murray Goulburn case and dismissed the opposition on this ground because in her view there was “no hint of blameworthy action”. See also Titan Manufacturing Company Pty Ltd v John Terence Coyne (1991) 22 IPR 613; Unidrive Pty Ltd v Dana Corporation (1995) 32 IPR 155. Cf Johnson & Johnson v Kalnin (1993) 26 IPR per Gummow J where the point was apparently not raised.
Mrs Freeman submitted that the applicant had been guilty of bad faith in adopting the trade mark. It was said that Mr Rippon had been a franchisee of Midas and therefore would have been extremely familiar with the trade marks used by Midas. However, there is simply no evidence on thecircumstances surrounding the adoption and first use by the applicant’s mark, no evidence as to the belief or intent of those who adopted the mark, no explanation by any officer of the applicant company on which he or she could be cross-examined. In the absence of any such evidence or otherwise any evidence as to the conduct of the applicant I am unable to find that para 28(d) has been satisfied. The opponent has therefore failed to make out a case under s28.
Conclusion
I have found that the opponent has failed to satisfy me that an objection to the registration of applicant’s trade mark exists in terms of either s28 or s33 of the Act.
In those circumstances it is unnecessary for me to consider Mrs Freeman’s submissions in relation to honest concurrent use of the applicant’s mark in terms of s34 of the Act.
The opposition is therefore dismissed and I direct, subject to the opponent’s right of appeal, that the trade mark subject of application 561746 be registered.
I award costs in the matter to the applicant.
Michael Homann
Hearing Officer
5 May 1997
Key Legal Topics
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Commercial Law
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Contract Law
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Intellectual Property
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Breach
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Damages
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Injunction
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Remedies
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Offer and Acceptance
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