Cadbury Limited v Unilever PLC

[1998] ATMO 36

TRADE MARKS ACT 1995

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

Re:

Opposition by Unilever PLC to the registration of trade mark application number 664808 in the name of Cadbury Limited.

Background:

After examination, trade mark application 664808 was advertised by the Trade Marks Office as having been accepted for registration.  The applicant is Cadbury Limited, which I will refer to simply as “the applicant” from this point.

The applicant is seeking to register a series of trade marks.  These are as follows:

Both marks, which differ only in the width and number of the background stripes, are sought to be registered without any limit as to colour.  In the decision that follows, I will speak of the two trade marks as though they were one.  That will be convenient as the difference between them has no bearing on the outcome of my decision.  

The applicant has applied to register the trade mark for “ice cream; ices and ice confectionery in this class”.

Unilever PLC, (“the opponent”) now opposes the registration of the application.  It has relied, initially, on various grounds set out under division 2 of part 5 the 1995 act.  That division allows an opponent to rely on, but only on:

• any of the grounds open to the registrar to consider prior to deciding to accept the application, other than that the trade mark is incapable of being represented graphically. These are set out in division 2 of part 4 of the act.

• any of the additional grounds open for the purposes of opposition.  These are set out in ss 58 - 62.

The opposition process has followed the course set out in the regulations.  The opponent’s declarations in support of the opposition are by Brian Elkington and Robert Tozer.  The former is a solicitor, the assistant corporate counsel for the opponent’s Australian subsidiary.  He has made a declaration that sets out the essentials of the opponent’s case.  I will summarise these briefly, as follows: 

The opponent has registered the following trade marks, on which it relies: 175701, 184103, 294034 and 363610. Those four registrations show minor variations in the bordering of the oval shape and in the squaring off, or rounding, of the tops of the vertical stripes.  The two first-numbered registrations are the extremes of these variations.

175701  184103

294034  363610        

In Australia, the first-numbered of the trade marks has apparently always been used with and containing the opponent’s well-known house mark STREETS.  On the world stage the position is somewhat different, as I will explain below.

As to the mark in use, the evidence suggests that the version with the word STREETS is widely known.  Where the trade mark is used in colour, the word STREETS is in dark blue, the oval in a lighter blue and the stripes in red, all on a white background.

Mr Elkington’s declaration goes on to talk of the overseas situation.  There, in other operations carried out by the opponent, the same basic device is used with words other than STREETS, such as GOOD HUMOR, OLá or LANGNESE, as appropriate to the US, Portuguese, German or other market.  Where colour is used overseas, the colours are apparently those which are familiar to Australian consumers.

Australian sales of ice-cream under the opponent’s trade mark are very extensive: some 60 million dollars from 1991 to 1996.  Mr Elkington declares that total Australian advertising expenditure for relevant trade marks has exceeded 8 million dollars per year in the same period.

The second part of the opponent’s evidence, the declaration of Mr Tozer, goes to what the opponent claims is an instance of actual confusion in the marketplace.  Mr Tozer has declared to a mistake that he made while buying an icecream from a freezer in a supermarket.  Looking for a particular STREETS product, he mistook what he describes as “the Cadbury logo” for the STREETS logo.  He has not described the mark he encountered in any detail, other than to say it had a striped design and was purple in colour but I will assume that he encountered the applicant’s trade mark exactly as now sought to be registered. 

He describes the logo as being on the side of the freezer cabinet.  He does not say if he approached the cabinet and saw the sign directly, or if he saw it from an angle. Mr Tozer was apparently expecting the freezer to contain STREETS products, partly on the basis of its position in the store.  He says “the freezer had been moved a couple of metres”.  I take this to mean that he was familiar with the store, acting on foreknowledge that the STREETS products would be where, in fact, the changeling freezer was.  However, his final statement is quite clear:  “The striped design of the Cadbury logo definitely led me to believe that the freezer contained Streets products”

The applicant, having been served with a copy of the opponent’s evidence, advised that it did not intend to serve evidence in answer to the opposition and requested that the matter be heard.  The opposition came on for hearing and decision by me, as a delegate of the Registrar of Trade Marks.

