Cadbury Schweppes Pty Ltd v Effem Foods Pty Ltd

[2005] ATMO 29

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 924821(30) - PICK 'N' MIX FAVOURITES - filed in the name of Effem Foods Pty Ltd.

Delegate:

Terry Williams

Representation:

Opponent: Chris Sgourakis, Griffith Hack patent attorneys

Applicant: Ross McLean, Baker & McKenzie solicitors

Decision:

S52 opposition: s41: mark capable of distinguishing - s 42, 43 and 59 grounds not established - s 60 fails because of inseparability of opponent’s trade mark from other of its trade marks - colour endorsement required as condition of registration

Background

1.     Effem Foods Pty Ltd (Effem) has applied to register the following trade marks.

2. The two versions to the mark, one black and white, the other in colour, constitute a series of trade marks in terms of s 51 of the Trade Marks Act 1995 (the Act).  For convenience I will refer to the application as though it is a single mark (the Effem mark).  The coloured version of the Effem mark shows the words in blue, edged with white.  The three balloons are red and the swirl shape, the background to the word FAVOURITES, is yellow.  The remaining oval device is in the same blue as the letters, a blue that tends towards what might reasonably be called purple by some viewers depending perhaps on the ambient light or the colour sensitivity of the individual. 

3.     The goods specified for registration are a broad range of foodstuffs in class 30.  The application lists these as follows:

Rice, pasta; cereal and cereal preparations; tea, coffee, cocoa; coffee essences, coffee extracts, mixtures of coffee and chicory, chicory and chicory mixtures, all for use as substitutes for coffee; non-medicated confectionery; pastries, cakes, biscuits, ices, ice cream, ice cream products, frozen confections; chilled desserts, mousses, sorbets (ices); bread; pastry; sweet spreads, savoury spreads, snack foods, prepared meals, sweet pies, chocolate, chocolates, chocolate products, sauces including toppings for ice cream and desserts; pizzas, pizza bases; sauces and toppings for pizzas; sauces for pasta and rice; salad dressings; mayonnaise; dips; all included in class 30.

4.     Cadbury Schweppes (Cadbury) opposes registration of the trade mark.  Both sides have filed and served evidence as provided for by part 5 of the Trade Mark Regulations, including further evidence.  This is as follows:

Cadbury’s evidence in support

Declaration by	Annexures
Andrew Nowicki	1-16

Effem’s evidence in answer

Declaration by	Annexures
Carol Mau
Gillian Woon	GW-1
Rhonda Steele	RAS 1-4

Cadbury’s evidence in reply

Declaration by	Annexures
Madeleine McLean
Chris Sgourakis

Effem’s further evidence

Declaration by	Annexures
Ann Beckenham	AB 1-4

Cadbury’s further evidence

Declaration by	Annexures
Kate Pearse	A and B

5.     I have been assigned to hear this matter and to decide it under delegation from the Registrar of Trade Marks.  At the hearing, Effem was represented by Ross McLean, solicitor, of Baker & McKenzie, solicitors.  Chris Sgourakis, a solicitor of the firm of Griffith Hack, appeared for Cadbury.

Evidence about trade usage

6.     Before taking in turn each of the grounds of opposition relied on by Cadbury, there is one aspect to the evidence that needs to be dealt with because it has implications for a number of the grounds.

7.     Effem, in the Steele and Beckenham declarations, has sought to show that the word FAVOURITES is used as part of a trade mark by others.  It makes up one element of the word components of the registered trade marks OLD TIME FAVOURITES, OLD AUSTRALIAN FAVOURITES, MARS FAVOURITES and GAROTO FAVOURITES.  Mr Sgourakis claimed that Cadbury was the only firm making genuine trade mark use of FAVOURITES.  He was critical of the Steele examples drawn from the register as there was no evidence of usage, let alone commonness in the market.  Similarly, he argued that there was no way of knowing the extent of use of actual examples shown in exhibits RAS4 of the Steele declaration, and AB 1 and 2 of the Beckenham declaration, albeit that the Beckenham examples represented purchases from major department stores.

8.     The examples in question are confectionery bags or copies of store catalogues.  Typically they include at least one house mark, just as do the CADBURY FAVOURITES packages.  The examples in the Steele declaration are FAMOUS MAKERS FAVOURITE BUDDIES, FAMOUS MAKERS FAVOURITE TREATS, BETTA FOODS ALLTIME FAVOURITE LIQUORICE ALLSORTS, and FIND-A-FAVOURITE BULK WRAPPED CONFECTIONERY.

