Calvin Klein Trademark Trust v Graf Group Pty Ltd

[2000] ATMO 15

TRADE MARKS ACT 1995

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

Re:Opposition by Calvin Klein Trademark Trust to registration of trade mark application number 759026 in the name of Graf Group Pty. Ltd. for the trade mark CK VODKA and device

Background

This matter concerns trade mark application number 759026 which was filed on 6 April 1998 in the name of Graf Group Pty Ltd (the applicant).  The applicant applied to register the mark in respect of "alcohol spirits being vodka and Polish vodka" in class 33.  The mark is shown below

 

After examination of the application the mark was accepted, its acceptance being advertised in the Australian Official Journal of Trade Marks of 30 July 1998.  On 29 October 1998, Calvin Klein Trademark Trust (the opponent) filed a notice of opposition to registration of the applicant's mark.  The notice of opposition sets out twelve grounds of opposition, but, at the hearing, the opponent selected only the grounds based on sections 60, 58 and 41 and the supporting evidence. 

The service and filing of the evidence by the respective parties was completed on 28 July 1999.  The opponent requested a hearing on the matter, which was held in Canberra.  Ms Margaret Ryan of Phillips Ormonde & Fitzpatrick, patent and trade mark attorneys of Melbourne, appeared for the opponent.  Mr Stephen Booth of Coleman & Greig, solicitors and notaries of Parramatta, represented the applicant by telephone. 

The evidence
The evidence in support consists of three statutory declarations with exhibits.  The first of these is made by Deirdre Miles-Graeter, assistant secretary and vice president corporate affairs of Calvin Klein, Inc., who handles the opponent's trade mark matters pursuant to a power of attorney.  In the declaration, she gives details of the history of the Calvin Klein group of companies, explains their interrelationships and states how they operate.  The declarant recounts the success of that group and the extension of use of its marks - CALVIN KLEIN, the initials CK and CK CALVIN KLEIN - on a wide range of goods. 

Ms Miles-Graeter states further that, having regard to the world-wide media and public attention, as well as judicial decisions, Mr Calvin Klein is a well-known and famous person and so are the CALVIN KLEIN and related trade marks.  She attaches examples of published matter and decisions in support.  The initials CK, she says, are an obvious derivative from the name Calvin Klein.  In an exhibit are listed various countries where the opponent's marks CALVIN KLEIN, CK and CK CALVIN KLEIN are registered, or are awaiting registration for goods in a number of classes.  A further exhibit contains a list of publications which are said to have contained advertisements of the marks over many years.  World-wide sales figures representing trade under the marks and those for advertising and promotion are listed in the body of the declaration.  In an exhibit to the declaration are displayed samples of the marks in use.  Ms Miles-Graeter also provides details on use of the opponent's marks in Australia, which commenced in relation to women's apparel and has expanded to many other products.  She states that the products carrying these marks are sometimes sold directly to the Australian retailers by Calvin Klein Industries or its related companies, but there are also distribution agreements with various Australian companies.  Sales figures in Australia since 1993, in respect of the products under the marks, are included in the body of the declaration.  Those figures apparently do not take into account the sales made directly by Calvin Klein Inc. but are limited to the sales by the licensees. 

The second statutory declaration is by John Andrew Waters, a member of Phillips Ormonde & Fitzpatrick, the firm acting for the opponent.  He has caused a search to be conducted of the Trade Marks Office records of marks containing the letters CK, regardless of classification.  He annexes the results of that search to his declaration, identifying the marks that consist of or contain the initials CK. 

Clyde William Davenport, who has made the remaining declaration in the evidence in support, is the managing director of Davenport Industries Pty Ltd and a director of Body Art Australia Pty Ltd and Tamstead Pty Ltd.  He says that he has been actively involved in the Australian fashion industry for some 14 years.  His companies are involved in the distribution and sale of different types of clothing products carrying the marks owned by Mr Klein or his associated companies, including the marks CALVIN KLEIN, CK CALVIN KLEIN and CK "logo".  The company, Body Art Australia Pty Ltd, according to Mr Davenport, has distributed for sale the underwear and socks carrying the Calvin Klein marks through the major department stores and specialist boutiques, and has done so for a number of years.  Tamstead Pty Ltd, authorised by CK Jeanswear (Asia) Limited, has distributed jeans and related wearing apparel in Australia.  Besides these companies, Mr Davenport says, clothing, footwear and other products bearing one or more of the Calvin Klein marks are sold by others, such as the major department stores David Jones and Myer.  An exhibit contains details of advertising expenditure in Australia by Body Art Australia Pty Ltd for underwear and socks in respect of the Calvin Klein trade marks.  