At the hearing, the applicant was represented by Mr Wayne Willis, a patent attorney of the firm F.B. Rice and Co.  Mr R.J Webb of counsel, instructed by Mr Elkington, to whom I have already referred, represented the opponent,.

The following were the only grounds relied on at the hearing:

• section 43, deception or confusion

• section 44(1)a, conflicting prior registrations

• section 60, conflicting prior reputation.

I will deal with them in that order.

Section 43- deception or confusion?

This provision, and its heading, read as follows:

Trade mark likely to deceive or cause confusion:

An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.

Mr Webb submitted that there was nothing in that provision which would rule out a mark having a connotation which would be likely to deceive or cause confusion because of a conflict with the reputation enjoyed by another trader. Such, indeed was the finding of Beaumont J in Melhero and another v Club X, 37 IPR 151.

Mr Webb argued that a broad reading of s 43 was intended as part of the scheme of grounds for rejection provided in part 4 of the Trade Marks Act 1995. As he formulated the issue:

Section 41 imposes on the registrar the obligation to consider in a positive way whether the mark is capable of being distinctive. Section 43 imposes a negative obligation on the Registrar to reject an application if some feature of the mark makes it deceptive.  Section 44 imposes a companion negative obligation on the Registrar to reject an application if the mark is likely to deceive when expressly considered against other marks in the register.

Mr Webb acknowledged that, approached in this way, s 43 involved duplication of some of the work of s 44 and also of s 60, to which I will refer later.  However, the overlap of function with s 44 was deliberate, he believed, in order to ensure that, in effect, nothing that should be rejected managed to slip through a crack between the provisions.  Equally, he noted that s 60 was simply a ground of opposition, not a provision with which the registrar could be concerned prior to acceptance.

Mr Willis, for his part, disputed the applicability of s 43 to questions of conflicting reputation.  He noted the definition of connotation, in the Concise Oxford Dictionary:  “that which is implied by a word etc in addition to its literal or primary meaning”.  This must confine the debate, he argued, to things which the registrar could know during examination.  Also, he argued that a connotation could not be acquired by one trade mark simply because another trader had built up a conflicting reputation.

Mr Willis went on to make some other and more elaborate arguments which draw support from the rectification provisions, and to look at what might happen if he was wrong in his primary submission.  I will not deal with these arguments.  It is not necessary to do so as, in my view, Mr Willis is correct in his primary argument.

For my part, I note the Concise Oxford definition relied on by Mr Willis.  Similarly, the Macquarie Dictionary shows that connotation is:

-n.1. the act or fact of connoting.

-n.  2. that which is connoted; secondary implied or associated meanings (as distinguished from denotation): the word "bum' has connotations of vulgarity.

From these, it might appear that a connotation is only the overtone, not the literal denotation.  However, the Oxford English Dictionary (second edition) removes any doubt:

1. The signifying in addition; inclusion of something in the meaning of a word besides what it primarily denotes; implication.

b. That which is implied in a word in addition to its essential or primary meaning.

Was there any doubt in the matter, it would be necessary to turn to the Explanatory Memorandum that was before Parliament at the time the act was adopted.  This shows that the then-clause was intended to bring about the rejection of applications for the registration of trade marks which:

because of some signification inherent to it, would be likely to deceive or cause confusion regarding a characteristic of the goods or services.

Taking these together, the matter can be put simply, as follows:  if a thing in a trade mark has a meaning - either inherent or implicit - that meaning must not be likely to deceive or cause confusion or there will be grounds for rejecting the trade mark at the examination stage.

Mr Willis argued that a trade mark does not acquire a meaning simply because someone else is known to be the source of the goods or services in question.  There is sometimes a fine line to be drawn in such cases and I am not sure that it will necessarily help to approach the matter by asking how the meaning arose.  Once it is clear that a word or element in a trade mark has a meaning, and that normal and fair use of the applicant’s trade mark will give rise to deception or confusion because of this, s 43 is triggered.

Words do sometimes acquire a meaning as the result of a reputation.  The word Stradivarius has taken on a meaning, as reputable dictionaries will confirm, in relation to violins.  It would be plainly wrong for an application to register that word, in relation to violins, to pass without at least questioning the relationship between the goods sold under the mark and the famous Herr Stradivari or his family.  Thus, examiners of trade marks will be justified in saying that grounds for rejection exist where famous names - be they of individuals or of organisations - or other famous identifiers would be likely to deceive.  That is the practice set out in item 20 of part 20 and item 4 of part 29 of the Draft Manual.

