Carlton and United Breweries Limited v Royal Crown Company, Inc

[2001] ATMO 7

TRADE MARKS ACT 1995

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

Re:Opposition by Carlton and United Breweries Limited to registration of trade mark application number 750239 in the name of Royal Crown Company, Inc. for the word trade mark ROYAL CROWN DRAFT in Class 32.

Background
Royal Crown Company, Inc. (the applicant) filed trade mark application number 750239 on 3 December 1997.  The application was for the registration of the word trade mark ROYAL CROWN DRAFT and covered the statement of goods, "Soft drinks; syrups, concentrates and extracts for making same " in Class 32.

Following examination, the Registrar advertised the trade mark as accepted in the Australian Official Journal of Trade Marks of 9 April 1998.  Carlton and United Breweries Limited (the opponent) filed notice of opposition to the trade mark’s registration on 6 July 1998.  That notice listed several grounds of opposition under the Act.  However, at the hearing set down to decide the matter, the opponent's attorney advised that he would only be making submissions based on s. 43 - that, because of some connotation contained in the trade mark, then the use of it by the applicant in relation to the goods sought to be covered would be likely to deceive or cause confusion.  Accordingly, that ground is the subject of this decision and the reasons for it.

The opponent requested a hearing in the matter and it came before me, as a delegate of the Registrar, in Canberra.  Representing the opponent at the hearing was Mr Tim Allen, of Griffith Hack.  Appearing on behalf of the applicant was Mr Gerard Skelly, of Spruson & Ferguson.

The Evidence
The evidence in support comprises declarations by several people.  These include: John Bresnin, Christopher Evans, Robert Stanley-Jones, Timothy Orange, Allen Jefferies, Frederick Rymer, Craig English and David Yardley (the first Yardley declaration).  These declarants state their experience and length of time in the hotel and liquor retailing industries, and give their opinions about what they believe to be the usual practice in the trade with respect to the service of beer and soft drink.  They also declare as to the meanings which they ascribe to the words DRAFT or DRAUGHT and what they expect the general public would infer from seeing those words.  Mr Yardley, the National Marketing Manager, Brands of the opponent, also annexes various exhibits to his declaration, including copies of the definitions of, and discussions relating to, the words DRAFT or DRAUGHT (and those words with BEER) contained in several publications and websites, and also a menu offering "draft beers on tap".

Another declaration, which completes the evidence in support, is that of Frank Maas, the Executive Director of ACNeilsen Melbourne, a marketing research organisation.  Mr Maas gives details of his company and its activities.  He further discusses the surveys carried out by ACNeilsen and the methodology employed in carrying out such research on behalf of the opponent in relation to the present trade mark, and the results of it.  Annexed to his declaration are copies of the survey and the responses to it.

The applicant's evidence in answer consists of a sole declaration by Vaughan Barlow, an employee of Spruson & Ferguson, the applicant's attorneys.  Mr Barlow declares as to a search which he conducted of the Australian Trade Marks Office database and he annexes the results of those investigations.  He also reports on his purchase of a can of ginger beer which carries the words PUB DRAUGHT.  He further details various overseas registrations of the present trade mark in relation to non-alcoholic products.

The opponent's evidence in reply consists of declarations by two people.  The first of these is by Jacqueline Moutsias, of Moutsias Management Services Pty Ltd, an investigation company which carries out marketplace investigations.  Ms Moutsias says that she has made inquiries into the nature and extent of the use of various trade marks containing the words DRAFT or DRAUGHT and reports on her findings.  Completing the evidence in reply is another declaration by David Yardley (the second Yardley declaration) where he makes comments on points raised in the Barlow declaration which forms the evidence in answer.  He discusses various trade marks owned by the opponent and other entities, the opponent's business activities and what he says are normal industry practices in relation to the word DRAUGHT.  He annexes to his declaration several copies of pages from books, company extracts, industry reports and food standards codes.

Submissions and Analysis
As I previously indicated, Mr Allen only pursued the ground under s.43 in his submissions.  Both he and Mr Skelly made quite comprehensive submissions in relation to this ground.  I will not repeat them in detail here.  However, I will refer briefly to any points made by the respective parties which I consider are relevant in explaining my decision.