The evidence in answer comprises a leading statutory declarations with three supporting declarations.  Frank Graf is a director of the applicant company, which has been involved in the importation and wholesale of vodka and other spirits from Eastern Europe.  The company imported 20 cases of vodka under the applicant's mark from Lancut Distillery in Poland.  He states that those cases were distributed for trial to five outlets of Theo's Liquor Stores in New South Wales.  Following successful sales in those outlets, the applicant intended to import larger quantities of the applicant's vodka.  He had been informed by a person at the Lancut Distillery that the letters CK in the applicant's mark referred to "Crown King", the Austro-Hungarian Emperor Franz Josef II, whose centenary had been marked in 1995 by producing vodka under the label.

The other applicant's declarants, Garth Oldfield, Ian Cowley and Jack Stout, are the managers of Theo Liquor Stores in three suburbs of Sydney.  They attest to the fact that, since November 1998, when the applicant's vodka had been sold in their stores and they had been serving customers for most part of the day, no customer had ever expressed any concerns or indicated any confusion to the effect the letters CK on the vodka label had any connection with Calvin Klein. 

The evidence in reply consists of one statutory declaration made by Jan A. Bucyk, a patent attorney in Poland.  His firm had been asked by Deirdre Miles-Graeter of Calvin Klein, Inc. to advise in relation to the existence of the "CK VODKA" mark in Poland and on any meaning the letters CK may have in that country.  He annexes to his declaration details of a registered mark similar to the applicant's and of an application for a mark CK VODKA, both in Poland.  According to Mr Bucyk, two meanings are attributed to the initials CK in Poland: 1) the meaning closely corresponding to that explained by Mr Graf, and 2) the initials appearing on a heraldic coat of arms of a large town of Kielce. 

At the hearing, Ms Ryan handed to me evidence material from the opponent to which I will refer below.

Submissions, discussions and analysis
Before commencing her submissions on the substantive issues, Ms Ryan tendered a copy of a statutory declaration executed by herself, with two exhibits, which had been served on the applicant on the day before the hearing.  The first exhibit contains search results from the official database in the Trade Marks Office of marks in classes 32 and 33 which contain a crown device.  Ms Ryan had caused a search of the Internet for the Lancut Distillery and has attached, as the second exhibit, a print out of selected pages of web site of that entity.  She has noted, she states, that the web site advertises and displays a bottle in a form substantially identical or deceptively similar to the opposed trade mark, with the particulars CK VODKA.

In response to the evidence contained in Ms Ryan's declaration, the applicant had prepared a statutory declaration by Frank Graf, a copy of which  had been transmitted to the Trade Marks Office by facsimile before the hearing.  

In support of tendering the additional material, Ms Ryan said that the exhibits annexed to the declaration were evidence matters to which the Registrar had access, i.e. the searches were based on the records held by the Trade Marks Office and the other material had been obtained from the Internet.  The evidence went to the question of ownership and distinctiveness of the trade mark, both matters having been raised in the notice of opposition, she said.  The pages from the web site were, Ms Ryan explained, a reply in relation to a matter concerning ownership that had emerged from Mr Graf's statutory declaration in the evidence in answer, but had not been sufficiently explained by the declarant.

Mr Booth expressed no objection to the filing of the database extracts of the marks.  As to the other evidence however, he said that it was of major concern to the applicant because of the evidence arriving at a very late stage; if that evidence had been made available earlier, the applicant might have been able to obtain the necessary information from the Lancut Distillery so as to furnish an adequate response.  If, indeed, a consent to the mark's use in Australia was required from the owner of the mark, then the applicant as importer of the product under the mark would have sought an opportunity to obtain it from the owner, Mr Booth said. 