However, not everything that is famous will establish a trigger for s 43.  In the time since I took submissions from the parties on this question, two relevant decisions have issued from the Trade Marks Office: Intel Corp v Magnatex International Pty Ltd on the one hand and Down To Earth (Victoria) Co-operative Society Limited v George Schmidt on the other.  I think it is only once the distinction between a reputation and a meaning is appreciated that those decisions can be reconciled.

In the first of the two decisions to which I have just referred, the hearing officer found the word PENTIUM to be “a well-known trade mark in relation to microprocessor chips”.  He none the less declined to find that this reputation could be such as to trigger s 43 in relation to the use by another party of PENTIUM in relation to other goods.  This was because:

“this section of the Act must be taken to refer to some meaning inherent in the trade mark itself.  I can find no such meaning in the word ‘pentium’ ... which in relation to the specified goods could have such an effect”.

Mr Homann subsequently stated (my emphasis) that:  ‘The word “pentium” itself seems to be devoid of meaning except for the suggestion of “five”, being the fifth in succession in a series of Intel’s products.’  By this, he said that the only meaning was a suggested one.  Mr Homann did not say that the word “pentium” actually meant a particular sort of microprocessor chip produced by Intel Corporation, despite the fact that the trade mark was “well-known” in relation to such goods”.

In the second case, the hearing officer found that, despite a one-time proprietorial significance, the word CONFEST had passed, at least in part, into the public domain.  Hearing Officer Forno elaborated on this in a supplementary statement of reasons, issued 9 April 1998.  This statement highlights his critical finding, that there was, to a limited extent only, “a perception among some people in the intended market that the word CONFEST has a meaning”.

I do not think that a meaning is acquired, in the public domain, simply because a trade mark is famous.  The opposite is true.  The more an element is publicly known to be a trade mark, the clearer it is that it has not acquired a meaning.  COCA COLA does not “mean” a dark fizzy cordial, nor does ROLLS ROYCE “mean” a large, luxurious English saloon car. 

Accordingly, precisely because the present opponent’s trade mark has acquired a reputation as a trade mark, I decline to accept that this reputation can be considered as a connotation for the purposes of s 43.

Section 44 - conflicting prior registrations?

This provision deals with conflict between a pending application and a trade mark which, in the present case, is already registered.  It considers the possibilities that would arise from any notional and fair use of the mark sought to be registered, in relation to the possibilities that, under the terms of the registration, are already open to the owner of the earlier mark.  The representatives of both parties were in agreement that the broad principles here were unchanged from those under s 33 of the 1955 legislation.

Before delving more deeply into this, let me note one argument raised by Mr Webb that does not transport easily into this matter from the 1955 act.  That is the question of the onus, as between an applicant and an opponent. 

Mr Webb asserted that the onus was firmly on the applicant to establish that there is no reasonable probability of confusion in the necessary sense.  However, I do not agree with this.  The 1995 act shows that the onus in an opposition follows the evidentiary onus.  It rests initially on an opponent.  My discretion, under s 55, is contained in a provision that requires me to decide the fate of the application “... having regard to the extent (if any) to which any ground on which the application was opposed has been established”.  Leaving aside any question of the extent of my own discretion, the onus is quite clearly on an opponent to establish a case before there can be any onus on an applicant to refute it.

The relevant part of the provision on which the opponent relies is as follows:

44.(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.

Section 44(1) establishes a specific ground for rejection.  That ground exists only in certain circumstances, when the requirements of paragraphs (a) and (b) are met.  As I have already said, the correct position is that an opponent that relies on that section faces an initial onus of establishing the specifics of the ground on which it relies.

To return to those specifics of s 44(1)(a), deceptively similar is defined in s 10 as follows:  “For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.”

The opponent relies primarily on two of the four trade marks to which I have already referred, 175701 and 184103.  In terms of sections 44(1)b and 12, the priority dates of those registrations are well before that of the pending application.  To complete the preliminaries, the goods covered by the registrations are, as Mr Willis conceded, identical to those specified in the present application.

