C I Kasei Co Ltd v PGM Group Pty Ltd

[2002] ATMO 99

TRADE MARKS ACT 1995

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

Re:Opposition by C I Kasei Co Ltd to registration of trade mark application 806163(19) - HYDRA-TITE - filed in the name of PGM Group Pty Ltd.

Date of Decision:

31 October 2002

Delegate:

Hearing Officer Geoff Purvis-Smith

Representation:

Opponent - Mr Michael Kirov of Spruson & Ferguson

Applicant - no appearance

Decision:

ss. 44 and 58 grounds successful

ss.42 and 60 grounds dismissed

Registration of trade mark refused pursuant to s.55

Applicant to pay opponent's costs

Background

On 7 September 1999, PGM Group Pty Ltd (PGM) applied for registration of the following trade mark:

The application covered the following goods in class 19: themorplastic (sic) waterproof membrane used in construction/engineering works.

The application was accepted for registration and advertised in the Australian Official Journal of Trade Marks on 3 August 2000.

On 30 November 2000, the opponent, C I Kasei Co Ltd (Kasei), lodged a notice of opposition to registration which set out seven grounds of opposition.

The matter eventually came before me as a delegate of the Registrar of Trade Marks for hearing on 1 August 2002.  The matter was heard in Canberra.  Mr Michael Kirov of Spruson & Ferguson appeared on behalf of the opponent.  There was no appearance by the applicant.

Evidence

The following evidence was lodged by the parties during the course of proceedings:

Name	Date	Exhibits
Evidence in Support
James Henry GATELY	26.08.01	JHG1-JHG5
Evidence in Answer
Nick JOANNIDES	21.11.01	NJ1
Doug KNOX	23.11.01
Mike PYNT	18.12.01	MP1-MP6

By way of summary, Mr Gately states in his declaration that he is the Australian distributor for the opponent's HYDROTITE branded sealing materials.  He also provides a history of the use of the brand name HYDROTITE in Australia, confidential sales figures for the years 1989 through 2000, and annexes a copy of the details of the opponent's Australian registration (number 385180) for the trade mark HYDROTITE for "sealing materials and seals, all made of rubber and all included in class 17".  Trade mark 385180 has a priority date of 15 December 1982.  Mr Gately also sets out the manner in which his company markets and promotes the opponent's goods in the Australian market.  Finally, he sets out how the opponent's HYDROTITE goods are used as a waterproofing system for buildings and other constructions such as pits, pools, tanks, tunnels, basements, pavements and underground or water retaining structures.

Mr Joannides is a Director in a Consulting Structural and Forensic Engineers firm.  He is aware of the products sold by both the applicant and the opponent, under their respective HYDA-TITE and HYDROTITE names.  He states that the goods in question are not interchangeable, and that he is not aware of any confusion in the marketplace regarding the two products.  Finally, he states that, due to the specialised nature of the products, he does not believe that likely users, including engineers as specifiers and users of the products, would be confused by the co-existence of the products and their trade marks.

Mr Knox is also a Director in a Consulting Civil and Structural Engineer firm.  He states that he is aware of the products of the applicant and opponent, and has specified the applicant's product and trade mark in building specifications.  He does not believe that the products are interchangeable.  He has not been confused between the two products over the two years that he has known about both products.  He states that he cannot envisage any instances of confusion in the trade between the two products.

Mr Pynt is a Director of the applicant.  He states that his company has used the trade mark HYDRA-TITE in Australia since at least December 1999 in relation to the applied for goods.  He states that the goods are marketed to engineers, architects and trained strata/building managers via various methods, including print, signage and trade fairs and demonstrations.  Mr Pynt states that the goods are highly specialised in nature, and because of this they are not offered for sale to the public.  Sales are only made to parties who have completed a structured training course provided by his company.  Finally, he states that the trade mark is recognised as distinctive of the applicant's goods, and given the specialised nature of the trade channels, no confusion with the opponent's mark would occur.

Grounds of Opposition

As I have indicated, the opponent relied on seven grounds of opposition in its original notice. At the hearing, Mr Kirov indicated that the opponent would not pursue the first ground. The remaining grounds can be summarised as relying on sections 42(b), 44, 55, 58, and 60 of the Trade Marks Act 1995.  I will deal with each of the grounds in turn.

Section 42

Section 42 provides:

42  Trade mark scandalous or its use contrary to law

An application for the registration of a trade mark must be rejected if:

(a)       the trade mark contains or consists of scandalous matter; or

(b)       its use would be contrary to law.

The opponent relies on s.42(b) - use contrary to law.

According to the decision of Madgwick J in Advantage Rent-A-Car[1], the Registrar is obliged to determine whether use of the trade mark would, rather than could, amount to a contravention of the law.  The law which can be taken into account is not limited to the Trade Marks Act 1995, but could conceivably include such laws as passing off, the Commonwealth Trade Practices Act 1974 and Copyright Act 1968, and the various State based Fair Trading Acts.