I reminded both parties of reg.5.15, whereby applications may be made by the parties to seek permission to serve further evidence.  Given that I did not have an opportunity to consider the evidence before the hearing, I said I needed time to have regard to whether the evidence would be admissible and that the applicant had a right to formally reply to that evidence, should it be admitted.  However, Ms Ryan proposed that, in order to draw this matter to a close, the opponent would not be relying on the second exhibit to her declaration - the material extracted from the web site - and therefore the applicant's statutory declaration made by Mr Graf responding to that exhibit should also be excluded from the evidence.  Mr Booth agreed to this proposal.  The hearing proceeded on the understanding that those materials were not to constitute part of the evidence for the purpose of the current opposition proceedings. 

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

Ms Ryan submitted that the opponent had a number of registered marks which comprise or contain the common feature - the initials CK standing for Calvin Klein.  Concerning the question of whether the marks were substantially identical or deceptively similar, Ms Ryan said the relevant principles were to be found in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407, Pianotist Co's Appn (1906) 23 RPC 774, Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641, Rysta Ltd's Appn (1943) 60 RPC 87 and Woolworths Ltd v Registrar of Trade Marks (1999) 42 IPR 615.  She then proceeded to compare the mark of the opponent's registration 703282, which comprises the initials CK and covers a wide range of goods in different classes, with the mark of the present application, coming to the conclusion that the only distinctive aspect in the latter mark were those same initials.  Relying on the finding in Woolworths v Registrar, that it was permissible to take into account the reputation associated with one of the marks - the name "Woolworths" in the mark WOOLWORTHS METRO - Ms Ryan submitted that the initials CK had a notorious familiarity to consumers.  In the applicant's mark, precisely those initials were the predominant and memorable feature rather than anything else included in the mark.

The opponent had provided ample evidence to establish that the initials CK were a well-known trade mark, Ms Ryan said, directing my attention to the report Recommended Changes to the Australian Trade Marks Legislation of July 1992, where it had been advocated that a provision be made for the protection of well-known marks - whether registered or not.  She pointed to copies of the various material exhibited in the opponent's evidence on the fame of Mr Calvin Klein's name and how highly the trade marks associated with him were ranked in the fashion industry.  Ms Ryan also noted that various legal proceedings had been launched in parts of the word to protect the opponent's marks, including an Indian case where reputation in the name Calvin Klein and the initials CK had been found sufficient for an action of passing off, despite there having been no sales of the opponent's products.  Referring to the details of the sales of the products under the marks and the corresponding advertising throughout the world, Ms Ryan said that the world-wide reputation was relevant to the reputation in Australia, because of the increasing awareness of trade marks gained by Australians travelling overseas and the world-wide circulation of the publications originating in the United States of America.  In support of this proposition, she cited Anheuser-Busch Inc v Castlebrae Pty Ltd (1991) 23 IPR 54 at 58 and Photo Disc Inc v Gibson and Another (1998) 42 IPR 473 at 479. However, this spill-over reputation, was only supplementary to the very substantial reputation of the opponent's marks existing in Australia, Ms Ryan submitted, by referring to the detailed information contained in Ms Miles-Graeter's and Mr Davenport's declarations, and adding that the wide reputation of the Calvin Klein's trade marks had been accepted in an unpublished Trade Marks Office decision of 29 June 1999 - Calvin Klein Trademark Trust v Calvin Corporation Limited. 

Turning to the question of the likelihood of deception or confusion between the marks under consideration, Ms Ryan referred to the principles in Woolworths v Registrar, supra, which rely upon those set out in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. Reiterating that the marks CALVIN KLEIN, CK CALVIN KLEIN and the initials CK have been used throughout the world, including Australia, on a very wide range of consumer items, she contended that, on seeing the initials on other consumer goods such as alcohol or vodka in particular, they would associate those goods with the famous Calvin Klein organisation. She said that consumers would be familiar with the practice of brand extensions, as discussed in Nike International Ltd v United Pharmaceutical Industries (Aust) Pty Ltd (1996) 35 IPR 385 at 393-394. In this connection, Ms Ryan also mentioned Anheuser-Busch v Castlebrae, supra, where the owner had developed a character "Spuds MacKenzie" to advertise beer.  There it was noted that the image was also used on clothing, and therefore a link might well be perceived between alcohol and clothing, she said.  Ms Ryan submitted further that perfumes contain alcohol and that perfumes and alcohol, which she characterised as stylish products, are sold in the Duty Free stores.  Noting a reference in the applicant's evidence that the premium vodka sold for $80.00 a bottle (about $39 retail), she said such a product was conducive to creating exactly the sort of image that would be well suited to a brand extension of the Calvin Klein organisation.  In this regard, in NBA Properties, Inc v Kris John Gaunt (1999) 44 IPR 225, the hearing officer had recognised that character merchandising was a common and prominent feature of the commercial world. Although the opponent's marks had not been used in respect of food items, account should be taken of the hearing officer's words in that case that, "in terms of today's commercial reality, therefore, I consider that if a pizza product carries a trade mark signifying a well known sports team, the public would expect the pizza dealer to be using that mark by licence or other authorised right". Licensing practices and public's awareness, she said, were relevant factors for consideration in determining the likelihood of deception or confusion of trade marks.