Those things being so, the matter is to be decided by comparison of marks.  In the event of an adverse finding on that question, and hence under s 44(1), it will not be necessary to consider the effects of the remainder of s 44.  That is because the applicant has not filed any evidence on which any finding in favour of the applicant might be made under s 44(3) or (4).

Mr Willis argued that I should not pay too much heed to the fact that the opponent’s marks incorporated a striped device.  Such stripes were merely a reflection of the fact that striped awnings were regularly associated, either fancifully or in practice, with the barrows and stalls of ice-cream sellers.  That being so, Mr Willis stressed that the significant part of the applicant’s mark was the word CADBURY’S with the glasses of pouring liquid.  Reduced to its simplest, Mr Willis argued that, in practice, the material or essential parts of the marks are simply too different.

Mr Willis noted that there is evidence that Mr Tozer had been somehow confused by the applicant’s trade mark. Mr Willis put the matter down to either extreme haste or undue carelessness on Mr Tozer’s part. He also argued that Mr Tozer’s error was, apparently, a one-off. Even if it was indicative of the possibility of future recurrence, his action was still, according to Mr Willis, indicative of nothing but undue carelessness or of unreasonable haste, outside the ordinary concerns of the Trade Marks Act.

Mr Webb described the competing marks as follows:

The marks the subject of the application include devices which have all of the essential elements of the Unilever logo bar one.  They have the vertical stripes and they have the oval shape defined within the space circumscribed by the vertical stripes, that space extending across all internal stripes and a part of the two peripheral stripes.  In their essential features they differ from the Unilever logo only in the number of stripes they include: one has four, the other has six.  Added to the device within the applicant’s marks is a solid background with the name of the applicant in its signature style, the words “ice cream” and two glasses depicted pouring milk. 

Mr Webb argued that the words and glasses device in the trade mark are “less distinctive visually” than are the remaining elements. 

Mr Webb also argued that the applicant’s mark was obviously a house mark.  It would be used with more specific brands, much as the opponent’s evidence shows that the STREETS logo is used in conjunction with other trade marks such as PADDLE POP or MAGNUM.  Given this, he argued that the attention of buyers would be diverted from a close comparison of the competing house marks of the applicant and the opponent.

I take Mr Webb’s point that the opponent’s trade mark is registered without any limit as to colour and that the applicant’s mark also is sought to be registered without a colour limit.  It is thus possible, as Mr Webb argued, that the two trade marks will be used in the same colours. Even so, when it comes to the opponent’s registration number 184103, I have to agree with Mr Willis.  The opponent’s trade mark is clearly a STEETS trade mark.  It is true that some similarities emerge on comparison, but the primary weight, it seems to me, is in the words STREETS and CADBURY.

Mr Webb relied heavily on the declaration of Mr Tozer.  However, I do not think I can give sufficient weight to a one-off incident when not all of the surrounding details are clear.  With all respect to Mr Tozer’s veracity, I believe I must considerably discount his evidence.  He appears to me to have done little more than mistake one freezer cabinet for another in his quite understandable eagerness to get at the contents.  I think that any person who mistakes the applicant’s trade mark for the STREETS trade mark is being unduly careless, beyond ordinary habits and beyond the standards of the test of imperfect recollection.  Anyone who goes further, and infers, despite the differences between the two marks, that the similarities denote some sort of common origin or common parentage, would be reckless in the extreme.

The same conclusion also applies to two more of the opponent’s registrations, viz 294034 and 363610.

As to the other of the opponent’s registrations, the one with the ostensibly blank space, the matter is not so clear-cut.  This is the version that Mr Webb categorised as “the Unilever logo”, used internationally with a variety of apparently distinctive words in the space in question.

The case law is clear on the need to allow for the notional fair use of the applicant’s trade mark.  All such fair uses must be considered because, under s 44, the enquiry is a hypothetical one.  This notional comparison is with the mark as registered.  That registration, 175701, does not have any sort of endorsement explaining or limiting how the blank space will be used.  Moreover, the space positively lends itself to the insertion of a word or words that might be a trade mark.

