Cat Media Pty Limited v Apex Marketing Group LLC
[2004] ATMO 31
•3 June 2004
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Cat Media Pty Limited to registration of trade mark application 810133(3) - HAIR NO MORE - filed in the name of Apex Marketing Group, LLC.
Delegate: | Mary Skivington |
Representation: | Opponent: Mr David Kell of Counsel, instructed by Clayton Utz Lawyers. Applicant: Mr Mark Landyn, Director and Chief Executive Officer of the applicant. |
Decision: | Section 52 opposition - grounds of opposition not established - registration allowed. Costs awarded against the opponent except for the costs associated with the opponent's preparation and attendance at the subsequently deferred hearing on 28 October 2003. These costs are to be paid to the opponent by the applicant. |
Background
Apex Marketing Group LLC, ('the applicant'), a company established under the laws of the State of Delaware in the United States of America, filed trade mark application number 810133, to register the trade mark, HAIR NO MORE, on 13 October 1999. The nominated goods fall within class 3 of the International Classification of Goods and Services and are described as:
Cosmetics and skin care preparations, including hair removal and hair growth inhibitor products, depilatories and depilatory preparations.
Acceptance of the application was advertised in the Australian Official Journal of Trade Marks on 17 August 2000.
Cat Media Pty Limited, ('the opponent'), filed a notice of opposition to registration of the trade mark on 16 November 2000. The notice of opposition listed grounds of opposition under the provisions of sections 41, 42, 43, 58, 59 and 60 of the Trade Marks Act 1995, ('the Act').
The evidentiary phases of the opposition process were completed when the evidence in reply was filed and served on 14 August 2003. Both parties applied to be heard on the matter, which was initially set down for hearing in Sydney on 28 October 2003. Mr Mark Landyn, Director and Chief Executive Officer, of the applicant and who had intended to make submissions by telephone, on behalf of the applicant, requested a deferral of the hearing due to the wildfires in the United States, one hour after the scheduled time for the hearing. In addition to the wild fire situation the lateness of the call requesting deferral could be explained by a failure on the part of the applicant to appreciate that daylight saving in Australia had begun on 26 October 2003. As the Registrar's delegate I allowed the deferral because of the difficult and threatening circumstances in which Mr Landyn found himself and the fact that because of the fires, he had at the time, no means of accessing any of his papers. Subsequently, I heard the matter in Sydney on 16 March 2004.
At the hearing the opponent was represented by Mr David Kell of Counsel, instructed by Clayton Utz Lawyers. Mr Mark Landyn made submissions by telephone on behalf of the applicant.
The evidence
Evidence in support
The evidence in support comprises a statutory declaration with exhibits 'A' to L' made by Ms Sonia Amoroso, a director of the opponent, on 5 July 2001 and a second statutory declaration with exhibits 'A' to 'D', made by Ms Amoroso on 15 October 2001. Ms Amoroso's first declaration provides a history of the opponent's HAIR NO MORE trade mark. She declares that in October 1998, at a meeting 'to discuss a number of potential products' the company 'decided on the idea of a hair removal system'. This system, declares Ms Amoroso, was to include a depilatory cream and a hair retardant in a spray form. Ms Amoroso declares that in mid October she 'thought of the mark, HAIR NO MORE' for this product. Ms Amoroso declares that she worked on the first advertisement draft in November 1998. Shortly after Christmas, Ms Amoroso declares, she continued working on the designing and sourcing of the packaging for the new product in addition to continuing to work on the television and print media advertisements. In January 1999, Ms Amoroso declares, a graphic artist was commissioned to design the labels and packaging for goods that would bear the trade mark. At the same time or shortly thereafter, Ms Amoroso declares that the company set about sourcing products to meet the predetermined specifications of the system.
The history thus far is curious in that the trade mark, packaging and advertising were developed before the product had been found. It would be more usual, I think, to develop a product and then to assess its particular attributes as a preliminary to deciding how it should ultimately be promoted. Indeed the process described by Ms Amoroso would seem to apply more to a process for replication of a product than to the introduction of a new product.
Ms Amoroso declares that the final formula for the product was decided in April 1999 and it was in that same month that production began. The first sales were made in May. The exhibits show that the product has been widely promoted in the television and print media. Ms Amoroso provides sales and advertising figures which I regard as substantial.
Evidence in answer
The evidence in answer comprises two statutory declarations. The first of these with exhibits ML-1 to ML-17 was made by Mr Mark Landyn, on 12 November 2002. The second statutory declaration with exhibits PRR-1 to PRR-20 was made by Mr Peter Reed, who is the Managing Director of Fitness Design Pty Limited, ('Fitness'). This business is a distributor of health, nutrition, body-care and life-style products.