9.     To these, Madeleine McLean’s evidence is a partial reply.  Ms McLean is the Brand Manager at Cadbury Schweppes Pty Ltd, a position that she assumed just after Effem filed the opposed application.  She personally is unaware of the products shown in the Steele declaration.  She notes that one of the examples has a use-by date of 1999 and concludes that the products were for sale many years ago, or are of short-lived or low-volume products.  Ms McLean, like Mr Sgourakis, argues that these instances prove nothing and that her “experience is that Cadbury is the only trader in the confectionery market that uses the single word FAVOURITES as a clear and prominent brand for its confectionery” (her emphasis).  She herself would conclude that any other trader who was using “the single word FAVOURITES as a brand for assorted confectionery product, particularly in the font style and colours used by Cadbury, would be unfairly trying to take a ‘free ride’ on Cadbury’s reputation.”

10.   This prompted the further evidence of Ms Beckenham, who was recently able to purchase packets of FAMOUS MAKERS FAVOURITE BUDDIES, FAMOUS MAKERS FAVOURITE TREATS and BETTA FOODS ALLTIME FAVOURITE LIQUORICE ALLSORTS, being products referred to in the Steele declaration.  At AB2 she exhibits packets of recently-purchased LOLLILAND DELICIOUS FAVOURITE TREATS and of ARNOTT’S FAVOURITES (the latter used on packaging for crisps or similar products).  She also brings into evidence, at AB3, the fact that packets of ALLENS CHEWMIX bear a panel that indicates the confectionery is “a mix of your favourite chews”, while the FUNSIZE VARIETY MIX packets carry text to the effect “your favourite mix of FUN SIZE pieces to share”. 

11.   Ms Pearse, on behalf of Cadbury, attempts to put those packages into a commercial context.  She exhibits evidence that shows that, on the information available to her through the AC Nielsen database of supermarket sales, the sales of the Cadbury product hugely eclipse the sales of any of the GAROTO FAVOURITES, FAMOUS MAKERS, LOLLILAND and BETTA FOODS products[1].  Her evidence shows that the ALLENS CHEWMIX product, however, is sold in more significant commercial quantities.

[1] The FAVOURITE BUDDIES product is sold through department stores such as Big W and K-Mart stores and Ms Pearse was not able to find information on it through AC Nielsen

12.   I note that, at the hearing, Mr Sgourakis launched a double salvo at the evidence brought on by Effem.  Apparently, I should disregard evidence of usage by others of the word FAVOURITES that occurs after the filing date, while taking account only of the “real” trade mark use that occurs before.  When I note also the suggestion in the declaration of Ms McLean that usages as recent as 1999 might carry little weight because they were “long ago”, it seems that Cadbury would impose some very rigorous and contradictory tests on Effem’s evidence.  While I note the dates that are relevant to this matter, I think that I should take all of the evidence into consideration because it appears to illustrate that, over time, the word FAVOURITES has been used in precisely its ordinary dictionary significance by a number of traders, either as part of a trade mark or in conjunction with trade marks.  I do not think that I should find that such use is “free-riding” simply because it occurred in 2004. 

13.   One other aspect of the evidence that should be noted is that “pick and mix” or “pick n mix” style marketing of confectionery appears to be common in the confectionery trade.  The selling process allows a buyer to select the weight and mixture desired from among a range of products.  Such is the destiny of products bearing the Effem trade mark:  customers are invited to select and bag products from a range of eight or nine items, each of which is boxed in a manner that assists the pick and mix selection process.  The various products are miniatures, sold with the Effem trade mark and another, such as MARS or BOUNTY, displayed on the boxes.

Grounds of Opposition

14. Cadbury has relied on five grounds of opposition: these are said to arise under sections 60, 43, 42(b), 59 and 41 of the Trade Marks Act 1995. I will deal with them in that order.

Section 60

15. To make a long story short, s 60 requires that Cadbury demonstrate that, at the priority date, another and deceptively similar trade mark had a reputation such that notional fair use of the Effem mark, for any of the goods covered by the application, would result in deception or confusion.

16. To deal with s 60 systematically, it is necessary to pose a number of questions:

a)           What relevant trade marks have been used by Cadbury?

b)           Is any one or more deceptively similar to the mark Effem has applied to register?

c)           If so, what is the reputation of that particular Cadbury trade mark (at the priority date) and

d)           Will the result of the use of the Effem trade mark in the face of such a trade mark(s), of such a reputation, be deception or confusion.

17. The difficulty in such an approach in the present case is the inter-relationship of the various trade marks used by Cadbury to identify its goods in question. As a consequence, and because of the way in which the various trade marks have been used by Cadbury, I believe that the reputation that Cadbury has built up in its relevant trade marks must lead to the failure of the ground of opposition under s 60. For reasons that I will set out below, I prefer to base my decision on (a), (c) and (d) above, and leave (b) partially unanswered. I will explain, later, why this is so.