The fact that, so far, the opponent has generally used the word STREETS in conjunction with the logo which is registered is not to the point.  Even with a large blank space, trade mark 175701 was registered as a distinctive trade mark and exists now as one which is capable of distinguishing the proprietor’s goods.  I must, therefore, recognise that use of that trade mark with descriptive words such as ICE CREAM in the space in question is a legitimate use of the mark as registered.

Mr Webb argued that use of the mark in just that way was entirely open and reasonable.  Prima facie, trade mark 175701 was the sort of mark likely to be used, with words in the oval shape, as a house mark to indicate the goods of the opponent, Unilever.  The fact that, world wide, the words used in the space are strong trade marks, such as STREETS or GOOD HUMOR, does not limit the opponent's right to insert ordinary descriptive words.

The applicant’s trade mark is, of course, wider than it is high.  It is dominated by the word Cadbury and the other elements within the oval border.  The opponent’s registration is, on the other hand, a long thin array of stripes, with a gap.  The combination of square and rounded ends to the stripes emphasises this.

It is possible that both marks will be used in the same colour.  Since neither mark carries any limit as to colour I will allow for that possibility, perhaps the purple mentioned by Mr Tozer, perhaps some other.  And I have already said that, hypothetically, the opponent’s mark, like the applicant’s, could be in the market place with the words ICE CREAM prominent in it.  Now, approaching the matter from the point of view of an ordinary consumer, in that situation, what is the risk of confusion? 

I must allow for the relevant context of buyers and sellers.  To paraphrase Australian Woollen Mills v F S Walton & Co Ltd (1937) 58 CLR 641, I must consider:

the usual manner in which ordinary people behave... the course of business and the way in which the particular class of goods are sold.  These give, it may be said, the setting, and the habits and observation of people in general affords the standard.

I do not accept Mr Willis’s reference to the commonness of stripes on hypothetical canvas stalls, but equally, the converse may not apply.  There is nothing about the evidence that suggests that stripes, as appearing in the applicant’s trade mark, are particularly good trade mark material.  Nor is there anything that suggests that consumers would assume that stripes and an oval, in themselves, denote the opponent.  Much will hinge on a case-by-case assessment.

I am satisfied, in this case, that when I make reasonable allowance for the surrounding circumstances, particularly the possible use of the words ICE CREAM in the opponent’s registration, the applicant’s and opponent’s marks have a similar look or first impression.  It is very often this question of first impression which creates the deception or confusion.  It is not, as Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd, (1951) 91 CLR 592 shows, sufficient that the confusion can be undone before the transaction is completed and the ice-cream eaten.

Accordingly, there is a real tangible danger of confusion inherent in the coexistence of the applicant’s mark with trade mark registration 175701. 

That being so, the opposition based on s 44 and on registration 175701 succeeds.

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

The relevant provision reads as follows:

60. The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a)it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had acquired a reputation in Australia; and

(b)because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

Under this heading, Mr Webb stressed the extent of the opponent’s reputation in what he called the Unilever logo.  That trade mark was used in Australia in conjunction with the word STREETS but would be familiar to many travellers, he argued, as being an international house mark.

I accept that, on sheer balance of probabilities, there must be people in Australia who know that the Unilever logo is used in other countries as a background for words such as GOOD HUMOR. I accept that that there is a likely but unquantifiable reputation due to that influence.  However, it is impossible, on the present evidence, to quantify the size of that group or to gain any measure of the extent of the international reputation which, Mr Webb argued, had spilled over into Australia.

The Australian reputation resides primarily, it seems to me, in a trade mark like 184103, which I have already considered in relation to s 44.  I must allow, now, for the reputation that exists in that trade mark.  I must also allow for a potential number of people in this country who might recognise the STREETS mark to be, beyond this, a corporate relative of the GOOD HUMOR mark and others like it.  However, the existence of such a group does not convince me that there is any significantly greater likelihood of confusion being caused by the trade mark owned by the applicant.  For the same reasons as I dismissed the ground of opposition under s 44 in relation to registration 184103, I do not accept that a ground has been established under s 60.

Conclusion:

The opponent has established a ground relied on in opposition.  I see no reason why I should now do anything but refuse to register the application.  In doing so, I award the opponent its costs in accord with the official scale.

T. Williams

Hearing Officer.
24 July 1998