Brock Beauty Inc. - [2016] ATMO 57

TRADE MARKS ACT 1995

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

Re:International Registration Designating Australia no. 1662393 (3 and 5) – DERMERA - in the name of Brock Beauty Inc.

Delegate:	Heath Wilson
Representation:	Holder: Angus Lang of Counsel instructed by Schweizer Kobras Lawyers.
Decision:	2016 ATMO 57 Reg 17A.24: Final decision on examination – subsection 44(1) of the Trade Marks Act 1995 – trade marks deceptively similar – application of 44(3) considered – IRDA rejected.

Background

This is an application to be heard on the examination of an International Registration Designating Australia (‘IRDA’) , the current details of which are extracted below:
IRDA No. 1662393
International Registration No: 1195620
Trade Mark: DERMERA (‘the Trade Mark’)
Priority Date: 3 November 2014
Holder: Brock Beauty, Inc.
Specification of Goods:
Class 3: Body and Beauty Care Cosmetics
Class 5: Dietary and Nutritional Supplements; Food Supplements
On 27 March 2015, IP Australia issued a first examination report and a Notification of Provisional Refusal of the IRDA. The basis of the provisional refusal was a ground for rejection under subsection 44(1) of the Trade Marks Act 1995 (‘the Act’).
The adverse examination report provided (amongst other things):
Your trade mark is substantially identical with, or deceptively similar to, the following trade mark(s), and is for similar or closely related goods and/or services:
1472107
The refusal applies to the following goods/services:
All of the goods claimed
I have enclosed details of the trade mark(s) mentioned above.
As can be seen above, the provisional refusal applied to all the goods for which extension of protection is sought. The Holder did not respond to the examiner but, on 6 May 2016, requested a hearing from the Registrar under reg 17A.17 of the Trade Marks Regulations 1995 (‘the Regulations’).
The decision was allocated to me to be made in my capacity as a delegate of the Registrar of Trade Marks and the matter was set down to be heard in Canberra on 7 June 2016.
On 24 May 2016 I set out a timetable for the Holder’s written submissions and any evidence it sought to rely upon. In accordance with the timetable, IP Australia received the following material from the Holder before the hearing:

Statutory Declaration of Tymeka Lawrence (President of the Holder) made 31 May 2016 with exhibits TL-1 to TL-14.
Statutory Declaration of Fiona Henderson (Solicitor for the Holder) made 26 May 2016 with exhibits FH-1 to FH-14.
Statutory Declaration of Fiona Henderson made 1 June 2016 with exhibits FH-1 and FH-2.
Written summary of argument dated 3 June 2016.

As delegate, I conducted the hearing on the scheduled date and Angus Lang of Counsel (instructed and accompanied by Fiona Henderson of Schweizer Kobras Lawyers) made oral submissions via teleconference.

Discussion

Section 44 of the Act relevantly provides:

44Identical etc. trade marks
(1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:
(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar goods or closely related services; or
(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

(2) …
(3)If the Registrar in either case is satisfied:
(a)that there has been honest concurrent use of the 2 trade marks; or
(b)that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.
(4)If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant’s trade mark for a period:
(a)beginning before the priority date for the registration of the other trade mark in respect of:
(i)the similar goods or closely related services; or
(ii)the similar services or closely related goods; and
(b)ending on the priority date for the registration of the applicant’s trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

The details of the prior trade mark identified in examination are as follows:

Trade Mark No. 1472107
Priority Date: 12 August 2011 (Convention no. 85/397069 USA)[1]
Trade Mark: DERMIRA (‘the cited trade mark’)
Owner: Dermira, Inc.
[1] See section 12 and 29 of the Act.
Specification of Goods and Services:
Class 5: Pharmaceutical preparations and treatments; pharmaceutical preparations and treatments for skin care

Class 42: Pharmaceutical research and development; consulting services in the fields of pharmaceutical research and development; development of pharmaceutical preparations, treatments and medicines; conducting research and clinical trials relating to pharmaceuticals in the field of skin care

The cited trade mark has an earlier priority date than the Trade Mark and so the next consideration will be[2]: are the goods in the specification of the IRDA similar to the goods and/or closely related to the services in the specification of the cited trade mark?
[2] See Registrar of Trade Marks v Woolworths [1999] FCA 1020, [39] (French J).
To answer the first element of that question, the meaning of ‘similar goods’ under section 14 of the Act is set out below:

14 Definition of similar goods and similar services
(1)       For the purposes of this Act, goods are similar to other goods:
  (a)       if they are the same as the other goods; or
  (b)       if they are of the same description as that of the other goods.