Responding to these submissions, Mr Booth said, on the applicant's behalf, that the marks in question were quite distinct in the context in which they were likely to be used, and that any likelihood of confusion was so small that it ought to be disregarded.  In stressing that, when a comparison is made, one should look at the whole mark, Mr Booth submitted that, in view of the particular style of the letters CK in the opponent's marks, which were rendered alike in the marks with or without the words CALVIN KLEIN, the members of the purchasing public would identify the marks as the property of the opponent.  In the applicant's mark, on the other hand, the letters CK were not pictorially similar and the mark contained other elements besides the letters.  Commenting on registration 703282, Mr Booth said that, despite the wide coverage of the goods of that registration, the goods did not go anywhere near alcoholic beverages, nor did they include any items in the nature of food or drink.  There being no reputation by the opponent in respect of beverages, nor even any expressed intention that it might involve itself in the beverage trade, the applicant could not envisage that the public would associate products under the subject mark with the opponent.  Mr Booth referred to the statements of the three declarants in the applicant's evidence who had said that it had not occurred to them that there might be any such connection, even though one of the declarants actually wore Calvin Klein branded clothing.  Furthermore, since the applicant's product under the mark was new and had been only recently introduced to those declarants, they were in an ideal position to determine whether there was a connection between the new product and the products of which they had been aware for some time.  Nonetheless, the question of any likelihood of their confusing the marks had not arisen in their minds at all until the issue had been put by the opponent, Mr Booth said.  Contrary to the opponent's assertions as to confusion between the marks, however, it had failed to provide any evidence to substantiate these claims.  

Mr Booth said that there was no attempt on the applicant's part to imitate the opponent's marks by reproducing visually similar letters.  It was also apparent that the opponent did not have a monopoly in the letters and that its reputation was not sufficiently broad to say that the use of its CK mark gave rise to a reasonable likelihood of deception or confusion with the applicant's mark, or even a speculation amongst the consumers as to the source of the applicant's product.  Mr Booth conceded that members of the public were familiar with the concept of brand extensions, but he did not accept that it had relevance in the present case.  While acknowledging that the applicant's vodka and the opponent's perfumes might be sold in the Duty Free stores, in view of the dissimilarity between the marks and the respective goods, that factor was to be discounted, Mr Booth said, submitting that those goods would not be found in close proximity in other locations such as normal retail outlets. 

The relevant section 60 reads:

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. 

The first step in deciding the issue concerning section 60, is to determine whether I agree with the opponent's submissions that the applicant's mark is substantially identical with, or deceptively similar to, the opponent's mark of the prior registration 703282, the representation of which is shown here:

 

Looking at the marks in question, when placed side by side, it is obvious that the addition of the bottle device with the tag, the crown device and the word "vodka" to the letters CK in the applicant's mark renders it sufficiently different from the above opponent's mark so as to dismiss any suggestion that the marks might be substantially identical.  However, consideration should be given to the situations when the marks are not seen in close proximity, but, as enunciated in Woollen Mills v Walton, supra, at 658:

An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought.  The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same.  The effect of spoken description must be considered.  If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part.  The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. 

