Cantarella Bros Pty Ltd v Societe Des Produits Nestle S.A

[2009] ATMO 62

TRADE MARKS ACT 1995

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

Re:Opposition by Cantarella Bros Pty Ltd to registration of trade mark application 1071007(30) - DEVICE - filed in the name of Société des Produits Nestlé S.A.

Delegate:

Debrett Lyons

Representation:

Opponent: John Nicholas SC, instructed by Gilbert & Tobin, Solicitors

Applicant: Margaret Shearer of Banki Haddock Fiora, Solicitors  

Decision:

2009 ATMO 62

Section 52 opposition: sec. 41 established.

Background

1. On 19 August 2005, Société des Produits Nestlé S.A. (‘the applicant’) filed an application to register the trade mark which appears below:

2. The application was examined and accepted for possible registration in class 30 in respect of the following goods:

   Coffee, coffee extracts, coffee-based preparations and beverages; iced coffee; coffee substitutes, extracts of coffee substitutes, preparations and beverages based on coffee substitutes; chicory; tea, tea extracts, tea-based preparations and beverages; iced tea; malt-based preparations; cocoa and cocoa-based preparations and beverages; chocolate, chocolate products, chocolate-based preparations and beverages; confectionery, sweets, candies; sugar; chewing gum; natural sweeteners; bakery products, bread, yeast, pastry; biscuits, cakes, cookies, wafers, toffees, puddings; ice cream, water ices, sherbets, frozen confections, frozen cakes, soft ices, frozen desserts, frozen yoghurts; binding agents for making ice cream and/or water ices and/or sherbets and/or frozen confections and/or frozen cakes and/or soft ices and/or frozen desserts and/or frozen yoghurts

   (‘the designated goods’)

3. The acceptance was under section 41(3) of the Trade Marks Act 1995 (‘the Act’) and subject to the following endorsement which was requested by the applicant:

   The dark background shown in the representation attached to the application form is of indefinite or variable dimension. The rectangular perimeter shown in the representation of the trade mark attached to the application form is for illustrative purposes only.

4. The application was advertised as having been accepted for possible registration in the Australian Official Journal of Trade Marks on 7 September 2006. On 7 December 2006, Cantarella Bros Pty Limited (‘the opponent’) filed a notice of opposition to registration under section 52 of the Act listing most of the grounds of opposition available to an opponent.

5. Both sides served and filed evidence which is referred to herein to the extent necessary.

6. A hearing was convened on 9 July 2009 in Sydney before me, Debrett Lyons, acting as a delegate of the Registrar of Trade Marks.

7. Prior to the hearing the opponent notified the applicant that it would press only one of the ground of opposition listed in the notice of opposition, namely that based on section 41 of the Act. That ground of opposition read: “The Trade Mark is not capable of distinguishing the Applicant’s goods from the goods or services of other persons”.

8. At the hearing, the applicant was represented by Ms Margaret Shearer, Solicitor and Trade Mark Attorney and the opponent was represented by Mr John Nicholas, Senior Counsel.

Discussion

1. The opponent bears the onus of establishing its ground of opposition on the balance of probabilities (following Gyles, J in Pfizer Products Inc v Karam (2006) 70 IPR 599).

2. The parties were in accord as to the way in which section 41 operates, best explained by Branson J in Blount Inc v Registrar of Trade Marks [1998] 40 IPR 498 where her Honour said:

   Subsections (3) to (6) of s 41 of the Act are designed to control the process by which the Registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered ("the designated goods or services"). If the trade mark is not so capable, the application for its registration must be rejected (s 41(2)). Subsection (3) requires the Registrar first to "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". Having taken such matter into account, it is theoretically open to the Registrar to conclude:

   (a) that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or

   (b) that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or

   (c) that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the designated goods or services.

   The structure of s 41 of the Act dictates that if the Registrar reaches conclusion (a) above, then he or she will decide the question whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons by reaching the answer that it is so capable by reason of its inherent adaptability to distinguish (s 41(2) and (3)). The Registrar will, in such circumstances, be required, by reason of the terms of s 33(1) of the Act, to accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application.

   If the Registrar reaches conclusion (b) or (c) above, he or she is, within the meaning of s 41(4) "unable to decide the question". That is, he or she is unable, simply by taking into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services, to answer the question whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons.

