Capricorn Society Limited

[2017] ATMO 34

TRADE MARKS ACT 1995

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

ReTrade mark application 1664888 (4, 12, 35, 37) – CAPRICORN - in the name of Capricorn Society Limited   

Delegate:                 Robert Wilson

Representation:       Applicant: David Stewart of Williams & Hughes Commercial and Litigation Lawyers

Decision:                   2017 ATMO 34

Trade Marks Act 1995 (Cth) – ex parte hearing – application for s 185 defensive trade mark – demonstrated use may be amongst limited number of consumers – aural use of trade mark may establish reputation – application accepted

Background

1. This decision concerns an application filed by Capricorn Society Limited (‘the Applicant’) to register a defensive trade mark under s 185 of the Trade Marks Act 1995 (‘the Act’). Details of the application are:

Application Number:	1664888
Filing Date:	16 December 2014
Goods and Services:	Class 4: Fuels, oils and lubricants Class 12: Motor vehicles, parts and accessories; cars, vans, motorcycles, trucks, and other utility vehicles and parts and accessories included in this class, including engines, shafts, axels, spindles, journals, shaft coupling/connectors, bearings, power transmissions, clutch mechanisms, gear change mechanisms, propeller shafts, steering linkages, shock absorbers, springs, brakes, alternating current motors/direct current motors, anti-theft devices, chains, torque converters and wheels; temperature controlled transport vehicles including refrigerated automotive vehicles and such vehicles fitted with refrigeration or heating apparatus and equipment and parts therefore included in this class Class 35: Wholesaling and retailing of new, used and second-hand motor vehicles and parts and accessories for motor vehicles; customer services in this class; advertising and promotion of motor vehicles, retail services, namely retail sales of motor vehicles Class 37: Maintenance and repair of motor vehicles, parts and accessories; vehicle maintenance services including after sales service; roadside emergency services for motor vehicles; installation, maintenance, repair and servicing of vehicle theft detection, notification and tracking systems and apparatus; vehicle fleet maintenance (‘the Defensive Goods and Services’)
Trade Mark:	CAPRICORN	(‘the Trade Mark’)

2. The application relies on the following four trade marks to support the application (all of which are owned by the Applicant):

Trade Mark Number	Trade Mark	Priority Date	Classes
400007	CAPRICORN	16 November 1983	4, 35, 36
429850	CAPRICORN	11 July 1985	39
957735	CAPRICORN	13 June 2003	12, 35
991357	CAPRICORN	27 February 2004	39

3. The application was examined as required by s 31 of the Act. The examiner issued a first adverse report dated 14 May 2015. The report raised grounds for rejection of the application including the ground under s 187, indicating, inter alia, that the Applicant had not provided evidence which established the reputation of the registered trade mark upon which the defensive trade mark application was based. The Applicant provided evidence which did not satisfy the examiner and a further three adverse reports were eventually issued. On 4 July 2016 the Applicant requested to be heard.

4. I heard the matter in Canberra on 1 February 2017 as a delegate of the Registrar of Trade Marks. David Stewart of Williams & Hughes Commercial and Litigation Lawyers appeared for the Applicant. Also present at the hearing was Bradley Gannon, in-house General Counsel of the Applicant. In accordance with my directions given before the hearing, Mr Stewart’s oral submissions were supplemented by written submissions filed with IP Australia on 30 January 2017. At the hearing I allowed the Applicant additional time to provide further evidence and submissions; these were filed by the Applicant on 31 March 2017.

