Cadbury Schweppes Pty Ltd v Effem Foods Pty Ltd

[2005] ATMO 40

TRADE MARKS ACT 1995

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

Re:Opposition by Cadbury Schweppes Pty Ltd to registration of trade mark application 809637, 963042(30) - M - filed in the name of Effem Foods Pty Ltd.

Delegate:

Jock McDonagh

Representation:

Opponent: Mr Chris Sgourakis of Griffith Hack, Attorneys

Applicant: Mr Ross McLean of Baker & McKenzie, Solicitors

Decision:

Section 52 opposition – sections 41 & 59 grounds not established – trade mark may proceed to registration.  Costs awarded against the opponent.

Background

1. The applicant, Effem Foods Pty Ltd, applied to register the following trade marks:

Application Number:	809637	963042 (series)
Priority date:	7 October 1999	23 July 2003
Goods:	Class  30:  Confectionery	Class  30:  Confectionery
Trade Mark:	Endorsement: The trade mark consists of the letter M. The dotted lines are not part of the trade mark, they are merely examples which are indicative of ways in which the trade mark might appear on the goods
Advertised:	19 June 2003	29 January 2004

1. The opponent, Cadbury Schweppes Pty Ltd, filed notice of opposition to trade mark registration 809637 on 19 September 2003, and to trade mark registration 963042 on 25 February 2004.  The notices listed effectively all of the available grounds of opposition provided in the Trade Marks Act 1995 ("the Act").

2. The opponent duly served and filed evidence in support. The applicant likewise served and filed evidence in answer.

3. The matter came to a hearing before me, as a delegate of the Registrar of Trade Marks, in Sydney on 29 April 2005. Mr Chris Sgourakis of Griffith Hack, Attorneys, represented the opponent. Mr Ross McLean of Baker & McKenzie, Solicitors, represented the applicant.

Evidence

1. The evidence consists of the following declarations:

Declarant	Date declared	Exhibits	Known As
Evidence in Support
Niko Spelbrink	13.04.04	Annexures 1 to 4	Spelbrink
Tracey Murray	23.04.04	Annexures 1 to 4	Murray
Bill Crowder	05.05.04	Annexures 1 to 20	Crowder
Evidence in Answer
Ann Jean Beckenham	10.08.04	Annexures A & B	Beckenham
Rhonda Anne Steele	05.11.04	Annexures A to Y Exhibits RAS-1 to RAS-3	Steele

1. The Spelbrink declaration is made by a practicing graphic designer with some 40 years experience. It discusses typeface, generally and with specific attention to the letter “m”.

2. The Murray declaration is made by a librarian employed by the attorneys for the opponent.  She had copied and annexed to the declaration a number of definitions of the letter “m” from dictionaries.

3. The Crowder declaration is made by the General Marketing Manager (Kids, Sugar & Food Brands) of the opponent. He gives background information about the opponent, and specific information as to the use of letters by food and confectionary traders.

4. The Beckenham declaration annexes copies of an affidavit and a declaration previously made by Rhonda Anne Steele that set out evidence of use and reputation of the applicant’s “m” trade mark in Australia.

5. The Steele declaration is made by the Marketing Property manager for a company that owns the applicant.  The declaration provides further background to the applicant and the use of the letter ‘m’ in the advertising, packaging and other merchandising involving the letter “m” as a trade mark.

Issues at the hearing

1. At the hearing, the opponent limited itself to grounds 1 and 7 of its notices of opposition. That is that the trade marks are incapable of distinguishing the applicant’s goods (section 41) and that the applicant does not intend to use the trade mark (section 59).

2. The opponent also relied on an alleged inherent flaw in application number 809637.  The flaw was said to be an inconsistency between the first sentence of the endorsement and the pictorial representation of the mark.

3. The opponent raised the issue of the standard for assessing opposition grounds.  The dicta of Bennett J in Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2004) 59 IPR 318, at 322, that a trade mark opposition “should be upheld only if the Court is satisfied that the trade mark should clearly not be registered” (adopting the test in patent opposition set out in F. Hoffman la Roche v New England (2000) 99 FCR 56) was brought to my attention and distinguished.

4. The opponent was of the view that there is nothing in the Act which indicates that the opponent has to establish a ground of opposition to any special standard of proof. Further, if one were to accept the test set out in Torpedoes, this test simply means that the opponent must make out its grounds of opposition with a reasonably high degree of probability, but the Registrar must still scrutinise the applicant's mark and not give it the benefit of the doubt.

5. I agree that that there is nothing in the Act which indicates that the opponent has to establish a ground of opposition to any special standard of proof beyond the civil standard. I am of the view that her Honour’s remarks were directed to how judicial power in prescribed courts is exercised in respect of an appeal from a decision of the Registrar. In my opinion, she was not referring to the administrative decision of the Registrar in opposition proceedings.

6. Alternatively, if I am satisfied on the balance of probabilities that a ground or a number of grounds of opposition are made out, then I am of the view that the trade mark clearly should not be registered. 