   If the Registrar reaches conclusion (b) above, then the provisions of paragraphs (a) and (b) of s 41(6) are brought into operation. If the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the Registrar will not reject the application pursuant to s 41(2). The Registrar will, in such circumstances, accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application (s 33(1)). If the applicant fails to establish that because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the Registrar must reject the application pursuant to s 41(2).

   If the Registrar reaches conclusion (c) above, then the provisions of paragraphs (a), (b) and (c) of s 41(5) are brought into operation. If the Registrar, having considered the combined effect of the matters listed in subparagraphs (i), (ii) and (iii) of s 41(5)(a), is satisfied that the trade mark does or will distinguish the designated goods or services as being those of the applicant, he or she will not reject the application pursuant to s 41(2). The Registrar will, in such circumstances, accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application (s 33(1)). If the Registrar, having considered the combined effect of the matter listed in subparagraphs (i), (ii) and (iii) of s 41(5), is not satisfied that the trade mark does or will distinguish the designated goods as being those of the applicant, the Registrar must reject the application (s 41(2)).

Section 41(3)

1. The starting point is thus section 41(3) and an assessment of the extent to which the trade mark is inherently adapted to distinguish the designated goods from the goods of other persons.

2. For the applicant, Ms. Shearer submitted that:

   the trade mark comprises a highly stylised image of the rim of a cup of coffee with a cloud of crema suspended within, the whole of which floats on a dark background of infinite dimensions. Only the rim of the cup exists – there is no cup attached to it. Although the stylised cloud of crema suspended within this rim suggests that the imaginary cup is full, there is no cup body attached to the rim that would hold any contents. 

   The fact that the rim of the cup fades out into darkness creates an allusion to a halo. The effect of the “halo” shape floating on the dark background gives it a celestial appearance, like the rings of Saturn.

3. Ms. Shearer continued:

   The evidence filed on behalf of Nestlé shows that the trade mark was created as the result of a complicated and lengthy design process. It is our submission that the HALO device trade mark is sufficiently striking and unusual to be found to be inherently adapted to distinguish the goods covered by the Application, and is therefore prima facie registrable under section 41(3).

4. Mr. Nicholas for the opponent stated that the trade mark is an unmistakable image of a cup of coffee and that, as images of cups of coffee go, there is nothing particularly distinctive or unusual about this one.   He described suggestions that it brought to mind flying saucers, halos or heavenly bodies as being far fetched.

5. Mr. Nicholas pointed out that the time and energy that would seem to have been spent in the selection of the trade mark did not of itself mean that the trade mark was in fact distinctive.  Nor, having regard to the great many images of coffee and coffee cups shown by the evidence to be in general use in relation to the designated goods, would it follow that the trade mark was inherently adapted to distinguish the designated goods from the goods of other persons.

6. Finally, Mr. Nicholas asked me to note that the opponent’s evidence also showed the concern of some declarants that, were the trade mark to be registered, there would be uncertainty as to what signs other traders might use without fear of infringement.

7. Ms Shearer summarized that evidence in the following words:           

   Nicole Kennedy declares that registration of the Application would not be in the interest of the coffee industry and that such registration would significantly restrict the normal promotion and advertising by coffee traders of their products;

   Paul Mannassis is concerned that if the Application is registered, he will not be able to continue to promote his business using images of white cups of coffee on its website and in its barista training manual. Concern is also expressed that if the Application is registered, coffee traders may infringe that registration by simply displaying photographs of cups of coffee and using those images to promote their products or businesses. Mr Mannassis therefore believes that it is in the public interest and in the interest of coffee traders that the Application not be registered;

   Peter Phillips declares that it is in the public interest that the Application not be allowed to proceed to registration; and

   Daniel Abrahams expresses concern about coffee traders potentially infringing the HALO device trade mark if they were to take and use an ordinary photograph of an unbranded cup of coffee in a certain way, whether it be from the side, top, or underneath. It is also declared that the Application is descriptive of the goods it covers, and that registration of the Application would significantly restrict the normal promotion and advertising by coffee traders of their products.