Evidence

5. The Applicant relies on the same evidence it provided in response to the examiner’s adverse reports, being:

·Declaration made on 14 April 2016 by David John Fraser, the Chief Executive Officer of the Automotive Division of the Applicant, with Annexures DF-1 to DF-42 (‘the Fraser declaration’); and

·Declaration made on 1 July 2016 by Lisa Jannette Lough, Managing Director of the market research company Catalyse Pty Ltd, with Annexures LJL-1 to LJL-4;

plus the following additional declarations filed on 31 March 2017:

·Declaration made on 23 March 2017 by Darryl Gregor Abotomey, Managing Director and Chief Executive Officer of Bapcor Limited;

·Declaration made on 28 March 2017 by Dale Jason Durden, Head of Sales of the Applicant;

·Declaration made on 28 March 2017 by Christine Janet Moran, Credit Officer of the Applicant;

·Declaration made on 28 March 2017 by Jennifer Christine Stankiewicz, Supplier Support Payment Coordinator of the Applicant;

·Declaration made on 28 March 2017 by Colin Winning, Credit Risk Analyst of the Applicant;

·Declaration made on 28 March 2017 by Kelly Dunlop, Debt Recovery Officer of the Applicant;

·Declaration made on 29 March 2017 by Ian Francis Parkinson, Area Manager of the Applicant;

·Declaration made on 30 March 2017 by Darren Roy Arthur, Sales Manager of the Applicant; and

·Declaration made on 29 March 2017 by Dean Stewart Wotton, Member and Supplier Services Manager of the Applicant, with Annexures DW-1 to DW‑4;

The Applicant

6. According to the Fraser declaration:

The Applicant is a public company operating on cooperative principles (a member based organisation). The Applicant extends credit to its members by way of an account (Capricorn Account). Members use the Capricorn Account to make purchases from suppliers forming part of the Applicant’s preferred supplier group (Preferred Suppliers). The Preferred Suppliers are then paid by the Applicant. The Applicant is then paid by its members.

The Applicant supports businesses in the automotive industry by offering its members, and to a lesser extent its Preferred Suppliers, various services, including:

(a)a network of over 1,500 Preferred Suppliers across Australia;

(b)trade credit;

(c)access to business and risk protection;

(d)a range of equipment finance options …

The Applicant was established … in Perth, Western Australia in 1974 by a small group of Western Australian service station owners to increase their buying power and to better compete with large multinational oil companies. …

By 1985, the Applicant had established three new premises in Western Australia, and in 1987, it expanded into New South Wales. By 1991, the Applicant had also established offices in South Australia, Victoria, Queensland and Tasmania.

In the late 1990s, the Applicant began to expand internationally, establishing an office in New Zealand in 1997 and in South Africa in 2000. …

[T]he Applicant has over 15,000 members and 1,800 preferred suppliers trading from 5,000 locations across Australia … and is well-recognised as a leader in the Australian automotive industry.

Discussion of the law of defensive trade marks

7. The Applicant applied for the Trade Mark pursuant to s 185 of the Act—that section provides:

Section 185 – Defensive trade marks

(1)If, because of the extent to which a registered trade mark has been used in relation to all or any of the goods or services in respect of which it is registered, it is likely that its use in relation to other goods or services will be taken to indicate that there is a connection between those other goods or services and the registered owner of the trade mark, the trade mark may, on the application of the registered owner, be registered as a defensive trade mark in respect of any or all of those other goods or services.

Note: For registered trade mark and registered owner see section 6.

(2)A trade mark may be registered as a defensive trade mark in respect of particular goods or services even if the registered owner does not use or intend to use the trade mark in relation to those goods or services.

(3)A trade mark may be registered as a defensive trade mark in respect of particular goods or services even if it is already registered otherwise than as a defensive trade mark in the name of the applicant in respect of those goods or services.

(4)A trade mark that is registered as a defensive trade mark in respect of particular goods or services may be subsequently registered otherwise than as a defensive trade mark in the name of the registered owner in respect of the same goods or services.

8. As noted by Mr Stewart in his submissions, there is little Australian case law relating to defensive trade marks. Mr Stewart provided a concise and relevant history of the origin of defensive trade marks and their adoption into Australian law. I could present this information no better than Mr Stewart has so I have reproduced his information here:

The ability of a person to secure a defensive trade mark registration was first introduced in the [Trade Marks Act 1955 (Cth)], based on the Trade Marks Act 1938 (UK) (UK Act).