I can find no support in the opponent's submissions for those grounds in the notice of opposition which were not based on s.43.  Thus, in relation to all of those other grounds, I find the opposition has not been successful.  I will now turn to consider the allegation under s.43 that the applied-for mark contains a connotation which means that its use on the goods specified will be likely to deceive or cause confusion.

Section 43

This section reads:

Trade mark likely to deceive or cause confusion
43. An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.

The word "connotation", in the context of s.43, refers to that which is implied within a trade mark itself - in addition to its essential or primary meaning.  The ordinary meaning of that word is given online in the Macquarie Dictionary as:

1. the act or fact of connoting.  2. that which is connoted; secondary implied or associated meanings (as distinguished from denotation): for example, the word "bum" has connotations of vulgarity.

In the Oxford English Dictionary (Second Edition), the definition is given online as:

1. The signifying in addition; inclusion of something in the meaning of a word besides what it primarily denotes; implication.

Therefore it can be said that the word refers to that which is implied in a trade mark - in addition to its essential or primary meaning.  A connotation can result from the trade mark as a whole, or can result from a sign contained within the trade mark.  The prominence and context of the potentially deceptive or confusing element in the trade mark is important in deciding whether the trade mark is likely to deceive or cause confusion.  Considerations under s.43 must therefore concentrate on the matter within the trade mark that could cause deception or confusion in the mind of the relevant buying public.  The operation of this section of the Act does not depend upon the existence of a conflicting trade mark.

Mr Allen referred to several Court and Trade Marks Office decisions, with respect to the terms "connotation" and "likely to deceive or cause confusion" as expressed in s.43 of the Act, including Registrar of Trade Marks v WoolworthsLtd (1999) 45 IPR 411 (the WOOLWORTHS METRO case), Korean Air Lines Co Ltd v Myong Gil Lee & Anor 47 IPR 373 and Durkan v Twentieth Century Fox Film Corporation 47 IPR 651. On his part, Mr Skelly said that the onus must be on an opponent to show that there is a reasonable likelihood of deception or confusion occurring if a trade mark was used, relying for support here on the words of French J in the WOOLWORTHS METRO case, supra.

The word, which the opponent alleges has a deceptive or confusing connotation here, is the word DRAFT.  Mr Skelly put forward some contrary argument as to whether this word, which was of American origin in this context, could be fairly seen to be interchangeable with the Australian word DRAUGHT, saying that nowhere in the evidence was it shown that the words were used that way.  However, I am of the opinion that, in the eyes of contemporary Australians, those words - when used in relation to beverages - are the same, especially given the gradual inroads of the American form of spelling in our newspapers, magazines, advertising and via the Internet.  I believe that, for good or bad, the Australian public has become well used to seeing such parallel spellings as programme/program, centre/center and cheque/check in the media and in correspondence, and make the necessary mental adjustment.

Mr Allen submitted that the opponent's evidence showed that the word DRAFT, as it appears in the present trade mark, connotes an association with beer and that, because of that connotation, its use by the applicant on the applied for goods would be likely to deceive or cause confusion.  Mr Skelly responded that, in Australia, there was no convincing evidence to show that there was any connotation in those words, with respect to beer alone.  He said that there were many other meanings of that word, including the mere taking of a drink.  Mr Allen led me through the evidence in the case, pointing to the statements made by declarants for the opponent that, because of their experience in hotels and bottle shops, they associated the words DRAFT or DRAUGHT with beer, and their belief that use on the applicant's goods would lead to deception and confusion amongst customers.  However, Mr Skelly countered with argument that I should afford little weight to some of the comments made by several of opponent's declarants.  He said that a number of them were employed by, or had some association with the opponent, and had made conflicting and debatable assertions regarding the use of the words DRAFT or DRAUGHT and usual industry practices.