It goes without saying that, in respect of goods like beverages, no distinctiveness can be attributed to a bottle device.  The fact that crowns feature very frequently in the labels for beverages, including those for spirits, is evidenced by the exhibit to Ms Ryan's declaration and therefore, to a certain degree, such devices would be discounted by the majority of the purchasers as a distinguishing feature between the marks.  There remain, then. the clearly recognizable letters CK, which are included in the applicant's mark and are the sole component of the opponent's mark.  Visually, differences may be discerned between the way the letters are represented in these marks, i.e. the ordinary upper case letters of equal size in the applicant's mark as opposed to the small letter C in a raised position on the left hand side of the letter K in the opponent's mark, otherwise there is nothing unique in the style of the letters themselves.  These differences between the marks become insignificant, of course, on occasions when the marks are to be identified in a verbal form, i.e. the marks would be known and identified simply by the letters CK.   In addition, I agree with the view advanced by the opponent that allowances should be made for the so called "doctrine of imperfect recollection" of the marks.  Whilst it is recognized that a whole mark must be considered for the purposes of comparison, in the present case, the opposed mark contains one essential, or distinguishing element, and that precise element forms the mark of registration 703282.  The fact that the letters CK in the applicant's mark may bear a special significance in Poland, would be lost on the majority of the Australian consumers.  I consider therefore the marks to be deceptively similar. 

Having decided so, I turn to the consideration whether, in view of the reputation accumulated by the opponent's trade marks in Australia before 6 April 1998, the date of the present application, the mark the subject of this application, if used in a normal or fair manner in respect of any goods stated in the application, will be reasonably likely to cause deception and confusion amongst a substantial number of persons - Smith Hayden & Co Ltd's Appn (1946) 63 RPC 97. In this regard, it is to be remembered that there needs to be a real tangible danger of deception or confusion, as per Southern Cross v Toowoomba Foundry, supra.  

According to the opponent's evidence, the CALVIN KLEIN trade mark was introduced in Australia in 1982 in relation ladies' clothing.  Since then other goods: clothing for men, fashion accessories such as handbags, footwear, jewellery, kitchen utensils and printed matter have been sold under the marks CALVIN KLEIN, CK and CK CALVIN KLEIN.  The marks have also been used in respect of sunglasses.  It cannot be denied that the sales in Australia under the three marks for the five years before the present application was filed have been enormous, even taking into account the fact that the figures exclude the sales made directly by Calvin Klein Inc.  However, the opponent's evidence fails to show what proportion of those sales would be attributable to sales of the goods bearing the mark CK solus or the mark CK CALVIN KLEIN.  Similarly, the opponent has not provided information as to exactly what goods the turnover figures represent.  No corresponding amounts have been provided for advertising of the goods under the marks; nonetheless, judging from the figures given by Mr Davenport, which represent a limited range of goods advertised by one of the distributors, it would appear that the expenditure could be substantial.  To demonstrate the nature of advertising carried out in Australia, the opponent essentially relies on the titles of numerous international and eleven Australian publications.  Instead of exhibiting actual samples of any of the advertisements inserted in these publications, the opponent has concentrated on various articles relating to the fame of Mr Calvin Klein without providing information as to the availability of the articles in Australia.  The WWD 1997 survey, conducted in the United States of America, identifies Mr Klein as one of the world's leading fashion designers with a huge reputation in the apparel and accessories market, characterising his business as:

Last year, Klein raked in $120 million in licensing income, which has nearly tripled since 1994.  The key contributors were three explosive businesses: fragrance, with $700 million in wholesale volume last year, jeans $467 million, and underwear, $255 million.  And the designer continues to extend his brand.  This year, he introduced CK Calvin Klein shoes and bags and Calvin Klein Collection and CK watches.  The rollout of international freestanding stores is accelerating, and the goal is 100 CK Calvin Klein stores in Europe and the Mideast by 2001. 

The world-wide reputation that attaches to the three marks is adequately supported by the staggering sales and advertising figures covering the period from 1973 to 1997.  These amounts reach billions of United States dollars.  The extent to which the opponent operates internationally under its marks is further evidenced by the many registrations of the marks in different parts throughout the world. 

From the available evidence, it is obvious that the opponent's marks containing or comprising the letters CK have been exposed to members of the Australian purchasing public for a considerable time and have gained a noteworthy reputation.  It is also indisputable that the opponent has a very firm and impressive international standing.  Given the large numbers of Australians travelling overseas, including to the home country of the marks, the United States of America, it is reasonable to assume that the wide renown of the opponent's marks has left an impact on many, thus augmenting the already existing considerable reputation in Australia, as has been submitted by Ms Ryan. 