Section 27(1) of the UK Act stated:

Where a trade mark consisting of an invented word or invented words has become so well known as respects any goods in respect of which it is registered and in relation to which it has been used that the use thereof in relation to other goods would be likely to be taken as indicating a connection in the course of trade between those goods and a person entitled to use the trade mark in relation to the first-mentioned goods, then, notwithstanding that the proprietor registered in respect of the first-mentioned goods does not use or propose to use the trade mark in relation to those other goods and notwithstanding anything in the last foregoing section, the trade mark may, on the application in the prescribed manner of the proprietor registered in respect of the first-mentioned goods, be registered in his name in respect of those other goods as a defensive trade mark and, while so registered, shall not be liable to be taken off the register in respect of those goods under the last foregoing section.

The most-often cited case relating to defensive trade marks considers that piece of legislation: In Re Ferodo Ltd’s Application (‘Ferodo’),[1] Evershed J held that an applicant for a defensive trade mark must be able to show that use of the mark in the past for particular goods that, if the mark were on other goods, a consumer would be led to believe that there was a trade connection between the different goods:

[1] (1954) 62 RPC 111.

[T]he conclusion to be reached by the court or the Comptroller-General must be the inference, in the light of all the known facts, including the general knowledge of the word in its application to the specific goods mentioned, that persons seeing the mark attached to the new class of goods would assume that they originated from the proprietor of the mark or a registered user.

In reaching a conclusion on this matter it is obvious that the nature of the goods ‘in … respect of which’ the trade mark ‘is registered … and used’ is an important factor, for generally speaking the more special in character those goods are and the more limited their market, the less likely will be the inference required by the sub-section to be drawn in relation to goods of a very different kind. If ‘Ferodo’ were a mark which had achieved notoriety in connection, say, with a paint or a dye-stuff used by the domestic householder, the required inference would as it seems to me be much more easily drawn from its application to pharmaceutical products.[2]

[2] Ibid 121.

Guidance on what types of evidence may be persuasive was also provided by the court in this decision:

[I]t seems to me desirable that there should ‘be available’ for the assistance of the Court at least some evidence from persons concerned and experienced in the trades affecting the classes of goods, in respect of, which defensive registration is sought. In the first place it should as it seems to me to be proved that the word ‘Ferodo’ has not in fact already been used and applied to any goods falling within those classes. Secondly it might well, I think, be important for the Court to be informed of the significance within those trades of the use of brand names. … Thirdly I think it would be both legitimate and useful for witnesses of the kind I have mentioned to state what, having regard to their own business experience, would be the effect on their own minds of seeing, say ‘Ferodo’ aspirins or ‘Ferodo’ cigarettes.[3]

[3] Ibid 123-24.

Evershed J also held that registration under section 27 of the UK Act was not confined to goods of the same description as those for which the mark was already registered, but the onus on the applicant was easier to discharge when the goods for which defensive registration was sought were of a similar nature for which it had been used.

Ferodo was applied in the 1949 case, Re Vono Ltd.[4]

[The Trade Marks Act 1955 (Cth) s 93] was intended to be a more liberal version of section 27 of the UK Act, and to be of more practical value.[5] Section 93(1) stated:

Where a trade mark registered in Part A of the Register has been used to such an extent in relation to all or any of the goods in respect of which it is registered that the use of the trade mark in relation to other goods would be likely to be taken as indicating a connexion between those other goods and the registered proprietor, the trade mark may, upon the application of the registered proprietor of the trade mark, be registered as a defensive trade mark in Part D of the Register, in the name of the applicant as proprietor, in respect of all or any of those other goods notwithstanding that he does not use or propose to use the trade mark in relation to those other goods and notwithstanding anything in section twenty-three of this Act.

The Federal Government’s ‘Senate Official Hansard No 16, 1955 (Wednesday 20 April 1955), in discussing the introduction of defensive marks in the 1955 legislation, reads as follows:

Part D of the register will enable the registration of what are described as ‘Defensive Marks’. ... The purpose is to enable registration to be made under the part in respect of a mark which is used to such an extent in relation to the particular goods in respect of which it is registered that its use in relation to other goods would be likely to be taken as indicating a connexion between those other goods and the registered proprietor of the mark. A good illustration is provided by the word ‘Kodak’, which has acquired such a wide reputation in relation to the particular goods in respect of which it is used that its use in relation to other goods perhaps entirely different in nature might well suggest that those other goods were the product of the proprietors of the trade mark ‘Kodak’. In this respect the committee has again adopted a provision of the English legislation, but it recommends the application of the English provisions with some variation. In England a word can only be registered as a defensive mark if it is an invented word. The committee felt that there could be instances in which a word which was not an invented word, such as, for example, the word ‘lion’, might be so extensively used in relation to particular goods that its use with respect to other goods would be likely to deceive. For this reason, it has recommended that the register of defensive marks should not be limited to invented words.