In this regard, I do take note that the majority of these declarants have some connection with the opponent.  Therefore, they can hardly be considered to be independent of proceedings.  However, I have nothing before me to show that they are other than sincere and truthful in reporting their own views, based on their knowledge.  Despite this, I am not so convinced as to their ability to predict the actions of others.  Here, I have had regard to the words of Justice Finn in C A Henschke & Co & Ors v Rosemount Estates Pty Ltd 47 IPR 63 at 85 - which was not disputed by the Full Bench and upheld on appeal:

To the extent that the experts express an opinion of the likelihood of an association being made by the relevant section of the wine purchasing public (see below) in consequence of the shared words in the brand names of the two wines, I am not satisfied that, save possibly for Mr Forrestal, they have been shown to possess a specialised knowledge based on experience that would allow them to venture that opinion. In saying this I am not in any way doubting the particular respective experience of each in aspects of the wine industry. What I am questioning is their demonstrated possession of such specialised knowledge of consumer decision-making processes in this market as would admit of their expressing the particular opinion they have. Their experience would, at least in some cases, indicate a knowledge of the fact of actual mistake or confusion arising where there has been a particularly close similarity in brand names (eg Moss Wood and Moss Brothers; Karrivale and Karriview; Wyndham Estate Bin 555 and Eden Valley TR 222). What it does not adequately suggest is a knowledge based on an experience of the factors that may be causative of, and the conditions that create the likelihood of, mistake or confusion in the decision-making of uninvolved wine purchasers as could found the opinion ventured: cf Clark v Ryan (1960) 103 CLR 486. At best some number of the opinions on mistake and confusion seem based on no more than conjecture or intuition. These experts in my view are being used to argue the applicants' case: Clark v Ryan, at 491.

I think that the present instance is on all fours with that case.  Therefore, while I give due weight to the comments that the opponent's declarants have made as to their own beliefs, in the context of their being experienced but possibly partisan traders, I nevertheless attach no weight to these declarants' opinions in relation to any potential deception or confusion which they have ascribed to purchasers in the market place.

Mr Allen further referred me to the ACNeilsen survey, submitting that it had been legitimately carried out, and that it showed that a majority of those, in the relevant market place, assume an association between the word DRAFT and an alcoholic drink.  Mr Skelly criticised the survey, saying that it was "flawed", and alleging that it did not fully comply with the usual guidelines for such surveys as laid down by the courts.  The respondents were asked to look at a card which displayed the words ROYAL CROWN DRAFT in the format:

ROYAL CROWN
DRAFT

They were then asked :
If you saw ROYAL CROWN DRAFT on a can or bottle of drink, would you assume that the drink is alcoholic or non-alcoholic?
or, alternatively,
If you saw ROYAL CROWN DRAFT on packaging for syrups, concentrates or extracts for making a drink, would you assume that the drink is alcoholic or non-alcoholic?

I find that I do concur with Mr Skelly here that, because the word "alcoholic" was placed first in both of the questions put to respondents, then it is possible that they could have selected that word in "donkey vote" fashion.  With s.43 in mind, I would have been more inclined to give greater credence to the claimed results if a question had been put to participants that read something like: "If you saw ROYAL CROWN DRAFT on a bottle or can of drink, or on a container of syrup or extract for making a drink, what assumptions would you make, if any, concerning the nature of the goods?"  I am also of the opinion that the isolation of the word DRAFT from the words ROYAL CROWN on the display card may have been a factor in implying its prominence and importance in the phrase.  Consequently, I agree with Mr Skelly's argument that little weight should be afforded the inferences which were drawn from the survey - given the possible skewing of results which may have resulted from the way the material was presented to the respondents.

In relation to the applicant's evidence in answer, Mr Allen discussed the instances cited of the use of the word DRAUGHT on alcoholic and non-alcoholic beverages - especially ginger beer - while seeking to distinguish the present situation due to several factors.  He said that, although ginger beer enjoyed a "rather peculiar status" and had a close association with beer, it was widely recognised as being non-alcoholic.   In any case, he submitted, it was the use of the mark on all of the goods - its notional use - which was a matter of concern here.  He further discussed the remainder of the applicant's evidence, especially any instances of the words DRAFT or DRAUGHT on the Register, saying that most included an endorsement related to a "claim to vary" that word in relation to the goods covered.