The opponent's overseas registrations of its marks, as stated in Ms Miles-Graeter's declaration, cover goods in different classes of the International classification of goods, being classes 3, 8, 9, 14, 16, 18, 20, 21, 24, 25 and others, which suggests coverage of a wide range of goods.  The fact that the registrations in Australia of the marks CK and CK CALVIN KLEIN similarly embrace a very extensive and diverse range of goods is shown in the said declarant's exhibits.  This is amply illustrated by registration 703282 for the mark CK which encompasses goods and services in thirteen classes.  Throughout the declaration, however, references are made to use of the marks primarily in respect of goods such as women's and men's wearing apparel and accessories, hosiery, swimwear, shoes, sunglasses and optic wear, handbags, watches, fragrances and related fashion items, sewing patterns and home furnishings.  Mr Davenport, who has extensive knowledge of distribution of the opponent's products under the marks in Australia, mentions items of clothing, footwear, fragrances and sunglasses.  From Ms Miles-Graeter's statements it is also apparent that the estimated turnover figures set out in the declaration were derived from the sales of the goods mentioned by her.  This evidence leads one to conclude that the reputation in the opponent's marks under consideration mainly resides in respect of those particular goods.   

It has been submitted that, having been accustomed to seeing the opponent's marks on a wide range of merchandise, in view of the practice of brand extensions by owners of the marks and the fact that the Calvin Klein organisation is known for licensing of the products, persons would be inclined to associate the letters CK on the applicant's mark with those of the opponent.  For any person to make such an assumption, however, there would need to be a perception of a natural extension, in the trade, from the sort of goods for which the opponent's marks in question have gained their renown to a new product released by another manufacturer.  In the absence of any evidence to the contrary, it seems to me that the categories of goods for which the opponent's marks have a reputation, in broad terms, are: fashion clothing, fashion accessories and homewares.  Items falling in these categories would, more likely, be seen to be connected with a famous couturier such as Calvin Klein in the sense the consumers associate the products of this nature, in the realm of fashion, with the well-known marks, for example: CHANEL, CHRISTIAN DIOR, GUCCI, PIERRE CARDIN, YVES SAINT LAURENT or GIORGIO ARMANI, to mention only a few.  From my own knowledge and experience, the names that have achieved recognition in the fashion industry are not typically known to extend to alcoholic beverages.  Nor did I find any evidence that the pattern utilized by the Calvin Klein organisation in licensing could so radically change as to create uncertainty in my mind in that regard.  My position is also reinforced by the absence of any registrations of the opponent's marks in respect of beverages of any kind. 

Ms Ryan also directed my attention to the significance of character merchandising, in relation to a link that could exist between goods of a different nature under deceptively similar mark, i.e. goods which, in the minds of the purchasing public, are not normally associated with the same owner's marks.  There does not appear to be any support in the evidence for the inference, if I understood Ms Ryan's contention correctly, that the opponent has established such a connection between the reputation in the opponent's marks and the type of goods now sought to be registered under the applicant's mark.  Having regard to these factors, the overwhelming reputation of the opponent's marks notwithstanding, the existence of the applicant's mark in respect of "alcoholic spirits being vodka and Polish vodka" negates the likelihood that serious doubts would be raised in the minds of a sizeable number of consumers as to whether the products were those of the opponent, or that there was some connection between the applicant and the opponent. 

Having found that the subject mark is not likely to cause deception or confusion despite the reputation enjoyed by the opponent's marks in Australia, I dismiss the opposition as it relates to s.60 of the Act.

Whether the applicant is owner of the mark
In submitting that the basic common law condition is that the first person who uses the mark in a country becomes the owner of that mark, Ms Ryan cited Riv-Oland Marble Co (Vic) Pty Ltd v Settef S.p.A. (1987) 10 IPR 402; (1988) 12 IPR 321. In developing the argument that, in the present case, the applicant was an importer of the goods which are produced in Poland by someone other than the applicant, she referred to Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1966) 116 CLR 254 at 271, New Atlas Rubber Co Ltd's Trade Mark (1918) 35 RPC 269 at 275 and European Blair Camera Co's Trade Mark (1896) 13 RPC 600. She said the evidence showed that the mark was registered by another entity in Poland. Ms Ryan then referred to Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corp (1951) 82 CLR 199 at 204 and 205 and Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) 156 CLR 414 at 433-434 and "Thunderbird" Trade Marks 1A IPR 511 on what constitutes use of a mark, and what material would be sufficient to demonstrate that use in Australia.  Ms Ryan pointed out that the right to own the mark could have passed to the present applicant by, for instance, an agreement or acquiescence, but there was no evidence of that being the case here. 