[4] Re Vono Limited’s Application for the Registration of a Defensive Trade Mark in Class 3 (1949) 66 RPC 305.

[5] Dean Committee, Report of the Committee to Consider what Alterations are Desirable in the Trade Marks Law of the Commonwealth (1954) [136]  (‘The Dean Committee Report’).

9. Mr Stewart submitted, and I agree, that having regard to the lack of authority from the Australian courts with respect to defensive trade marks, it is open to the Registrar to rely upon authority from the UK courts.

10. Section 187 of the Act provides grounds for rejecting applications for defensive trade marks additional to the usual grounds. The section provides:

Section 187 – Additional grounds for rejecting application for registration or opposing registration

In addition to any other ground on which:

(a)   an application for the registration of a trade mark as a defensive trade mark may be rejected; or

(b)     the registration of a trade mark as a defensive trade mark may be opposed;

the application must be rejected or the registration may be opposed:

(c)   if the trade mark is not registered as a trade mark in the name of the applicant; or

(d)     in the case of a registered trade mark—if it is not likely that the use of the trade mark in relation to the goods or services in respect of which its registration as a defensive trade mark is sought will be taken to indicate that there is a connection between those goods or services and the registered owner.

Note: Division 2 of Part 4 sets out the main grounds for rejecting an application but section 41 does not apply to defensive trade marks (see section 186). Division 2 of Part 5 sets out the main grounds for opposing registration.

11. Neither of ss 185 or 187 uses the word ‘reputation’; nevertheless, it is apparent from the wording of ss 185 and 187 and the discussion of the law of defensive trade marks provided above, that it is necessary for an applicant for a defensive trade mark to establish that the registered trade mark upon which it relies has acquired a reputation in connection with all or any of the goods or services in respect of which it is registered. It is also necessary for the Registrar to be satisfied that because of that reputation were the trade mark to be used in relation to other goods or services it is likely this use would be taken to indicate that there is a connection between those other goods or services and the applicant. This poses two questions: firstly, in respect of what group of people must the trade mark have acquired a reputation; and secondly, among what group of people is it necessary that the assumption as to connection is likely?

12.     There is no reason, in my view, to assume that the reputation acquired by the trade mark relied upon must have been be acquired in respect of all consumers of the relevant goods or services in Australia. Nor is it necessary that all consumers of the relevant goods or services in Australia will assume the necessary connection. The raison d’être of the Act is the avoidance of deception or confusion amongst consumers as to the trade source of goods and services. This is reflected in a number of the grounds for rejecting applications and a number of the grounds for opposing registration. There are clear parallels between the requirements for registration of a defensive trade mark and the ground of opposition under s 60 of the Act: both are concerned with reputation acquired by trade marks and the likelihood of deception or confusion that might arise from such reputation. Case law in respect of s 60, may therefore be of assistance.

13. When considering a ground of opposition under s 60 in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd, Moore J was satisfied that a reputation within a limited geographical area (Melbourne and Geelong) and amongst a limited set of potential customers (parents of young children) would give rise to confusion of the relevant character for the purposes of s 60.[6] Further guidance may be found in the case of Le Cordon Bleu BV v Cordon Bleu International Ltee[7] which was decided under s 28(a) of the (now repealed) Trade Marks Act 1955. That provision did not refer to ‘reputation’ at all, only that use of the impugned trade mark would be ‘likely to deceive or cause confusion’. Nevertheless the words of Heerey J are useful:

What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient …[8]

[6] [2000] FCA 618.