There are currently nine Australian registered trade marks which include the word DRAFT in Class 32, and 23 instances which include the word DRAUGHT.  Given my previous comments in relation to the interchangeable nature of these words, I intend to treat all of these instances as being equivalent.  Mr Allen submitted that the state of the Register was irrelevant because it did not represent the state of the market and also that unknown factors may have led to particular acceptances for registration - British Sugar Plc v James Robertson & Sons Limited (1996) RPC 281 (the TREAT case).

With respect to the state of the Register and the reference to that in the TREAT case, supra, Mr Skelly said that the focus there was on the ability of a mark to distinguish and not the concept of connotation.  He said that the reality of what had been registered in Australia could not be completely discounted in considering grounds of opposition under s.43.  He submitted that the opponent had not shown here that the registered marks containing the words DRAFT or DRAUGHT and covering non-alcoholic beverages were not relevant to the present proceedings.  He also questioned what was intended by the inclusion of those words on drink labels, especially given the vague inferences which could be drawn from the "claim to vary" endorsements on several registered marks.  He questioned whether the words' normal use was only related to beer, or to other alcoholic beverages, such as cider, or to such soft drinks as ginger beer - their prior use on the latter being shown in the evidence to be a market reality.

I have had regard to the words of Justice Jacob in the TREAT case, supra.  However, I agree with Mr Skelly that the court there was concerned with whether a mark was capable of distinguishing.  In contrast, the task I have before me here is whether there is a connotation in a particular trade mark which will mean that its use will be likely to deceive or to cause confusion.  Therefore, it is not the concept of registrability with which I should be concerned but whether the relevant market will be misled because they will believe that the word DRAFT in the present mark refers to beer, or at least to an alcoholic beverage.  Hence, while I do not give a great deal of weight to the appearance of the words DRAFT or DRAUGHT in trade marks presently on the Australian Register, I am not compelled to completely ignore the fact that there are a number of marks already registered which include those words and which cover non-alcoholic beverages - including a number of registrations owned by the opponent itself.  It is true that many of these - but not all - include an endorsement to the effect that the descriptions DRAFT or DRAUGHT in the mark are varied in accordance with their application to some goods in the specification - particularly those registered under the Trade Marks Act 1955.  However, as I will go on to discuss, what this means is open to some interpretation.

To determine what the word DRAFT actually means to those in the market and what effect an endorsement relating to "a claim to vary" in respect to it would signify, I have had regard to the dictionary definitions of those words.  The Oxford English Dictionary defines the word DRAUGHT as, inter alia: "drawn or ready to draw from the cask: as draught ale, beer etc.", while the Macquarie Dictionary gives a similar meaning in relation to beer: "beer drawn from a cask or keg".  However, as anyone who has visited a hotel or bottle shop is aware, in addition to beer sold over a bar from a tap connected to a keg, beer in cans and bottles is also sold which is claimed to be DRAFT or DRAUGHT.  The definitions offered by the opponent, in its evidence, of the words DRAFT or DRAUGHT BEER include those beers which are: in Australia, inter alia, "a style of full strength lager"; "drawn from a cask, not bottled"; "fully brewed"; "well balanced... with a significant malty character and clean hop bitterness"; in the United States it is beer which "is unpasteurised or ... bottled under sterile filtration methods", and in England and parts of Europe it is "non-carbonated".  Given this plethora of meanings, I have concluded that the term is imprecise and can be inferred by different people to mean different things.  Notwithstanding this, I am willing to accept that packaged beer labelled in this fashion is implied to be in the style of draught beer - however that description might be understood by different Australian drinkers.

Given my finding in relation to the imprecision of the term DRAFT or DRAUGHT in relation to beer, I must now decide whether the term would connote that it related only to beer, as the opponent has also claimed, or at least alcoholic drinks, such as alcoholic cider.  If I find that there is that connotation, the second leg of the equation that must be shown, in respect of the s.43 ground is whether, because of that association, deception or confusion would be likely to ensue.