18.   The trade marks relevantly used by Cadbury are at least threefold:  the purple colour[2] of the packaging of its goods, the words CADBURY FAVOURITES and, lastly, FAVOURITES simpliciter.

[2] This colour, when used on packaging in a particular manner, is subject to a pending trade mark application.  It is fair to say that trade mark rights are claimed by Cadbury.  I do not imply more than this.

19.   The evidence shows the word FAVOURITES to be used for a boxed assortment of miniature portions of Cadbury’s other products, such as CADBURY DAIRY MILK, CARAMELLO, CHERRY RIPE etc.  It would be idle to suggest that at least some of these other products are not familiar to the average consumer, or that those consumers are not all well and truly familiar with the word CADBURY, which itself appears on the wrappers of all of the miniature portions except for FRY’S TURKISH DELIGHT.  These wrappers are relevant because the miniature portions are all clearly and prominently depicted upon the cardboard carton in which FAVOURITES is sold, and visible also through a window on the front and one side of the box.  Therefore, a typical box of CADBURY FAVOURITES will have upon it a complex matrix of trade marks.  A typical box is as follows, the example being the front of a 95g carton, with the dotted line showing the edge of the window:

20.   It simply will not do, for the purpose of this decision, to look at the usage of the word FAVOURITES in Cadbury’s hands and to somehow extract, from this complex matrix, the single word in question, with or without the purple cardboard on which it is printed in yellow. 

21.   In fairness to Cadbury, I note that it is aggrieved by the fact that examination of its own pending application for the trade mark FAVOURITES (number 976791, filed subsequently to the Effem application) has produced the tentative conclusion that the Effem mark is deceptively similar.  However, and firstly, the pending Cadbury application is for a mark in black and white, to be assessed under s 44 in terms of notional fair use.  Also, secondly and perhaps more importantly, that examination, which is at an early stage, has been without the assistance of the trade evidence that is available to me.  Any finding of mine, made about the complex marks actually used by Cadbury, might be seen to be directly relevant to the examination of the Cadbury application.  Therefore, since the present opposition matter can be disposed of otherwise, I need not deal in full with the issue of deceptive similarity.

22.   The priority date that Cadbury must address is 27 August 2002, at which time the FAVOURITES assortment had been on the market for somewhat over 5 years.  Direct evidence of a significant reputation at that date is in somewhat short supply but can be inferred from sales and advertising figures and from the market share.  The McLean declaration shows that for 1999-2003, CADBURY FAVOURITES, the second most popular assortment, had about a 12% share of the market for chocolate assortments.  From the Nowicki declaration, assortments make up 19% of the overall market for chocolates.  Similarly, from the Nowicki declaration, FAVOURITES confectionery were (in March 2003, but supporting a favourable inference) the sixth-highest selling product in the total chocolate market in Australia and they were the second highest selling product in the chocolate assortments market, both rankings in terms of sales values. 

23.   Millions of dollars of these FAVOURITES assortment have been sold, with pre-2002 sales ranging from $17 to $30 million per annum.  FAVOURITES assortments have been sold in a wide range of grocery stores in every Australian State and Territory.

24.   Cadbury has marketed and promoted the product extensively including on displays, posters, buses, trains, sponsorships, signage, television, Internet sites and magazines.  Mr Nowicki cannot give separate figures for the promotion of FAVOURITES but estimates that total expenditure on advertising amounts to “many” millions, with $250,000 spent on an August 2002 Father’s Day/Footy Show promotion.

25.   I note the evidence that an independent and (presumably) professional market survey allegedly found that in 2001 FAVOURITES was “the brand consumers were most likely to consider when buying an everyday assortment of chocolates”.  I have some difficulty with this, and can give the claim little weight.  The methodology of the survey is not in evidence, nor is a copy of the report.  The bald results of the survey are apparently reproduced at Annexure 2 of the Nowicki declaration, though on stationery that would suggest that the text has not come direct from an independent source.  I think that, where a party relies on survey evidence to support claims that a laudatory and descriptive word has come to denote its goods, the normal principle applies with more than usual force.  That principle is that the methodology of the survey should be on view and the results clearly evidenced without any suggestion that they might have been incompletely disclosed, even unintentionally.

26.   Mr McLean, for Effem, noted that this extent of trade in itself would not necessarily establish a significant reputation in the trade mark FAVOURITES as at the critical priority date.  He noted that, at that date, other traders had used and registered trade marks that included the word in question.  The usage made by Cadbury was, almost always as CADBURY’S FAVOURITES.  He noted also the purple colouring of the packaging and I think I can take note of the fact that, at the time of the decision, Cadbury claims that the colour purple, when used in a particular way on packaging, denotes its goods to the exclusion of all others.  In other words, if Cadbury’s claim is correct, a usage of FAVOURITES, on the right sort of purple box, is tantamount to being Cadbury’s FAVOURITES. 