[1] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] 52 IPR 24

Here, the opponent alleges that use of the applied for trade mark for waterproof membranes for use in construction/engineering works would prima facie breach s.52 of the Trade Practices Act 1974[2], and therefore, the provisions of s.42(b) are made out.

[2] Section 52 states that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

In making its submissions, the opponent stated that Madwick J's use of the expression "hypothesis" in Advantage Rent-A-Car has the effect that s.42(b) only requires that the opponent make out a prima facie case. For the reasons which I set out below, I do not agree with this submission. I believe that the relevant standard to be applied is that of reasonable satisfaction, determined on the balance of probabilities. To satisfy myself to this standard, I must take into account all the circumstances of the broader hypothetical case.

Traditionally, an assessment of whether a prima facie case is made out is limited to an assessment of the plaintiff's case at its highest, ignoring for the moment aspects of the plaintiff's or defendant's case which do not assist the plaintiff.[3]  Such a case is always open to rebuttal by evidence or a no case to answer submission at the conclusion of the plaintiff's case.   Here, there is evidence in rebuttal in the form of evidence in answer.

[3] See for instance, Waight and Williams "Evidence: Commentary and Materials", LBC Casebooks, 3^rd Edition at 160ff

In Advantage Car Rental, Madgwick J found at paragraph 22:

Accordingly, based on the evidence before the court, in my opinion, use by the respondent of its trade mark would be contrary to the Copyright Act and accordingly contrary to law. Therefore, the ground for opposing the registration of a trade mark provided for by s 42 (b) is made out by the applicant. It should, however, be noted that this is but the expression of opinion upon a hypothesis and does not amount to a finding of any actual breach of the Copyright Act by the respondent.

In other words, his Honour came to his finding on the basis of a "hypothetical" case under the Copyright Act 1968 (Cth). In contrast to the prima facie standard, the "hypothetical" case takes into account the full extent of the evidence. It asks whether, having regard to the current state of evidence and with full appreciation of the strengths and weaknesses of the respective parties' cases, would the allegation of contravention of the relevant law be made out? The determination remains hypothetical because the relevant decision maker is not being asked to make a determination that there has been a breach of the relevant law.  He or she is making no award or order under that other law.  Rather, the decision maker is determining whether future use of the trade mark would breach that law.  By definition, such an assessment can only ever be hypothetical. 

Accordingly, I believe that more than a prima facie case is required.  The opponent must satisfy me on the balance of probabilities that use would, rather than could, be contrary to law.  In undertaking the assessment, I must look at the totality of the evidence before me, and apply the relevant case law to the facts. 

Section 52 provides that a corporation shall not engage in conduct that is misleading or deceptive or likely to mislead or deceive. There is no evidence before me that anyone has been misled or deceived to date. Therefore, my consideration is largely limited to a determination of whether use is likely to mislead or deceive. As stated in Miller's Annotated Trade Practices Act 2001/2002 Edition at page 374, "[c]onduct is likely to mislead or deceive if [there] is a real or not remote chance or possibility regardless of whether it is less or more than 50 per cent: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 87; 55 ALJR 25, ATPR 40-463."

In the present case, and taking into account the evidence of Messrs Joannides and Knox, I cannot be satisfied that use would, rather than could, amount to a breach of s.52. Mr Joannides states categorically that he has not been confused to date, that he is not aware of any instances of confusion, and, given the specialised nature of the products, he does not believe that likely users would be confused by the co-existence of the two trade marks. Mr Knox states that he has never been confused between the two products, and that he is not aware of and cannot envisage any instances of confusion in the trade between the two products. While I accept that each declarant talks of confusion, as opposed to the likelihood that consumers will be mislead or deceived, I believe that the tenor of their evidence is clear. It was open to the opponent to rebut the evidence of Messrs Knox or Joannides, or show instances of confusion to date. However, it has not done so.

Therefore, this ground of opposition fails.

Section 44

Section 44 provides that a trade mark application must be rejected if the applied for trade mark is substantially identical with or deceptively similar to a trade mark which has an earlier priority date, and which is in respect of similar goods.

Here, the opponent relies on its registered trade mark number 385180 - HYDROTITE.  The opponent's registration covers the following goods in class 17: sealing materials and seals, all made of rubber and all included in class 17.  The priority date of 385180 is 15 December 1982, which is clearly earlier than that of the applied for trade mark.

I am satisfied that the goods in question are similar goods.  The applicant's goods can be described as a waterproof thermoplastic membrane which is applied over the top of surfaces and joints.  The opponent's goods can be described as waterstops which expand in the presence of water thereby creating a pressure seal within construction joints.  I believe that each product is one that is used and sold in the construction industry to prevent water penetration.  This is where the overlap occurs, and is sufficient to mean that the goods are similar goods.  It does not matter that the goods fall into different classes - see for instance, Jellinek's Appn (1946) 63 RPC 59.