The most consistent meaning of the expression, DRAFT or DRAUGHT, in relation to beer, in the references is that it refers to any style of beer that is drawn directly from the keg via dispensing equipment at the point of purchase and poured from a tap directly into a glass or tankard - although, occasionally, a bottle or can has now entered the equation before it finally reaches the drinker.  It is undisputed in the evidence that the word DRAUGHT has already been used on ginger beer, with no reported instances of confusion.

Mr Yardley, in his second declaration, refers to the can of PUB DRAUGHT ginger beer in the applicant's evidence, saying that the prominent display of the words GINGER BEER "prevents any misrepresentation" which the words PUB DRAUGHT might convey.  However, he also says that, because the can additionally carries a depiction of "saloon doors" and a "foaming tankard of a beverage", then the words PUB DRAUGHT beer is a play on the word DRAUGHT as a term associated with beer.  Notwithstanding, this apparent conflict, that is only his opinion and, given the dictionary meanings of that word, it could equally connote ginger beer which tastes like an old fashioned style of that drink which was sold in bulk.

The word DRAFT or DRAUGHT is also included in trade marks which are registered for other non-alcoholic beverages - although the commercial use of some of these has been questioned by the opponent.  Notwithstanding this, they are still registered marks against which there have been no removal applications made on the grounds of their non-use.  The implication is therefore that they are currently used, or are still intended to be used.  I think that what is suggested by the labels, in the examples quoted by both parties, is that the particular beverage on which they are used tastes like a drink straight from a keg or barrel, even if it is sold in a can or a bottle.  It is the case that many beers are transported, stored and sold in kegs, barrels and other large containers but so are many other drinks, such as cider, ginger beer and, apparently, "draft malt cola".

Given the foregoing, I believe that, while there is certainly a degree of association of the word DRAFT or DRAUGHT with beer, there is also an implied connection with other beverages - both alcoholic and non-alcoholic.  I am of the opinion that the main inference which could be drawn from the term is that the beverage on which it is used tastes like it came from a large container or cask - even if it arrives via the medium of a bottle or can.

For the opposition to succeed, any deception or confusion which might ensue because of the use of the applicant's mark, should be bound to occur amongst a substantial number of people who were likely to be concerned in the purchasing of the particular goods - as per Kendall Company v Mulsyn Paint and Chemicals 109 CLR 300. The test for deception or confusion was recently dealt with in the judgment of French J. in the WOOLWORTHS METRO case supra, at 39,695 (paragraph 43). In considering the phrase, "likely to deceive or cause confusion" his Honour says:

The use of the word "likely" in this context does not import a requirement that it be more probable than not that the mark has that effect.  The probability of deception or confusion must be finite and non-trivial. There must be a "real tangible danger of its occurring".

I do not think that an ordinary person, on seeing the words ROYAL CROWN DRAFT on a bottle or can of soft drink or syrup, would seriously believe that it contained beer or alcohol merely because of the presence of the word DRAFT.  Therefore, I do not believe that any connotation which is inherent in the mark, in relation to beer or alcohol, is strong enough to cause enough persons in the relevant public to be deceived or confused.  I believe that the major inclusion of the words DRAUGHT or DRAFT in trade marks, including the present instance, is intended to be in a suggestive, rather than a descriptive manner.  Given all of the foregoing, I find that the opposition, so far as it relies upon s.43, is not made out.

Conclusion
I have found that the opposition has not been successful on the one ground pursued at the hearing.  I have also found that there has not been a case established in relation to the other grounds listed in the notice of opposition and I have not found in favour of the opponent there.  Accordingly, as the delegate of the Registrar in this matter, I dismiss the opposition as a whole.  It follows that, providing that the relevant fee is paid, the application may proceed to registration.

Costs
Both parties sought their costs in the matter.  It is usual in such matters for the costs to follow the cause and I can see no reason why I should depart from that here.  Thus, I award costs against the opponent in accordance with the official scale, as set out in Schedule 8 of the Trade Mark Regulations.  If required, the costs will be taxed, allowed and certified by a trade marks officer appointed by the Registrar for that purpose.

Ian Forno
Hearing Officer

23 January 2001