In the case of Beck, Koller & Company's Application[3] the Assistant Comptroller elaborated on the factors relevant to the consideration of whether goods are similar, taking into account:
- the nature and characteristics of the goods;
- the origin of the goods;
- the purpose of the goods;
- whether the goods are usually produced by one and the same manufacturer;
- whether the goods are distributed by the same wholesale houses;
- whether the goods are sold in the same shops, over the same counter, during the same season and to the same class or classes of customer;
- whether those engaged in the manufacture and distribution of the goods are regarded as belonging to the same trade.
The specifications under comparison here are pharmaceutical preparations and treatments in class 5 (which incorporates preparations and treatments for skin care) on the one hand, and dietary and nutritional supplements; food supplements (class 5) and body and beauty care cosmetics (class 3) on the other.
The expression ‘Pharmaceutical preparations’ as it appears in the specification of the cited trade mark is a broad expression and has often been interpreted accordingly in previous authority from the office. For example, in the decision of Sanofi-Synthelabo v Lohmann Animal Health GmbH[4] the hearing officer extracted the following dictionary definition of the word ‘pharmaceutical’:
Pharmaceutical. A broad term that includes not only all types of drugs and medicinal and curative products but also ancillary products such as tonics, dietary supplements, vitamins, deodorants, and the like.
[4] [2003] ATMO 68, [21].
An ordinary reading of the expression ‘Pharmaceutical preparations and treatments’ therefore notionally includes goods that are the same as, or of the same description as ‘dietary and nutritional supplements’. Pharmaceutical preparations and treatments are not (for example) limited to those products available only via prescription in a pharmacy. I have also previously found in a decision with analogous specifications of goods:
If it were necessary to analyse the respective specifications further, I would find that pharmaceutical preparations is such a broad expression there are inevitable similarities with the Applicant’s nutritional additives, supplements and preparations.[5]
[5] Bayer AG v O’Hagan Medical Pty Ltd [2015] ATMO 46, [19].
Also, in relation to the Holder’s class 3 body care products, I have observed in the decision of Takeda GmbH v Actegy Ltd that:
Addressing the class 3 goods first, I am satisfied that cosmetic creams and lotions which are not pharmaceutical preparations are nonetheless similar to pharmaceutical preparations in the form of creams and lotions. The similarities in the nature of those goods, the trade channels through which they are sold (pharmacies, clinics etc.) and their respective uses (e.g. improving the appearance of the skin) leads me to the conclusion that they are similar. In addition, major cosmetics companies go to great lengths to create the impression that their products have pharmaceutical benefits or properties. [6]
[6] [2014] ATMO 38, [13].
In the current matter, the specification of the cited trade mark specifically mentions pharmaceutical preparations for skin care, which highlights (for example) the fine line between a skin cream produced for a cosmetic purpose (class 3) and a skin cream with a primarily curative purpose (falling within class 5). Both types of cream are likely to appear alongside each other in a pharmacy or supermarket and have similar uses. While the therapeutic benefits may differ slightly, this is overshadowed by the fact that the actual natures of the goods align and appeal to the same type of customer.
As a consequence, I find that the goods in class 5 of the cited trade mark are similar to those in classes 3 and 5 of the IRDA. Given that finding, I need not address whether the services of the cited trade mark are closely related to any of the goods in the specification of the IRDA. The consideration is now whether the Trade Mark is substantially identical with, or deceptively similar to the cited trade mark.

Substantially Identical/Deceptively Similar

The comments of Windeyer J in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd[7] set out the relevant test for comparing whether two trade marks are substantially the same:
[the trade marks] 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 dissimilarity that emerges from the comparison.
[7] (1961) 109 CLR 407, [414]-[415].

For assessing deceptive similarity, in Australian Woollen Mills Ltd v F. S. Walton and Company Ltd[8] Dixon and McTiernan JJ stated:
[T]he marks ought not … 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 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.
[8] (1937) 58 CLR 641, [658].
While the slight difference between the trade marks is sufficient on its face to find that they are not substantially identical on a side-by side comparison, I have no hesitation in finding that the trade marks in question are deceptively similar.[9]
[9] See the definition of ‘deceptively similar’ in section 10 of the Act.
The sole visual difference between the trade marks is the letter ‘E’ in place of the letter ‘I’ within the Trade Mark. From a visual perspective, there is a real, tangible danger of deception or confusion despite this very minor difference in a single vowel in the two trade marks.