[7] [2000] FCA 1587.

[8] Ibid [91]. It is to be noted that Heerey J’s decision was overturned on appeal to the Full Federal Court, although not on the point quoted.

I am of the view, that similar principles are appropriate in respect of defensive trade marks.

14. An additional matter which requires discussion arises from the wording of s 185. The section refers to ‘the extent to which a registered trade mark has been used’. What constitutes use of a trade mark is addressed in s 7 of the Act. That section provides:

Section 7 – Use of a trade mark

(1)   If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.

Note: For prescribed court see section 190.

(2)  To avoid doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, as use of the trade mark.

(3)  An authorised use of trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.

(4)  In this Act: use of a trade mark in relation to goods means use of the trade mark upon, or in physical relation to, the goods (including second-hand goods).

(5)  In this Act: use of a trade mark in relation to services means use of the trade mark in physical or other relation to the services.

The present application

15.     The application relies on a number of the Applicant’s registered trade marks which are for the plain word CAPRICORN. The evidence originally provided by the Applicant demonstrates that the Applicant was, at the time of the application, a successful business, trading across much of Australia, providing services in the nature of sourcing and supplying automotive parts and accessories (which appears in the specification of trade mark number 957753) and provision of credit (which appears in the specification of trade mark 400007). The evidence also showed that the Applicant’s services are provided to its members rather than Australian consumers of such services generally. The original evidence also demonstrated that the Applicant’s trade mark, shown below, (or slight variations of it) had acquired a significant reputation amongst its customers.

‘the Capricorn Logo’

16.     At the hearing I indicated that I was not satisfied that use of the Capricorn Logo was use of the plain word CAPRICORN ‘with additions or alterations which do not substantially affected the identity of the trade mark’.[9] Consequently, use of the Capricorn Logo could not support an application for a defensive trade mark based on the plain word CAPRICORN. I provided the Applicant with additional time following the hearing to provide evidence of use of the plain word CAPRICORN which might support the application. The Applicant provided the additional declarations indicated at para 5, above, in the time allowed.

[9] See the Trade Marks Act 1995 s 7(1).

17. The additional declarations demonstrate frequent and extensive use of aural representations of CAPRICORN by the Applicant in situations such as personal dealings with the Applicant’s members and prospective members both in person and via the telephone. For example, a typical telephone greeting used by the Applicant is ‘Hello, welcome to CAPRICORN this is Jenny speaking. How can I help?’ In line with s 7(2) of the Act, I am satisfied that such aural representations constitute use of at least two of the Applicant’s registered trade marks, being the 400007 and 957753 trade marks. I am also satisfied that because of this use CAPRICORN has acquired a significant reputation amongst the Applicant’s members in respect of the services it provides.

18. The Defensive Goods and Services are related to the automotive industry. This is the area of business in which the Applicant and its members are involved. I am satisfied that because of the extent that CAPRICORN has been used by the Applicant it is likely that its use in relation to the Defensive Goods and Services would be taken to indicate that there is a connection between the Defensive Goods and Services and the Applicant. This is so at least amongst its 15,000 members and 1,800 preferred suppliers, and this is, in my view, sufficient to satisfy the requirements of s 185.

Decision

19. Section 33 of the Act provides:

Section 33 – Application accepted or rejected

(1)The Registrar must, after the examination, accept the application unless he or she is satisfied that:

(a)the application has not been made in accordance with this Act; or

(b)there are grounds under this Act for rejecting it.

Note: For this Act see section 6.

(2)The Registrar may accept the application subject to conditions or limitations.

Note: For limitations see section 6.

(3)If the Registrar is satisfied that:

(a)the application has not been made in accordance with this Act; or

(b)there are grounds under this Act for rejecting it;

the Registrar must reject the application.

Note: For this Act see section 6.

(4)The Registrar may not reject an application without giving the applicant an opportunity of being heard.

Note: For applicant see section 6.

20.     I am not satisfied that there are grounds under this Act for rejecting the application. Accordingly, I accept the application.

Robert Wilson
Hearing Officer
Trade Marks and Designs Hearings
24 April 2017