8. In downplaying those concerns, Ms. Shearer rightly conceded that, were the trade mark to be registered, it would not have the effect of monopolising the use of any image of a cup of coffee and would in practice have a narrow reach.

9. I agree with Ms Shearer that the concern expressed by some of the opponent’s declarants in this regard is overstated.  In any case, the key issue under subsection 41(3) was explained in Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 where Kitto J. said at paragraph 5:

   That ultimate question must not be misunderstood. It is not whether the mark will be adapted to distinguish the registered owner's goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others.

10. What is underscored by Kitto J. is that the trade mark must still qualify for registration.  In my opinion the trade mark is immediately suggestive of a cup of coffee.  That which has been subtracted from a photographic quality image of a filled cup of coffee topped by crema is the body of the cup, the part I would characterise as of least interest to the viewer, were it present.

11. Nonetheless, in my assessment, the trade mark is because of that subtracted part to some extent inherently adapted to distinguish the designated goods from the goods of other persons but, to use Branson J.’s words, “there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the designated goods.”

12. Accordingly, the registrability of the trade mark falls for consideration under section 41(5).

Section 41(5)

1. Under section 41(5) I must consider the extent to which the trade mark is inherently adapted to distinguish, together with the applicant’s use or intended use of the trade mark and any other circumstances.

2. Mr. Nicholas submitted that if the trade mark is inherently adapted to distinguish, then its “inherent adaptability” is slight.  I agree. 

3. There was no use of the trade mark before the filing date.  The evidence shows that the trade mark has been used in Australia since March 2006.

4. Martin Brown has been the Business Executive Manager (Beverages) at Nestlé Australia Ltd. since 2006.  In a statutory declaration, Mr. Brown explains that the trade mark has since March 2006 been used only for an instant coffee product said to be comparable in quality to espresso coffee and which “falls broadly within the premium instant coffee market”, of which it had a 1.1% share at the time of the making of his declaration in September 2008.  Mr. Brown declares that in the period from March 2006 to August 2008, sales of instant coffee bearing the trade mark exceeded $5.5million.

5. That level of sales revenue is far from insignificant, however Mr. Nicholas was critical of the physical evidence of use and promotion of the trade mark exhibited to Mr. Brown’s declaration.  In particular, whilst there is consistent use of the symbol ™  adjacent to the trade mark, both on the instant coffee product and in the advertising and promotional material, the trade mark is invariably found in the company of the NESCAFÉ trade mark and sometimes of additional trade marks such as BOLDNES.

6. In every example, the trade mark NESCAFÉ is used with, or in close proximity to, the applied-for mark, which led Mr. Nicholas to argue that “the use does not constitute trade mark use of the trade mark applied for as opposed to use of the Nescafè® mark or a composite mark consisting of the image of the cup of coffee coupled with the well known Nescafè® mark”.

7. Mr. Nicholas argued in the alternative that, to the extent that use of the applied for mark might qualify as trade mark use, the proximate, ever-present, use of the known Nescafè® trade mark meant that the applied for trade mark was, at best, a so-called limping trade mark which did not stand on its own.

8. I have already decided that that the trade mark has a degree of inherent distinctiveness, although I have agreed with Mr. Nicholas’s characterization of that as slight. With different evidence the Registrar might be convinced that the trade mark operates independently from the well known house mark, but there is nothing in the evidence of use before me, or in the other circumstances of the case, which compensates for the low inherent adaptability of the trade mark to distinguish the designated goods from those of other persons and so nothing to convince me to apply section 41(5).

Decision

1. Section 55 of the Act provides:

   55Decision

   (1)Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:

   (a)to refuse to register the trade mark; or

   (b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

   having regard to the extent (if any) to which any ground on which the application was opposed has been established.

   Note:For limitations see section 6.

   (2)Without limiting subsection (1), if the application was opposed on the ground specified in paragraph 62(a) (that the application, or a document filed in support of the application, was amended contrary to this Act), the Registrar may revoke the acceptance of the application and examine the application again under section 31.

   Note:For examine and this Act see section 6.

2. The opponent has established a ground of opposition and so I refuse to register application 1071007.

Costs

1. I award costs against the applicant, calculated in accordance with Schedule 8 to the Trade Mark Regulations 1995.

Debrett Lyons

Hearing Officer

Trade Marks Hearings

11 August 2009