Inherent flaw in application 809637

1. The opponent is submitted that application 809637 was invalid due to inherent flaws in the application.  I was referred to the Lifesavers case: Cadbury Schweppes Pty  Ltd & Effem Foods Pty Ltd v Societe des Produits Nestle SA [2003] ATMO 74 at paragraphs 10-14 where the hearing officer found that the application was problematical for reasons inherent in the application itself, as distinct from the merits of the application of opposition.

2. It was submitted that the first sentence of the endorsement for the 809637 mark suggests that the mark is the letter ‘M’ per se, yet in fact the representation of the market shows a small letter ‘m’ of a certain typeface with dotted lines around it and the second sentence of the endorsement also refers to the pictorial representation and attempts to describe the dotted lines.

3. While I accept that the endorsement is ambiguous, which the file attributes to the Examiner rather than the applicant, I do not think that it amounts to an inherent flaw in the application.  Further, and as pointed out by the applicant, in the Lifesaver case the opponent succeeded on section 41 grounds and not on the flaw in the application.

4. Additionally, the Lifesaver case was considering a shape mark and the problematical aspects were far more marked and relevant than in this case.  I do not think I need consider it further.

Ground 1: Section 41 - Inherent capacity to distinguish

1. The opponent submitted that the applicant's marks are devoid of inherent adaptation to distinguish and that the provisions of section 41 (6) were applicable.  The opponent further submitted that there was no evidence of the marks factually distinguishing confectionary goods under either section 41(5) or 41(6).

2. The opponent referred me to the evidence of dictionary definitions of the letter ‘m’, in particular its use as abbreviation.  I was also referred to the evidence of the use of letters in trade, for example has alphabet shaped foods.

3. The opponent also raised a ‘letter depletion argument’ analogous to the ‘colour depletion argument’ in Philmac Pty Ltd v Registrar of Trade Marks [2002] FCA 1551. That is to say the limited number of single letters, like a limited number of colours, renders it more likely that other persons are trading in confectionary and being actuated by proper motives will think of a letter and want to use it in connection with similar goods.

4. The opponent also referred me to the manuals of practice and procedure of the Australian Trade Marks Office, of the New Zealand and United Kingdom equivalents, and that of the Office for Harmonisation in the Internal Market (OHIM) For Community Trade Marks, all of which consider that single letter marks are prima facie lacking adaption to distinguish.

5. In contrast, the applicant submitted that its marks were rightly accepted for registration under section 41(5) on the basis of the combined effect of the limited inherent capacity to distinguish coupled with the evidence of the extensive use of the applicant's marks by the applicant.

6. Further, and in the alternative, in the event that its marks were held to have no inherent adaptation to distinguish the designated goods, it was submitted that it has been established that the applicant's marks have, because of the extent to which they had been used before the relevant priority dates, become distinctive in fact of the goods of the applicant so that the provisions of section 41(6) applied to require registration of the marks.

7. That there was no controversy between the parties in respect of the appropriate tests as to whether a mark is inherently adapted to distinguish.  Indeed, both parties accepted the Manual of Practice and Procedure of the Australian Trade Marks Office statement that “[o]ne or two letter trade marks, unless it represented in an unusual manner, possess a limited inherent adaptation to distinguish and can only be registered with evidence of use in terms of subsections 41(5) and 41(6).”

8. The classic statement of the test involved is that of Kitto J in Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 at 514:

   [T]he question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.

9. Relevantly, Note 1 to subsection 41(6) states:

   Note 1:  Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

   (a)the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

   (b)  the time of production of goods or the rendering of services

10. I consider that the applicant's marks fall within section 41(5). I am satisfied that the evidence demonstrates that by the use, and intended use, of the trade mark it does or will distinguish the designated goods as being those of the applicant.

11. In particular, I note that the evidence does not support the proposition that the letter 'm' has particular significance in the confectionary category that requires it to be available as a common abbreviation for a usual descriptor of confectionary.  Further, single letters do not seem to be in ordinary use, or likely to become a sign in ordinary use, as trade marks for confectionary and the opponent's evidence that such letters have the potential for such use does not require the applicant's marks to be dealt with under section 41(6).

12. Am satisfied that the applicant has filed evidence of significant used before and after the priority dates of the relevant marks.  Further satisfied that the evidence shows that as a result of their use the applicant's marks distinguish its confectionary products from those of others and that their capacity to do so as at the priority dates is also clearly established.

13. I dismiss this ground of opposition.

Ground 2: Section 59 - intention to use the trade mark

1. In the light of the conclusions I have made in respect of the previous ground, this ground cannot stand.  In any event, the opponent did not press it at the hearing. I dismiss this ground of opposition. 

Decision

1. The opponent has not established its grounds of opposition. Therefore, the applicant's trade mark may proceed to registration one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued.

Costs

1. The applicant sought its costs.  I see no reason why costs should not follow the general rule. I award costs against the opponent and direct that the opponent pay the costs of the applicant in accordance with the Official Scale (Schedule 8 of the Trade Marks Regulations 1995).

Jock McDonagh

Hearing Officer

Trade Marks Hearings

29 July 2005