The next question is whether the applied for trade mark is substantially identical with, or deceptively similar to, the opponent's registered trade mark.

The well accepted test for "substantially identical"  was set down by Windeyer J in The Shell  Company of Australia Limited v Esso Standard Oil (Australia) Limited 109 CLR 407 at 414 where he stated:

(the marks should) 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.

Here, the two trade marks are: 

HYDROTITE

There is very little to differentiate the two marks.  For the purpose of this assessment, the inclusion of "TM" is set to one side. Similarly, the fact that the applicant has depicted its trade mark in a particular manner makes no real difference in the present case - it is simply a rendering of the word mark in a plain font, albeit italicised.

The only differences between the two trade marks are the substitution of the opponent's "O" in HYDROTITE with an "A" in the applicant's HYDRA-TITE, and the inclusion of a hyphen.  The unusual spelling of "tight" is common to both. 

The opponent referred to the decision of Hearing Officer Homann in Warner-Lambert Co v Harel (1995) 32 IPR 189, 192 where Mr Homann stated in relation to the trade marks

and

DERMAFILM:

It is not therefore necessary that the marks should be identical before the question of proprietorship can arise. It is sufficient if the marks are substantially identical. Here Mr Skelly relied on Kendall Co v Mulsyn Paint & Chemicals (1963) 109 CLR 300, where the marks in dispute were the words "polykin" and "polyken", ie a difference of one letter in the spelling with little if any difference in pronunciation. He argued, and I agree, that that case is directly in point in the present case. The two words "dermofilm" and "dermafilm" are, like "polykin" and "polyken", words of three syllables with a difference of one vowel in an unstressed position which has little, if any, effect on the pronunciation of the words. It is true that the applicant's mark contains a small device element which is quite nondescript and attracts minimal attention. The mark would undoubtedly be known as DERMOFILM. On the whole therefore I find that the marks are substantially identical and that the opponent is entitled on the basis of its uncontradicted evidence of prior use to be considered the proprietor of the trade mark which the applicant seeks to register.

The opponent submits that the present case is on all fours with Mr Homann's decision, and, as a result, is clear authority for the present case.  I agree.  I see no reason why Mr Homann's assessment should not be applied to the present case.  I am satisfied that HYDRA-TITE and HYDROTITE are substantially identical.

I find that this ground of opposition is made out.

Given that I have found substantial identity, there is no need for me to consider deceptive similarity.

Section 58

Section 58 provides that registration may be opposed on the basis that the applicant is not the owner of the applied for trade mark. In determining who is the owner of the trade mark, it is relevant to determine whether any other party, including the opponent had first use in Australia of a substantially identical trade mark in relation to similar goods - see for instance Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 31 IPR 375 per Gummow J at 391.

Here, I have already found that the trade marks are substantially identical and that the goods covered by the application and the opponent's registered trade mark are similar goods.  The uncontested evidence of Mr Gately is that his company has been distributing the opponent's HYDROTITE branded sealing materials and seals in Australia since at least 1990.  There is also some evidence that another distributor used the trade mark in relation to the opponent's products prior to 1990.

I am satisfied on the basis of this evidence that the opponent has been using the trade mark in relation to the goods covered by the registration since at least 1990.  Therefore, and on the basis that the assertion was not contested by the applicant, the opponent is the first user of the trade mark in Australia, and the applicant is not the true owner. 

This ground of opposition is made out.

Section 60

I have already found that the opponent has made out its s.44 and 58 grounds. Therefore, it is not necessary for me to determine the s.60 ground. Given this, and that much of the material on which the opponent relies to assert its reputation is confidential, I do not propose to discuss this ground in great detail.

The evidence of the opponent is that it has achieved a degree of reputation via the promotion of its products and use in the trade.  The sales of the opponent's goods are significant, and the goods in question appear to be relatively cheap (ie the cost per metre for the opponent's goods run from a few dollars to less than $100).  This is useful in establishing reputation, but it is still a question of fact.  It is still incumbent upon the opponent to establish that it does in fact have the reputation - see for instance ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 per Lockhart J at 233-4.

I am not satisfied on the evidence that the reputation has in fact been achieved to the extent that there is a real, tangible risk that consumers would be deceived or confused as to the source of the applicant's goods based on reputation alone.

Therefore, the requirements of s.60(b) are not made out and the ground fails.

Section 55

I have found that the opponent has made out its ss.44 and 58 grounds. Therefore, I refuse to register the trade mark.

Costs

The opponent has sought its costs. Costs normally follow the event. I see no reason why the normal course should not be followed here. I direct that the applicant pay the opponent's costs in accordance with Schedule 8 of the Trade Marks Regulations 1995.

Geoffrey Purvis-Smith

Hearing Officer

Trade Marks Hearings

31 October 2002