27.   Mr Sgourakis, for Cadbury, argued that CADBURY’S was a “house mark” and that where such a relationship applied there was nothing at all unusual in seeing two trade marks in use on goods.  No doubt he is correct but, equally, FAVOURITES would appear to be what Jacob J described in British Sugar plc v James Robertson & Sons Ltd[3] as a “limping trade mark”.  I will deal further with that issue, below, but for the moment let me say that my reading of the evidence is that, for all that the trade mark FAVOURITES has built up a reputation in Cadbury’s hands, that reputation is inseparably linked to the trade mark CADBURY and to the other trade marks used by Cadbury.  

[3] [1996] RPC 281

28.   Mr Sgourakis, for the purposes of preparing his written submissions, was able to isolate the word FAVOURITES from its position on a purple Cadbury box.  On that box, the yellow word FAVOURITES is printed on an angle, between the word CADBURY and the window displaying the miniature portions inside the box.  Mr Sgourakis invited me to decide if FAVOURITES, surgically separated from the actual usage I have just described, and set within a rectangular background of purple, was deceptively similar to the Effem mark.  I decline to answer that question because any answer that I could give would be misleading except in the vacuum of an abstract comparison far removed from the actual manner in which Cadbury conducts its business under its relevant trade marks.

29.   Therefore, while I accept that, at the priority date, the FAVOURITES assortment was quite well known, this would appear to have been simply as a shorthand form for either “the FAVOURITES assortment that Cadbury makes” or perhaps “the FAVOURITES assortment in the largely purple box”, or both.  While I appreciate that the usage made by Cadbury is at a higher quantum level than any of the other FAVOURITES products shown in the evidence, I do not see that its use is more “real” trade mark use than some of the other instances.  Mr Sgourakis suggested that most of the other instances were not “use as a prominent trade mark, but more like a descriptor”.  This would appear to be a matter of quite subjective opinion.  To me, the evidence amply supports my own interpretation, given at the beginning of this paragraph.

30. Mr McLean’s written submissions allege that Cadbury must show that FAVOURITES is “distinctive of the opponent alone”. As a statement of general principle, I think this goes too far in the other direction. Section 60 appears to be broad enough to allow for more than one conflicting trade mark. I therefore do not need to decide of whom, if anyone, the trade mark FAVOURITES is “distinctive” (a term not used in the provision itself). It is quite possible to imagine two traders, each with prior reputations in a trade mark such that either of them could readily establish a s 60 ground against a third party. However, in such a case I would be very surprised, were the ground to be established, to also find that the term in question was one that was well-suited for simultaneous use by a number of other competitors, and was in fact in use by them.

31.   The present is not a case such as PHOTODISC or GOLDEN CRUMPETS[4].  In each of those cases, an opponent was able to mount a successful opposition to a trade mark application, made by another party, incorporating the word(s) in question.  However, in neither of those cases was the issue of exclusivity as muddied as it is here.  I will revert to that issue below, but for the moment let me say that, as a trade mark, FAVOURITES does not, on this material, appear to be endowed with any scintilla of inherent adaptation[5].  Nor does the evidence suggest that this might be counterbalanced by a finding that the word in question has at any stage come to denote the goods of Cadbury to the exclusion of others.

[4] Gibson v Photodisc Inc [1998] ATMO 47 and Re Application by Hardings Manufacturers Pty Ltd (t/a Wyandra Industries) (1987) 8 IPR 147, respectively.

[5] I note that the examiner of the Cadbury trade mark, rendered in black and white, has concluded that it has some degree of inherent adaptation.  It would not be appropriate, or fair to Cadbury, for me to purport, now, to review that finding.  However, on the material available to me in the present opposition matter it is not one that I agree with.

32.   What both marks most prominently share, aside from some similarity in font, and (arguably) reversed but similar colours of rendition, is nothing more than a common reference to the fact that the products being sold are favourite or popular lines from the two firms in question.  The fact that one or more of the word elements, themselves common to the trade, might be more important if the Effem trade mark is referred to orally is not fatal.  Here, Mr McLean referred me to a re-statement of an obvious principal by Susan Farquhar, then the Chief Assistant Registrar, in J Reynolds Tobacco Co v Philip Morris Inc[6].  While that decision is concerned with distinctiveness under the former legislation, the principle of comparison of a whole mark, on the basis of its look as well as its likely verbal description(s) still holds good.

[6] 12 IPR 256 at 259.