There is also a real likelihood that the pronunciation of the trade marks will be the same or so similar that the difference would be unnoticeable to the untrained ear. Both trade marks appear to be unique in construction making an initial reference to the word element ‘derma’ (defined in the Macquarie Dictionary Online as ‘the corium or true skin, beneath the epidermis; the skin in general’[10]). I also note the Holder’s explanation for the origins of the Trade Mark (‘I wanted the brand to represent a “new era in skin care”. I was aware that “derma”, a Greek word, referred to skin, and so I added it to “era” and created the word “Dermera” for the Products’[11]) but I am not satisfied that it makes any appreciable difference to this finding of a likelihood of deception or confusion.
[10] Macquarie Dictionary Online (Macmillan Publishers Group Australia 2015).
[11] Declaration of Tymeka Lawrence [8].
I find that the trade marks are deceptively similar. Section 44(1) of the Act is therefore applicable, subject to subsections 44(3) and 44(4) which were also argued by the Holder.

Section 44(3)(a): Honest Concurrent Use

The Relevant Date

In Hills Industries Limited v Bitek Pty Ltd, Lander J considered comments made in relation to section 34(1) of the (now repealed) Trade Marks Act 1955 in the case of PB Foods v Malanda[12] and ultimately found with regard to s44(3)(a):
In my opinion, evidence of concurrent use after the priority date is not relevant in regard to an application under s 44(3)(a). Section 44(3)(a) is only engaged if a finding has been made under s 44(1). It is agreed that the evidence relevant to an opposition under s 44(1) for the registration of a trade mark is evidence prior to the priority date. It would be most unusual if, having determined that the applicant’s trade mark was deceptively similar to the trade mark registered by another person in respect of similar goods at a particular time, the Registrar or the Court, as in this case, is entitled to exercise its discretion in favour of the applicant having regard to use of that mark at a different time.
It seems to me that s 44(3)(a), which allows the exercise of discretion if there has been an honest concurrent use of the two trade marks, is speaking of the same time as s 44(1), ie., before the priority date. Such a conclusion is consistent with Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd 91 CLR 592 and the assumption made by Kenny J in McCormick & Co v McCormick [2000] FCA 1335; 51 IPR 102 at 111 who when addressing s 44(3)(a) and citing decisions of the Registrar said that the rights of the parties are to be determined as at the date of the application for registration. (Emphasis added) [13]
[12] [1999] FCA 1602; (1999) 47 IPR 47.
[13] Hills Industries Limited v Bitek Pty Ltd [2011] FCA 94, [163-164].
The submissions from the Holder’s representative referred to an older decision of this office made under the provisions of the Trade Marks Act 1955 (Cth) as authority for the proposition that events after the application date may be considered in the exercise of the discretion. The decision, Trussardi SpA v Rundles Pty Ltd, considered section 34(1) of that Act (‘honest concurrent use or other special circumstances’) and found therein:
It is well settled that in matters concerning honest concurrent use the relevant date before which that use must have occurred is the date of application for registration made by the party seeking to avail itself of those provisions: “Granada” Trade Mark [1979] RPC 303 at 312; Gloy and Empire Adhesives Ltd’s Application (1934) 51 RPC 63 at 69. The relevant date here, then, is 22 March 1988. According to the Rundle declaration the applicant did not commence to use its mark until April 1988, some weeks after the date of application. It follows that the provisions relating to honest concurrent use cannot be applied to this application. [14]
[14] [1993] ATMO 7; (1993) 25 IPR 502.
The delegate subsequently went on to apply the then ‘special circumstances’ exception also under section 34(1), the equivalent of which is now section 44(3)(b) under the Act. Nevertheless, the relevant date in the current matter is 3 November 2014 and in accordance with the above cases, use after that date is not relevant for the application of honest concurrent use.

