Cadbury Schweppes Pty Ltd v Wal-Mart Stores Inc

[2004] ATMO 3

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 841508(5) - SPRING VALLEY - filed in the name of Wal-Mart Stores, Inc.

Delegate:	Jock McDonagh
Representation:	Opponent: Chris Sgourakis of Griffith Hack, Attorneys Applicant: Stephen Burley instructed by Clayton Utz, Lawyers
Decision:	Section 52 opposition: ss 42(b) and 60 grounds. Registration refused. Costs awarded against the applicant.

Background

1. Wal-Mart Stores, Inc (“the applicant”) has filed application to register the trade mark, details of which follow:

Application Number:	841508
Priority date:	5 July 2000
Goods:	Class 5: Vitamins and minerals
Trade Mark:	spring valley
Advertised:	20 September 2001

1. On 20 December 2001, Cadbury Schweppes Pty Ltd (“the opponent”) filed a notice of opposition pursuant to section 52 of the Trade Marks Act 1995 (“the Act”). The notice specified 13 grounds of opposition, in effect each of the grounds provided by the Act.

2. The matter came before me, as a delegate of the Registrar of Trade Marks, for hearing in Canberra on 17 October 2003.  The opponent was represented by Mr Chris Sgourakis of Griffith Hack, Patent and Trade Mark Attorneys of Melbourne.  The applicant was represented by Mr Stephen Burley of counsel instructed by Clayton Utz, Lawyers of Sydney.

3. Four grounds of opposition were relied on at the hearing, being those under sections 42, 43, 44 and 60 of the Act. The opponent did not pursue the remaining grounds.

   Evidence

4. The evidence filed in these proceedings consisted of the following:

Date	Declarant	Description	Exhibits	Known As
Evidence in	Support
15.02.2002	Jennifer VERNON	Brand Manager Cadbury Schweppes	JV-1 & JV-2	Vernon
22.05.2002	Jaqueline MOUTSIAS	Research Consultant	A to D	Moutsias
Evidence in	Answer
15.01.2003	Rebecca Lea McMAHON	Paralegal, Clayton Utz	Annexures A to D	McMahon
14.03.2003	Allison D GARRETT	Vice President & General Counsel Marketing Division Wal-Mart Inc	A to D	Garrett
07.03.2003	Lou PUIM	Director Marketing Wal-Mart Canada Corp.	A	Puim
Evidence in	Reply
29.07.2003	Janet CHEQUER	Market reseacher/ Licensed Inquiry Agent	Annexures A to E	Chequer
04.08.2003	Amy CAMPION	Assistant Brand Manager Cadbury Schweppes	Annexure A	Campion

Ground 1 - Section 44, Deceptive Similarity

1. To establish the s44 ground, the opponent must establish all of the following:

   ¨   At the priority date

   ¨   there was a substantially identical or deceptively similar trade mark application or registration

   ¨   in respect of similar goods or closely related services

   ¨   in the name of a person other than the applicant.

2. The opponent cited the following trade marks:

Mark	No	Priority Date	Class/Goods
SPRING VALLEY	133803	24.09.1957	Class 32: Fruit juices and carbonated beverages
SPRING VALLEY	541924	12.09.1990	Class 29: Milk, milk beverages (including flavoured milk) and milk products
SPRING VALLEY	541925	12.09.1990	Class 30: Coffee, artificial coffee, tea, cocoa, chocolate; chocolate-  based beverages, cocoa-based beverages, coffee-based  beverages; chocolate beverages with milk, cocoa beverages  with milk, coffee beverages with milk; flavourings (other  than essential oils) for beverages, including coffee  flavourings
SPRING VALLEY	541926	12.09.1990	Class 32: Beers; mineral and aerated waters and other non-alcoholic  drinks; fruit drinks and fruit juices; syrups and other  preparations for making beverages and all other goods  included in class no. 32
SPRING VALLEY	541927	12.09.1990	Class 33: Alcoholic beverages (except beer) and all other goods included in class no. 33

1. Counsel for the applicant objected to these registrations being used to support this ground of opposition as they were not particularised in the Notice of Opposition nor in evidence.  However, I am not bound by rules of evidence and I am entitled to inform myself in any way I reasonably believe to be appropriate: r21.15(8) Trade Mark Regulations.  The registrations, for the same words, in the name of the opponent are on the Register and readily accessible.  The existence of these registrations would come as no surprise to the applicant and I propose to allow the opponent to rely upon them.