33.   I find that, because of the nature of the word FAVOURITES and the use made by Cadbury, the s 60 ground has not been established. I do not need to decide if the trade mark FAVOURITES (in the form and manner as used by Cadbury) is deceptively similar to the Effem mark, a finding against which Mr McLean argued strongly. If, simply for the purpose of this argument, I assume that it is deceptively similar, the reputation in the trade mark is such that deception or confusion will still not arise from use of the Effem mark. 

34.   At the hearing there was some discussion about the role of blue colouration in the Effem mark, particularly where yellow is also used by both Cadbury and Effem, albeit in different ways.  Both advocates agreed that the coloured representation shows that I am entitled to assume, not just that the mark might notionally be used in colours that will, so Cadbury claims, increase the risk of conflict with Cadbury’s product, but that this is and will definitely be the manner of use.  Mr Sgourakis also expressed concern that colours inherent in the black and white version might be selected such that the word FAVOURITES was in yellow.  Were that to be so, I observe that the background would of necessity also be different.  The background might, at the extreme, be a purple swirl shape, or with the swirl set on a purple disc.  These are not particularly likely prospects, though, conversely, they would have a very significant impact on my findings below.  There is no suggestion that Effem has any such intention and indeed such usage might well be said to be outside the scope of notional fair use.  Therefore, to eliminate the issue entirely, avoid uncertainty and focus the debate more clearly on what is actually happening or likely to happen, I think the scenario is best dealt with by imposing a condition of registration.

35.   At the time of this decision Cadbury does not have a registration for the colour purple per se.  Its relevant application is being opposed by two other traders and it has not been established in the opposition forum that any particular usage of purple will distinguish chocolate goods as being a Cadbury product.  With all due respect to Cadbury’s claims with respect to purple, I think that those arising from an asserted conflict with a colour that, at most, arguably resembles purple are somewhat premature.

36.   Mr McLean noted that the use of a capital F for the beginning of the word FAVOURITES was simply both logical and normal – he compared the usage with the FIND-A-FAVOURITE bulk wrapped confectionery shown in annexure 4 to the Steele declaration.  The actual manner in which those words were rendered is “Find a Favourite” on the containers illustrated in a TARGET catalogue, or “Find-a-Favourite” in the accompanying text, but in both instances the relevant word starts with a capital and continues in lower case, just as in Effem’s and Cadbury’s trade marks.

37.   Putting Cadbury’s claims at their highest, Cadbury resents the use by Effem of the word FAVOURITES, in a blue that some consumers under some lighting conditions would arguably see as purple, on a yellow background.  Cadbury for its part has, in the context I have already described, used the word FAVOURITES in yellow on purple, and rendered as shown above.  I am to consider both trade marks in use on, among other things, boxed selections of chocolates or confectionery.  Those are the actual goods on which Cadbury has used its mark and (from Cadbury’s point of view) one keenly disputed aspect of the notional comparison with the uses that Effem would be entitled to make were it to gain registration.  In an alternative, I am to postulate notional fair use of Effem’s trade mark for a range of confectionery sold by the pick and mix self-selection method, just as it actually appears to be.

38.   No doubt, in the latter case, “pick n mix” is common to the trade, and must be discounted to some extent as Mr Sgourakis argued.  He portrayed the remaining elements as nothing of significance.  The banner and disc were common design features and balloons were simply suggestive of parties or festivities, at which the consumption of chocolates was popular.  The balloons, which he noted could not be clearly seen on the depiction of the mark at the Trade Marks Office database, therefore added very little to the matter.

39.   As to this, I disagree.  For the reasons that I think show the mark capable of distinguishing (see below) I think it is equally capable of being distinguished from Cadbury’s trade marks.  While I understand and appreciate why Cadbury may not find Effem’s proposed usages welcome, I do not think that the elements in common, when balanced with the trade usages, the ordinary signification of the word FAVOURITES and the distinguishing elements, would result in a sufficient likelihood of deception or confusion.  Accordingly, the ground is not established.

Section 43

40.   Mr Sgourakis argued that the usage of the trade mark FAVOURITES by Cadbury in the manner described has elevated FAVOURITES to the point where there were sufficient similarities between the Effem mark and the Cadbury trade mark to endow the former with a connotation.

41.   He argued that the presence or otherwise of a connotation will depend on the facts of each case and is one of degree: McCorquodale v Masterson[7].  While I agree with him, there is a considerable difference between the facts pertaining to Cadbury’s usage of FAVOURITES, an ordinary and commonly-used descriptive term, and more unique terms or elements such as DIANA’S LEGACY IN ROSES with a stylized D device.  The evidence here is that FAVOURITES is used both as part of a trade mark by others and as an ordinary descriptive term.  Those facts lean against any finding that the word has some connotation that could render the Effem trade mark deceptive.  Mr Sgourakis argued that FAVOURITES has a connotation arising from the “cultural context”[8] that has itself arisen because of the extensive usage by Cadbury. That, however is simply to restate the s 60 argument. Even if it be said, for the purposes of argument only, that FAVOURITES, as a sign rendered in yellow on purple, has such a connotation, I do not believe that it retains that connotation in the Effem mark.