Factors for Honest Concurrent Use

In McCormick & Co Inc. v McCormick, non-exhaustive criteria for honest, concurrent use were set out as follows:
The authorities establish that the principal criteria for determining whether registration should be permitted pursuant to s 44(3) include:

(1) the honesty of the concurrent use;
(2) the extent of the use in terms of time, geographic area and volume of sales;
(3) the degree of confusion likely to ensue between the marks in question;
(4) whether any instances of confusion have been proved; and
(5) the relevant inconvenience that would ensue to the parties if registration were to be permitted. [15]
[15] McCormick & Co Inc. v McCormick [2000] FCA 1335, [30] (‘McCormick’).
In relation to the first criterion, it should not be taken from decisions that cite ‘honesty’ as the most important factor that the application of s 44(3)(a) is all but established by demonstrating commercial honesty. Rather, it is the demonstrated concurrent use that must at the very least be honest for section 44(3)(a) to be applied, ‘for if the concurrent use is not honest it is as nothing’.[16]
[16] Re:Granada Trade Mark [1979] RPC 303 [313] (Mr Myall).
After assessing the Holder’s evidence there is no reason to doubt the honesty of the Holder’s adoption and use of the Trade Mark. The President of the Holder, Ms Lawrence goes on to supply an indication of the extent and nature of that Trade Mark use in Australia at the relevant time.

Evidence of Use

In the evidence, the Trade Mark appears prominently in the centre of the label of a bottle for a gentle astringent, a complexion serum and a dietary supplement (being ‘Dermera Skin Vitamins’). In many cases, the Trade Mark is accompanied by the trade mark ‘BROCKBEAUTY’ or is presented as: ‘glow by Dermera’ or ‘DERMERA GLOW’. Despite the presence of these other word elements, I am generally satisfied that the examples show use of the Trade Mark.
Ms Lawrence declares that the Holder’s products have been promoted on its US based website ‘ since in or around June 2010 and that the first evidence of a purchase of the Holder’s products occurred on November 2011. However, it is also clear that the first documented sale in Australia occurred on 18 July 2012 and that a small amount of the Holder’s products were shipped to Australia between that date and the priority date of the IRDA.
The Holder therefore cannot establish prior use to the cited trade mark which has a convention priority date of 12 August 2011. I therefore note in passing that the provisions of section 44(4) of the Act (‘prior continuous use’) are not applicable to the IRDA.
The evidence also shows that the Holder has, at various times, operated different websites selling its products under the Trade Mark. For example, skin care products have been offered internationally via ‘ since June 2010. According to Ms Lawrence, these products on the website in 2010 were available to be shipped to Australia. I will return to this issue shortly.
The above website was later decommissioned and in April 2012 a new website ‘ was created. Then from 28 December 2012, Australian customers were directed to the UK website ‘ to place orders for the products.