2. It is consequently clear that at the priority date there were identical registrations in the name of a person other than the applicant.  The real issue here is whether or not the registrations are in respect of “similar goods”.

3. “Similar goods” are defined in s14 of the Act as being the same or of the same description as the other goods. The tests for determining goods of the same description are well known, and are not in dispute.

4. The opponent contended that its goods were “functional foods” that could, and did, encompass goods that are naturally high in, or are commonly fortified with, vitamins and minerals.  The nature and characteristics of the goods were often blurred, the respective goods were often consumed for the same purpose, were often sold in the same areas of health food stores and supermarkets.

5. The applicant argued that the goods were fundamentally different substances, were consumed for different purposes, were in a different supply chain, and were ordinarily sold in different outlets, or in different parts of supermarkets.  Counsel submitted that the fact that a product may contain another in its mix (either naturally or by addition) does not make one product similar to another.  He cited Leroy SA v Regal Grange Pty Ltd (2001) 51 IPR 199, where grapes and wines were found not to be relevantly closely related.

6. I agree with counsel for the applicant that the fact that a product may contain another in its mix does not make such products similar to each other.  This was the case even where component goods are a necessary part of the finished goods.  I note also that in Spillers Ltd Appn (1953) 70 RPC51, flour was held not to be of the same description as bread.

7. I am not satisfied that the goods are similar.  I find this ground of opposition is not established.

   Ground 2: s60 Reputation

8. To satisfy section 60, the opponent has the burden of establishing the following elements:

   ¨   a pre-existing trade mark;

   ¨   substantial identity or deceptive similarity between the applied for trade mark and the pre-existing trade mark;

   ¨   the acquisition of a reputation in Australia by the pre-existing trade mark; and

   ¨   a likelihood that, because of that reputation, use of the applied for trade mark would be likely to deceive or cause confusion.

9. As discussed in the previous ground, there are clearly pre-existing identical trade marks, although counsel for the applicant contended that the opponents marks were in fact composite device and word marks.  Although the opponent does in fact use labels on its goods with both the words spring valley and various fruit devices, I am of the opinion that the registered word mark is that which consumers would take into account.  However, the actual manner of use of the trade mark will be relevant to other aspects of consideration of this ground.

10. The next question in respect of the section 60 ground, however, is whether the opponent has shown a sufficient reputation in its trade mark to satisfy the requirements of subsection 60 (b), such that the reputation is wide enough that deception and confusion is likely.

11. The opponent submitted that it is not necessary to prove reputation by direct evidence of consumer appreciation; it is commonplace to infer reputation from a high volume of sales, together with substantial advertising and other promotions, citing McCormick & Company v McCormick [2000] FCA 1335, at paragraph 86.

12. The opponent referred to the Vernon declaration as showing that the opponent, or its predecessor in title, has used its mark continuously since 1955 and that it has been used prominently and extensively labels, packaging, promotional materials and advertising.  Vernon states that there were sales in the amounts of $27.6 to 32.5 million in the years 1999 to 2001.  Further, it is declared that the goods are the premier single serve fruit juice in Australia with a 20% market share and being sold in most major supermarkets, convenience stores and petrol stations.