[7] 2004 FCA 1247 at 53

[8] Here he referred to my decision in Wiley Publishing v Moondance Pictures Pty Ltd [2004] ATMO 70.

Section 42(b)

42.   Briefly, Mr Sgourakis noted the leading case of Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683. His claim was that, because use of the Effem trade mark would be contrary to the law of passing off and to s 52 of the Trade Practices Act 1974, the relevant ground of opposition was established. Mr Sgourakis conceded that the standard under these headings would impose a higher threshold than merely causing confusion. The conduct complained of would have to be producing actual or apprehended damage, or be likely to mislead or deceive, respectively. However, he argued that the use in the relevant colours on boxed assorted confectionery was a very clear case. For the reasons I have set out in relation to sections 60 and 43, I am not satisfied that he is correct.

Section 59

43.   Mr Sgourakis noted that, in Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd[9], the presumption of intention to use (Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 401) was rebutted by the evidence of the trade mark applicant itself. Mr McLean countered that Austereo rested on an admission, a factor that could not be found in the present evidence.  In principle, the mark could be used on all of the goods claimed, he noted.  While Ms Steele was silent about intention, that was not fatal unless evidence brought Effem’s intention to use the mark into question.

[9] [2004] FCA 968, 61 IPR 257, paras 54-56

44.   The relevant passage from Austereo is this:

[54] Austereo had contended in any event that registration could not be granted in respect of one of the services designated in the application, that is, “production of radio programmes”. The ground of opposition advanced is that DMG Radio does not intend to use the mark in relation to that service: s 59 of the Act. It points to the lack of any evidence of such an intention on DMG Radio’s part.

[55]     DMG Radio’s response is that it is inherent in the nature of its business that it produces programs, and causes them to be produced, for airing under the mark. In consequence it satisfies the test of s 7(5) of the Act that it uses the mark “in physical or other relation to the services”.

[56]     Put shortly, my own view is that I cannot be satisfied that DMG Radio intends to use the mark in the provision in the course of trade of the distinct service of production of radio programs. From Mr Buchanan’s evidence I infer that DMG Radio’s production of radio programs is subsumed within its activity of radio broadcasting. It is in relation to that service that the mark is used. Accordingly, I would have refused registration in respect of the distinct service of “production of radio programmes”.

45.   I think the fairest reading of Finn J’s decision is that, “when all the evidence was complete”[10], he drew an inference that authorised the investigation of the intentions of DMG Radio, and was not “satisfied”.  There does not seem to have been a crucial admission, yet Finn J, having looked at the trade mark applicant’s evidence about the business it conducted, found the intention wanting.

[10] This terminology is mine, originally from Estex Clothing Manufacturers Pty. Limited v. Ellis and Goldstein Limited, 116 CLR 254 at 258

46.   This may be an appropriate approach, but not here.  It is perhaps arguable that the applicant has no intention to go beyond the confectionery trade where, presently, the mark “is used in connection with a selection of confectionery products that are chosen by the consumer from a range of small sized products of the main brands of the applicant.”  The Steele declaration is, as Mr Sgourakis noted, silent as to intention and Effem does not appear to have any main brands that are used for, say, breakfast cereals.  Effem has conducted its present trade under this trade mark since 2002, and since 1999 under an earlier form, a similar trade mark.  This stands in marked contrast to the breadth of the statement of goods, which covers everything from rice through confectionery to pizzas and mayonnaise.

47.   Effem, on the facts of the present case, can rely on the principle of Aston v Harlee.  Given that Effem is apparently a major corporation, it is no doubt within its means to use the trade mark on whatever of the claimed goods it wishes.  It is administratively convenient for examination of a trade mark to take a specification of goods at face value.  Clearly, the Austereo decision is sufficient authority to suggest that the matter can and should be revisited if an opposition brings relevant evidence to light.  This will require a balancing of the detail of the evidence and the breadth of the specification of goods or services against the prima facie position.  This is that an intention to use exists until the facts call it into question.  However, unless the balance tilts against the applicant, I should have no need or inclination to conduct an item-by-item examination into its intentions[11].  On the present facts, section 92 is the appropriate forum if Cadbury wishes to place an applicant of the calibre of Effem under an onus to verify its intention to use. 

[11] Fullagar J in Aston v Harlee, supra: “I cannot think that the Registrar is called upon to institute an inquiry as to the intention of any applicant, and I think that, on an opposition or on a motion to expunge, the burden must rest on the opponent, or the person aggrieved, of proving the absence of intention.