Shortly before the priority date of the IRDA, from 9 September 2014, Australian customers were instead directed to the European based website ‘ to place orders. It was not until September 2015 that a dedicated Australian website was created catering specifically for Australian customers: ‘ – an event that is well after the priority date of the IRDA.
There is evidence of at least one instance of a sale of a ‘Dermera Complete Package’ to an Australian address in July 2012 and the Holder’s website ‘ at around that time included Australia as a delivery option and prices were shown in Australian dollars. As a consequence, and after considering the evidence regarding the Holder’s various websites and its invoices for sales of the products in Australia, I am satisfied that there has been Australian use of the Trade Mark since April 2012 when the website was created, that is, use directed to Australian consumers. However, I am not satisfied that use earlier than that time is any more than the type of use contemplated in the below comments from the case of Ward Group Pty Ltd v Brodie & Stone Plc:
[U]se of a trade mark on the Internet, uploaded on a website outside of Australia, without more, is not a use by the website proprietor of the mark in each jurisdiction where the mark is downloaded. However, as explained above, if there is evidence that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction then there is likely to be a use in that jurisdiction when the mark is downloaded.[17]
[17] [2005] FCA 471, [43] (Merkel J).
In other words, I have before me between 2-3 years of honest concurrent use of the Trade Mark in the Australian marketplace. In terms of the extent of the use between July 2012 and November 2014, the sales figures of product units sold in Australia have not been significant.[18]
[18] Exhibit TL-3 to the declaration of Tymeka Lawrence.
As mentioned earlier, the goods to which the Trade Mark was applied were initially skin cleansers, a gentle astringent toner, a complex serum moisturizer and a dietary supplement. The Holder decided in December 2014 to limit the ‘Dermera’ range to its dietary supplement.[19] Since the end of 2014, the Holder has taken a number of preliminary activities to further expand Australian sales and distribution for all its products, including Dermera. On or around 16 December 2014, for example, the Holder established its wholly owned Australian subsidiary, Brock Beauty Australia Pty Ltd. Once again, as these actions occurred well after the priority date of the IRDA, they are outside the scope of the current consideration.
[19] Declaration of Tymeka Lawrence [11].
For the evidence of advertising expenditure, Ms Lawrence provides figures relating to a global marketing spend but does not indicate how much of it was directed to Australian consumers. The primary reason for this is probably due to the Holder’s global digital advertising campaigns (including on the Holder’s websites, email distribution lists and on its ‘Facebook’, ‘LinkedIn’, ‘Twitter’, ‘Pinterest’ and ‘Instagram’ pages).
The email consisting of the Holder’s promotional material (exhibit TL-8b) is said to have been distributed to 5,000 people in the ‘English language group’. Once again, this evidence does not indicate what percentage, if any, was sent to Australians and if this promotion occurred before the priority date.
The Holder’s ‘Facebook’ page has been operating since May 2012 and the examples of use at exhibit TL-9 to the declaration indicate how it currently appears, and the fact that it currently has 137,000 “likes”. The use on ‘Twitter’ (the product ‘Dermera’ has had a hashtag since March 2011), ‘Instagram’ (operating since January 2014) and ‘Pinterest’ (since December 2013) requires an inference to be drawn as to how many followers of the Holder are Australian and as to the actual appearance of those pages before November 2014. This evidence points to a not insubstantial presence on these international sites. However I cannot, (without more) be satisfied of its significance in the Australian marketplace in terms of assessing concurrent use against the presence of the cited trade mark.
Turning to the first statutory declaration of Fiona Henderson, Ms Henderson annexed search results from the ‘Google’ search engine for the word ‘DERMIRA’ which indicate, on their face, that the owner of the cited trade mark is a specialty biopharmaceutical company dedicated to improving the lives of patients suffering from dermatological diseases. This information on its face may appear to reduce the likelihood of actual deception and confusion in the Australian marketplace, but the fact remains that the notional scope of the protection enjoyed by the cited trade mark is not so limited.
The second declaration of Fiona Henderson includes extracts from a search of the Australian Trade Marks Register for trade marks with the prefix ‘DERM-’. The searches of the US, Canadian and European trade marks registers indicate that the word trade marks ‘DERMERA’ and ‘DERMIRA’ co-exist in those jurisdictions without any apparent problems. However, I am not convinced that the circumstances of those trade mark registrations from foreign jurisdictions justify the acceptance of the Trade Mark under s 44(3)(a). Apart from the fact that the goods/services of the parties’ respective overseas registrations seem to differ from those in the current matter, I am not aware of the particular circumstances, nor the state of the trade marks legislation in those jurisdictions that may have led to the coexistence of the respective registrations. The Holder is seeking to extend protection of the IRDA to Australia and it is under Australian trade mark law that the Trade Mark must be assessed.
As the parties’ trade marks are particularly similar in this case, I believe there is a high likelihood of deception or confusion between them. Although this factor is not determinative, it weighs against an application of the discretion in the Holder’s favour.
The Holder is not aware of any instances of confusion with the cited trade mark, but given the relatively small amount of product advertised and sold by the Holder in Australia before the priority date, it is not surprising that such confusion is not yet evident in Australia.
In the end, and after giving due weight to all the evidence before me, I find that it is not appropriate to exercise the Registrar’s discretion to allow the IRDA to proceed to possible extension of protection under the provisions of subsection 44(3)(a) of the Act. The Holder did not argue, and I was not specifically provided with, any other circumstances relevant to the application of subsection 44(3)(b) for the IRDA. Regardless, the circumstances of which I am aware from the evidence do not convince me it is proper to accept the IRDA under that provision.
I find that there is a ground for rejection under subsection 44(1) of the Act.

Decision

Reg 17A.24 of the Regulations provides:

17A.24Final decision on examination
(1)The Registrar must, after the examination, accept the IRDA unless he or she is satisfied that:
(a)it is not in accordance with this Division; or
(b)there are grounds for rejecting it.

(2)The Registrar may accept the IRDA subject to conditions or limitations.
(3)The Registrar must reject an IRDA, in whole or in part, if the Registrar is satisfied that:
(a)it is not in accordance with this Division; or
(b)there are grounds for rejecting it, in whole or in part.

I am satisfied that there is a ground for rejecting the IRDA under section 44(1) of the Act. Accordingly, I reject the IRDA in respect of all the goods listed.

Heath Wilson
Hearing Officer
Oppositions and Hearings
29 July 2016