Mr Booth submitted that it was plain from the evidence that the applicant was the first to use the mark in Australia in respect of the designated products.  The applicant imported the product into Australia under the mark and traded in the product.  He noted that the registration in Poland bore a later date than the date of filing the present application.  Further, he said, Lancut Distillery (hereafter "Lancut"), the producer of the Polish vodka, had not opposed registration of the mark and there was no dispute between it and the applicant in respect of registration of the mark in Australia.  Mr Booth did concede that the evidence was lacking in showing any agreement between the Lancut and the applicant, and that there was no consent from that entity for the applicant to register the mark in Australia.  However, he pointed to contact having been made with a person at Lancut in relation to the mark, which is mentioned by Mr Graf in his declaration.  

Section 58 of the Act provides that:

58. The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark. 

Pursuant to s.27, a person who professes to be an owner can file an application for registration of a mark:

227.(1)      A person may apply for the registration of a trade mark in respect of goods and/or services if:

(a)the person claims to be the owner of the trade mark; and

(b)one of the following applies:

(i)the person is using or intends to use the trade mark in relation to the goods and/or services;

(ii)the person has authorised or intends to authorise another person to use the trade mark in relation to the goods and/or services;

(iii)the person intends to assign the trade mark to a body corporate that is about to be constituted with a view to the use by the body corporate of the trade mark in relation to the goods and/or services.

Under the current Trade Marks Act, the term "owner" should be read in the same sense as "the proprietor" in terms of the Trade Marks Act 1955.

It has long been established that ownership depends on a combination of authorship and first use of the mark, as enunciated by Dixon J in Shell Co. (Aust) Ltd v Rohm and Haas Co (1949) 78 CLR 601 at 627:

The basis of a claim to proprietorship in a trade mark so far unused has been found in the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and the applying for registration.

.   
"Authorship", his Honour stated, "involves the origination or first adoption of the word or design as and for a trade mark".  In Aston v Harlee Manufacturing Co (1960) 103 CLR 391, at 399-400, Fullagar J said that the requirement of "authorship" did not mean that the applicant must be the true and first inventor, or claim that it thought of it first, but that an applicant may still be the "author", even though the applicant has "deliberately copied or adopted a mark registered in a foreign country in respect of the same description of goods". If an applicant relies on ownership of a foreign mark for the same description of goods, it must be established that no one else has acquired prior right by use of the mark in Australia. Here it would be useful to refer to the oft cited passage from Re Hicks' Trade Mark (1897) 22 VLR 636, where Holroyd J explained at 640:

In order to substantiate his application to be placed on the Register for this word he must have claimed to be the proprietor, and the word "proprietor" must be taken to mean the person entitled to the exclusive use of the name.  If there is anyone else who would be interfered with by the registration of the word "Empress" in the exercise of a right which such person has already acquired to use the same word in application to the same kind of thing, then Hicks ought not to have been put on the Register for that trade mark.             

From the many High Court cases on this issue, it is clear that, if a foreign mark has not been used in Australia, a person in Australia may acquire right to ownership of that mark, even if use of the mark has been extensive overseas, as per Williams J in Seven Up Co v O.T. Ltd (1947) 75 CLR 203 at 211:

… in the absence of fraud it is not unlawful for a treader to become the registered proprietor under the Trade Marks Act of a mark which has been used, however extensively, by another trader as a mark for similar goods in a foreign country, provided the foreign mark has not been used at all in Australia at the date of the application for registration.

In Australia, right to ownership in a foreign mark may be relied upon by a small amount of use, but that use must create, in the minds of those concerned, an impression that the goods of a particular trader are being offered for sale under the mark. 

The applicant's evidence indicates that the applicant imported 240 bottles of vodka into Australia in September 1998.  The product was purchased from the Lancut Distillery, Poland.  As attested to by three declarants, a large number of the vodka bottles bearing the mark were sold in November and December 1998 by the stores where the product had been distributed for trial sales.