48. Perhaps anticipating this, Mr Sgourakis had a second line of argument, that the intention to use was defective in relation to confectionery in particular. As to the latter, Mr Sgourakis argued that the usage intended was not as a trade mark but as a descriptor. Mr McLean replied that the use made by Effem was at least as much trade mark use as that relied on by Cadbury. However, without having to resolve that interesting comparison, I think the hinge of Mr Sgourakis’s argument is that the Effem trade mark can be characterised as a “descriptor”. This choice of word appears to ignore entirely the effects of the device elements. Again, without repeating what I will say in relation to s 41, I cannot agree with him.

Section 41

49.   I will not repeat the analysis of Branson J in Blount v Registrar of Trade Marks. Mr Sgourakis’s thesis is that the Effem trade mark, taken as a whole, has a degree of inherent adaptation to distinguish but is not prima-facie capable of distinguishing and requires the support of evidence of use. Mr Sgourakis would interlock this with his argument under s 59, that the sign in question is not used as a trade mark at all but as a mere descriptor, in order to show that the trade mark should not be registered even under the terms of s 41(5).

Mr Sgourakis noted that his own declaration, in the evidence, set out the history of two earlier applications by Effem, numbers 783919 and 864084 respectively.  These were for a trade mark as follows:

50.   The later-numbered application was a divisional of the earlier; the mark is the same in both.  Neither application was accepted and obviously the mark in question is not the present version, which Effem has used since 2002[12]. 

[12] The usage of the present mark is extensive, as was that of the earlier version, though significantly less than that of the Cadbury product

51.   Mr Sgourakis noted the examiner’s criticism of the word elements in the earlier trade mark: “favourites which one can pick and mix” were clearly not words inherently capable of distinguishing any one trader’s confectionery from another’s.  With this I agree.  He noted the words of Finn J in Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd at paras 46-48: the words in question had no “capacity to arrest and to make a sufficient appeal to the imagination”. That comment, of course, is helpful, though it is not a substitute for the traditional test, the likelihood of others, with no improper motive, wanting to use the words on their own goods.

52.   Mr Sgourakis characterised the additional elements of the present Effem trade mark as being routine embellishments.  He characterised the balloons as typically a feature of parties and entertainment, at which confectionery and chocolates were commonplace.  Relevantly, he noted the Trade Marks Manual of Practice and Procedure Part 22, para 25. “Composite trade marks”:

A composite trade mark will not necessarily be capable of distinguishing simply because it contains a registrable element or even a trade mark which is already registered.  The relative proportions of the elements within the mark will affect the ability of the trade mark, taken as a whole, to distinguish the applicant’s goods or services.  The overall impact of the trade mark on the potential purchaser should be considered.

53.   Mr McLean for his part suggested that it was an artificial exercise to suggest that the combination of words “pick n mix favourites” was apt for ordinary use.  He argued that the meaning of “favourites which one can pick and mix” was a rationalisation, and that its mere existence did not establish that the words were a combination apt for ordinary use or needed by others.  However, I think a fuller quote from the Austereo decision, supra, is helpful.  Of the combination SOUNDS DIFFERENT, Finn J said:

First, the formula itself embodies a linguistic ambiguity: Does it incorporate a verb and an adverb or a stylised noun-adjective form?  Second, it asserts difference without indicating what it is that “sounds different” and what is the criterion of difference.  Aggregated these two qualities have some capacity to arrest and to make a sufficient appeal to the imagination as to give them some inherent capacity to distinguish the designated services of DMG Radio.  Or, to use the older formula, they are not entirely devoid of inherent adaptation to distinguish.

This said, the formula is by no means sufficiently adapted to distinguish as to justify its being characterised as, of itself, being inherently adapted to distinguish.  Though it does not appear to have been used to date by other broadcasters in positioning statements or in other “branding strategies” - save for the calculated use made by Austereo - it is apt to express naturally and in ordinary language what is the burden of many of the statements that are in evidence which deal with the broadcasting content or “audio product” of particular stations.  It does not stray that far from linguistic usage that could naturally and reasonably be expected of broadcasters.

54.   While I note that the present combination is not apparently ordinarily used, the two elements “favourites” and “pick n mix” are both common in the trade and I think that I can say that it is a significant likelihood that this combination, too, would be used without improper motive.  The combination takes on a readily apparent meaning that was not present in SIZZLE & STIR[13], to which Mr McLean referred.

[13] Effem Foods Pty Ltd v Unilever plc (2000) 50 IPR 627

55.   However, the present focus should not be on the detail at the expense of the whole.  This matter is not about the registrability of the combination “pick n mix favourites”, nor of those words in what Mr McLean described as a “stylized” manner.  The focus must be on the mark as a whole, albeit a whole of which those words are a quite a major part.  I have earlier noted the reference Mr McLean made to J Reynolds Tobacco Co v Philip Morris Inc and I reiterate that the fact that these words may be used when the mark is summarised verbally is not necessarily fatal, since the visual impact of a trade mark must always be part of the reckoning.