13. The opponent also referred to the Chequer declaration, which gave details of a market survey conducted at three suburban Melbourne supermarkets.  The survey indicated that of shoppers who bought or took vitamins or minerals 99% associated spring valley with a beverage product or beverage trader and 60% thought that a dummy vitamin product bearing the words spring valley was sold by the same company that sold spring valley beverages.

14. The applicant submitted that there is no evidence of what the opponent’s mark was at the priority date, indeed that all the evidence post-dated the priority date.  Additionally, because of the assignment of the mark to the opponent a year after the priority date, it would unsatisfactory to assume that any evidence in relation to the current proprietor would be relevant to the operations of the proprietor at the priority date.

15. Having carefully considered the opponent’s evidence and submissions, it seems to me that the evidence supports the proposition that the current proprietor of the registered spring valley marks are selling substantially the same goods with the same mark as its various predecessors in title.

16. I am satisfied that the opponent’s evidence clearly establishes that the opponent has, as at the priority date, acquired a reputation in Australia.  I am also satisfied that I can infer from the survey evidence and the evidence of sales and marketing that the reputation would be amongst a significant section of the public.

17. I am also satisfied that there is a real and tangible likelihood that use of the applicant’s mark would deceive or cause confusion.  The source of the deception or confusion is obvious - fruit drinks are actively promoted as being a source of vitamins and are widely perceived as being such by the public.  It would appear natural that the public would infer a connection between fruit-juices promoted as containing vitamins and the vitamins themselves when they are sold under the same well-known trade mark.

18. I find that this ground of opposition has been established.

    Ground 3: s43 Connotation

19. Section 43 provides that registration may be refused if, because of some connotation that the trade mark (or constituent part of it) has, the use of the trade mark is likely to deceive or cause confusion.

20. It has been confirmed in Winton Shire Council v Lomas (2002) 56 IPR 72 that this ground is directed to the mark itself, and not to any deception or confusion caused by the reputation in Australia of some other trade mark. That aspect is dealt with under s60.

21. In this case, the evidence and submissions were effectively directed to a comparison of the opposing marks with reference to the reputation of those of the opponent. I am not satisfied that this ground of opposition is established.

    Ground 4: s42(b) - Contrary to Law

22. Following the decision of Madgwick J in Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, the Registrar is obliged, when assessing whether use would be contrary to law under s.42(b), to take into account the operation of laws and legislation other than the Trade Marks Act 1995. Here, the opponent alleges that use of the trade mark would contravene ss.52 and 53 of the Trade Practices Act 1975 (TPA) on the basis that use would lead consumers into thinking that the applicant’s goods were in some way connected with the opponent.

23. In the Advantage Rent-A-Car case, Madgwick J confirmed that the test to be satisfied was that use would, rather than could, be contrary to law.  Therefore, I am to determine, on the balance of probabilities, and on the basis of a hypothetical case which takes into account all the evidence and submissions before me, whether use of the applied-for trade mark on clothing would cause, or be likely to cause consumers to be misled or deceived.  The relevant standard to be applied is that there must be a "real or not remote chance or possibility" of a reasonably significant number of people being misled or deceived: see for instance Equity Access Pty Limited v Westpac Banking Corporation (1989) 16 IPR 431

24. In relation to ss.52 and 53 for the reasons I have already provided pursuant to s 60, I am satisfied that consumers would be deceived or confused. For present purposes, the deceive or confuse test is sufficiently similar to the mislead or deceive test laid down in the TPA. On this basis, I am satisfied that use of the applied-for trade mark would contravene ss.52 or 53 of the TPA.

    Decision and Costs

25. Pursuant to s55 of the Act, I refuse to register the mark.

26. Both parties sought their costs. I see no reason why costs should not follow the general rule that costs are usually awarded against the unsuccessful party.  I award costs against the applicant and direct that the applicant pay the costs of the opponent in accordance with the Official Scale (Schedule 8 of the Trade Marks Regulations 1995).

    Jock McDonagh
    Hearing Officer
    Trade Marks Hearings
    28 January 2004