The evidence provided by the opponent reveals a registration in Poland of a similar mark to that of the present applicant's mark, in the name of Euro-Ago Warsaw (Proprietary Limited Company), in respect of "alcoholic beverages" and also a pending application for the mark CK VODKA, in the name of Polmos Distillery in Krakow (Partnership Limited by shares), in respect of "vodka, alcoholic beverages".  There is no evidence, however, that these marks have ever been used in Australia, nor that any person, including Lancut, has sought to challenge the applicant's claim to ownership of the subject mark by opposing its registration.  If the applicant is applying to register the mark in Australia for vodka in the knowledge of the foreign owner of the mark for those same goods, as appears to the case here, it may be a "sharp business practice".  It is not in itself, however, fraudulent or a breach of the law - Re "Yanx" Trade Mark, supra, at 202. 

In view of the foregoing, I find the opponent has failed to upset the applicant's claim to ownership of the opposed mark in terms s.58. 

Mark not capable of distinguishing its goods from other persons 
In relation to this ground, Ms Ryan submitted that the applicant's mark was not capable of distinguishing, because the country of origin of the designated goods was Poland, as specified in the statement of goods.  The marketing exhibited by the applicant, Ms Ryan said, did not show that the mark was imported by the applicant or otherwise associated with the applicant.  In support, she cited Bayer Pharma Pty Ltd v Farbenfabriken Bayer A.G. (1965) 120 CLR 285 and "Karo Step" Trade Mark [1977] RPC 255. In elaborating her argument, she said that alcoholic beverages were traditionally marketed with the mark of the manufacturer, i.e. the name of the distillery, winery or brewery. Without a clear branding on the subject mark, the consumers would be likely to see a trade connection with a distillery in Poland. There was nothing to suggest that the applicant as an importer had selected the vodka, exercised quality control over it, or that it had done anything to indicate a connection in the course of trade between it and the mark. She said the circumstances were not such as existed in Fender Australia Pty  Ltd v Bevk; Fender Australia Pty Ltd v Sullivan (1989) AIPC 90-614, where a distributor had affixed a sticker on guitar cases to indicate that Fender Australia was the registered proprietor of the marks. In that case it had also been responsible for quality control. It was perfectly possible for goodwill in Australia to be developed in a product made overseas, but the applicant had imported only a very small quantity of the product, Ms Ryan submitted. She said that a distributor could take benefit of a trade mark under an assignment as had occurred in the Fender case; however, as there was no question of the opposed mark being assigned to the applicant, the mark could not be capable of distinguishing the applicant's goods. 

Mr Booth responded to these opponent's submissions by saying that the goods were those of Lancut and were placed on the market as such, therefore the matter of distinguishing the goods was not in question.  He said that the reputation, once the subject mark was registered, would be that of the "CK" vodka mark and would inure to the benefit of the applicant and Lancut.

The relevant subsections of s.41 read:

41.(2)         An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.]

(3)     In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons. 

The opponent has criticised the manner in which the applicant's product - vodka - is advertised and marketed on the grounds that the applicant omits to indicate its role as the importer of the product with the result that consumers were likely to associate the product in the trade with Lancut, the producer of the vodka.  It has also been suggested that, in the absence of an assignment of the subject mark from Lancut to the applicant, any goodwill attaching to the mark would go to Lancut, not to the applicant. 

These matters to which the opponent has directed my attention are not within the scope of considerations under the provisions of s.41, which section is essentially tailored for determining whether a mark is adapted to distinguish one person's goods from those of other persons.  Given the opponent's submissions in relation to this section, it appears to me that the opponent's concerns are focussed on the question of ownership of the mark in the event of a dispute between Lancut, as the overseas manufacturer of the product, and the applicant - the importer of its product in Australia.  As such issues cannot be decided in terms of s.41, I have no option but to say the opponent has failed in relation to this ground of opposition. 

Conclusion
I have found that none of the grounds of opposition argued at the hearing have been successful.  The opposition in total is therefore dismissed.  Subject to any appeal against my decision, I direct that the mark of application 759026 proceed to registration. 

Costs
The opponent has sought costs in these proceedings.  However, the applicant being the successful party is entitled to its costs.  I therefore direct that the opponent pay the applicant's costs in these proceedings.  

Vija Zars
Hearing Officer

29 February 2000