56.   Mr McLean drew an analogy with Application by New Zealand Natural Pty Ltd[14], found to be registrable on its merits under s 25 of the Trade Marks Act 1955.

[14] (1993) 28 IPR 22

57.   While I suggest that is not generally useful to return to the standards of administrative practice under the old legislation I think that in this instance he is correct, and the comparison is probably apt.  It may well be that the device of a mountain is better endowed with inherent adaptation to distinguish than are the balloons in the present trade mark.  Even so, the end result in Effem’s case is still a clearly identifiable whole that will fix itself in the recollection as an identifier of a particular source of confectionery.  In concluding as I have, I have taken into account the warning by Romer LJ in Clement et Cie's Trade Mark (1899) 16 RPC 611 at 618:

...our judgement will in no way, I think, give rise to any idea that it would sanction the registration of words which in themselves would not constitute a proper trade mark, merely because some flourishes were colourably put around them to try and make out a distinctive label - a compound label - when, in fact, what was really sought to be registered and intended to be registered were the words themselves.

58.   It is beyond dispute that a trade mark can be, as a whole, capable of distinguishing even though composed of elements that are individually of no great inherent adaptation to that purpose[15]. It may be that the present combination of words, PICK ‘N’ MIX together with FAVOURITES, is equally open to this criticism. However, in their place in the mark as a whole, even if that is so, the words certainly do not overburden the ability of the trade mark to distinguish. The mark, as a whole, is therefore capable of distinguishing within the terms of s 41(3) of the Act just as the examiner concluded in accepting the application. This ground of opposition is not established.

[15] Shanahan’s Australian Law of Trade Marks and Passing Off, para 5.205

Conclusion:

59.   Mr McLean’s submissions suggested that the opponent had, overall, not established that the application should “clearly” not be registered.  Mr Sgourakis, for his part, did not accept that the standard to be met by an opponent, when before a delegate of the Registrar of Trade Marks, had been moved. 

60.   Mr Sgourakis noted that the test applicable to patent oppositions[16], and adopted by the Federal Court on appeal in trade mark matters[17] meant that the benefit of the doubt went to an applicant where the court was called on to decide an opposition.  However, he also noted the decision of Gyles J in the later case of Clinique Laboratories Inc v Luxury Skin Care Brands Pty Ltd[18].  In brief, Gyles J expressed some difficulty with the concepts that appeals from a decision of the registrar were quasi-summary or that there was anything in sections 33 or 55 that indicates that a ground of opposition is to be established to any special standard of proof or in a summary or cursory fashion.

[16] F Hoffman-La Roche AG v New England Biolabs (2000)

[17] Lomas v Winton Shire Council [2002] 91 AIPC 839, FCAFC 413 at 17-19, Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd [2003] FCA 901 at 15-22

[18] 2003 FCA 1517, at 10 -13.

61.   Mr McLean for his part conceded that the Federal Court had a focus on the court’s approach to appeals from decisions of the registrar.  However, he also noted the authority of the Lomas decision, see footnote 17.  He argued that since an opposition and a rectification matter could both be grounded on the same provision, there was a consistent policy argument in favour of having a higher threshold for the opposition matter.

62.   The form of words “clearly not be registered” has been used in some recent decisions of delegates of the registrar.  Even so, I think perhaps the safest course for me, as a delegate of the registrar and required to make an initial decision under s 55, is to say that the opponent bears an onus to establish a ground of opposition, and that the measure of that onus is set by well-understood law[19]. 

[19] Briginshaw v Briginshaw (1938) 60 CLR 336 at pages 361-363

63.   Had Cadbury met that onus, I think this would be sufficient to establish with the necessary degree of clarity that the trade mark should not be registered.  However, subject only to a matter of debate as to the colours of rendition, Cadbury has not done so. 

64.   The remaining matter is the colours in which the trade mark will be used.  It appears to me to be highly unlikely that, of all the colours in the spectrum, Effem would wish to use the trade mark with the word FAVOURITES in yellow upon a purple background.  On the other hand, were it to do so, this would have a considerable bearing on some of my previous conclusions; sufficient, I think, to authorize the following condition of registration:

It is a condition of registration that the trade mark will not be used with the word FAVOURITES rendered in yellow and with any purple background. 

65.   Subject to that condition, the trade mark application 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.

66.   Given the condition of registration, I think that it would be inappropriate to make an award of costs.

Terry Williams

Hearing Officer

Trade Marks Hearings

17 June 2005