Mr Landyn declares that in 1996 his company was conducting laboratory research for a plant enzyme which might assist hair growth and that during the course of this research a formula was developed, from four botanical enzymes that in fact inhibit hair growth. He declares that he and his parents who are the principals in the company decided to launch a hair inhibitor product based on the formula. He declares that following some family discussion it was decided to call the product HAIR NO MORE. Mr Landyn declares that the company decided to market the product as a system comprising a hair vanishing cream and an advanced hair inhibitor in the form of a spray mist in a spray pack bottle or a soothing gel in a spray pack bottle. Mr Landyn declares that the official launch date was March 1998 although the first sale in the United States was made on 20 March 1997. Mr Landyn declares that an application to register the trade mark in the United States was filed on 10 October 1997. Mr Landyn declares that his company established its Internet site, in November 1997. Mr Landyn reports that sales have been made regularly to customers in Australia since September 1998. Exhibit ML-10 is an invoice dated 19 October 1998 sent to Mr Reed for samples of the goods.
Mr Reed declares that in September 1998 he purchased a United States body building magazine where he saw an advertisement for the applicant's HAIR NO MORE hair growth inhibitor. Mr Reed reports that he contacted the applicant company with a request for some samples which he received in October 1998. He declares that he was favourably impressed with the product and requested further samples. Exhibit PRR-2 is a copy of an invoice dated 12 October 1998 for fifteen samples of the cream, spray mist and spray gel and forty-five advertising flyers. Mr Reed declares that the flyers were distributed at the 'Network Expo' trade fair in Melbourne in November 1998 where he also demonstrated the product. In February 1999 Mr Reed declares that he was made the official distributor of the HAIR NO MORE products in Australia. Subsequently, Mr Reed declares, he prepared a promotional item for the March 1999 edition of his newsletter, EAS Australia News. Mr Reed reports that approximately three thousand copies of the newsletter were mailed to his customers. In or about November 1999, Mr Reed declares, he registered a domain name, hairnomore.com.au specifically for promotion of the goods that were also promoted on the Fitness website. Advertisements have been placed in the magazine Inside Sport since October 1999. In June and December 1999, HAIR NO MORE was exhibited at trade fairs in Sydney and Melbourne and has continued to be exhibited at other trade shows throughout the years 2000 and 2001. Exhibit PRR-19 is a document showing the value of sales of the products from July 1999 to October 2002. Mr Reed declares that he first became aware of the opponent's trade mark on or about 7 October 1999. Mr Reed reports that he informed the applicant who subsequently filed an application to register its trade mark on 13 October 1999.
Evidence in reply
The evidence in reply comprises Ms Amoroso's third statutory declaration with exhibits 'A' to 'F' and 'H' to 'V', dated 12 August 2003. Ms Amoroso declares that until shortly before the notice of opposition was filed she had never heard of the applicant, Fitness Design Pty Ltd, Peter Reed or the HAIR NO MORE products produced by the applicant. Exhibits include sales figures from July to December 2000, and copies of print media advertisements along with circulation figures for the various magazines carrying the advertisements.
Grounds of opposition
At the hearing Mr Kell pressed grounds of opposition under the provisions of sections 41, 42, 43 and 60. The remaining grounds of opposition were not pressed and I now find that they have not been established.
Submissions and the law
Section 60
In order to satisfy a ground of opposition under the provisions of section 60 of the Act, the opponent must establish that the applied for trade mark is substantially identical with or deceptively similar to another trade mark or trade marks that have acquired a reputation in Australia before the priority date, 13 October 1999, of the applied for trade mark, and because of that reputation, use by the applicant of its trade mark, would be likely to deceive or cause confusion. Section 60 does not require the relevant goods or services to be the same or closely related although I note that the goods of interest to both parties are the same. Nor does section 60 require the trade mark, on which the opponent relies, to be a registered trade or the subject of an application for registration.
The opponent, however, is the owner of trade mark application number 857384, filed on 16 November 2000, the same date it filed a notice of opposition to registration of the subject trade mark. The opponent's trade mark is depicted below.
Gummow J in Carnival Cruise Lines Inc. v Sitmar Cruises Limited, 31 IPR 375, said in respect of substantially identical trade marks
It requires a total impression of similarity to emerge from a comparison between the two marks. In a real sense a claim to proprietorship of the one extends to the other.
The essential feature of each trade mark is identical. It is the words, HAIR NO MORE by which the trade marks will be remembered and by which purchasers will request the goods. The device elements in the opponent's trade mark, two horizontal lines with a moustache half way along the upper line, are essentially incidental and unmemorable decorative elements, nonetheless these visual differences prevent a finding that the trade marks are substantially identical.
In Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 at 658, Dixon and McTiernan JJ defined the tests to be applied in determining the issue of deceptive similarity. They said,
In deciding this question, the marks ought not, of course, to be compared side by side. 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, then similarities both of sound and of meaning play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard. Evidence of actual cases of deception, if forthcoming, is of great weight.
I find that on the basis of these tests that the trade marks are certainly deceptively similar and thus the threshold test for section 60 of the Act has been satisfied.
Mr Kell referred to the words of Kenny J in McCormick & Co v Mary McCormick, (2001) 51 IPR 102, where he said,
In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product.
In the same case Kenny J cited with approval Hearing Officer Ian Thompson's observations in Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl GmbH & Co KG, (1999) 47 IPR 423 at 436,
[I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.
As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also the esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the `recognition' component of the trade mark's reputation. The credit, image and values projected by a trade mark attaches to the `esteem' component of the reputation as do the public events and other trader's marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, `contra deals' and so forth.
It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.
Mr Kell argued that the commercial success enjoyed by the opponent's HAIR NO MORE product has been, 'on any view of the matter, extraordinary.' He noted that production of goods bearing the opponent's HAIR NO MORE trade mark began in April 1999 and the first sales were made in May 1999. Mr Kell referred to the substantial sales made through a variety of channels and the extensive marketing of the product via television infomercials and the print media. Mr Kell also drew my attention to two testimonials from pharmacists relating to the commercial success of the product. One of these states in part, 'The publicity created strong demand and expanded our sales and of course our profit margin.' Mr Kell concluded that at the priority date the opponent's trade mark enjoyed a very substantial reputation and that as a consequence the section 60 ground of opposition should succeed.
I am satisfied that the opponent's HAIR NO MORE product was the subject of a high profile launch that resulted in substantial sales within a short period, however I do not consider that within the relevant period the opponent had done anything more than take an initial step towards establishing a reputation for its product. Clearly there is a time factor in establishing a reputation and six months is a very short period of time in which to establish a reputation.
McGarvie J in Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd, 10 IPR 402 in discussing proprietorship (ownership) of a trade mark said at page 413,
The basic common law principle is that the first person who uses a trade mark of an appropriate type within a country becomes the proprietor of the mark there.
On the basis of the facts before me I am satisfied that the applicant was the first user, in Australia, of its trade mark HAIR NO MORE, in relation to 'the same kind of thing' - Re Hicks' Trade Mark (1897) 22 VLR 636. It follows that in terms of section 58 of the Act, the applicant is the owner in Australia, of the trade mark, HAIR NO MORE.
What the opponent is in effect attempting to demonstrate to me is that the reputation of its logo trade mark HAIR NO MORE, is such that it displaces the applicant's rightful claims to ownership. This task might rightfully be seen as being Augean in scale and could only be achieved with evidence of similar proportions. I have no such evidence before me and now find that the section 60 ground of opposition has not been established.
Section 42(b)
Following the decision of Madgwick J in Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd, [2001] 52 IPR 24 the Registrar is obliged, when assessing whether use would be contrary to law, under subsection 42(b), to take into account the operation of laws and legislation other than the Trade Marks Act 1995. Mr Kell alleged that use by the applicant of its trade mark would contravene Section 52(1) of the Trade Practices Act 1974, (TPA), because such use would constitute conduct that is deceptive or misleading or likely to mislead or deceive. Mr Kell based his allegation on what he described as the 'substantial reputation enjoyed by the opponent'. He claimed that because of this reputation use by the applicant of its trade mark would result in there being a real risk that consumers would be misled or deceived into a belief that there is a connection between the applicant and the opponent.
Mr Kell supported his argument by reference to Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd, (1982) 149 CLR 191, Apand Pty Ltd v Kettle Chip Co Pty Ltd, (1994) 30 IPR 337, Taco Co of Australia Inc v Taco Bell Pty Ltd, (1982) 42 ALR 177, and S & I Publishing Pty Limited v Australian Surf Lifesaver Pty Limited, (1998) 168 ALR 396. Mr Kell said that in determining whether a breach of the TPA has occurred it was important to recognise that there must be 'a real or a not remote chance or possibility' of the relevant consumers being misled or deceived. He noted that Section 52 is not confined to conduct which is intended to mislead or deceive as a corporation that acts honestly and reasonable may nonetheless engage in conduct that is likely to mislead or deceive.
The TPA has a higher standard than does the Trade Marks Act 1995 so that confusion in the sense of wonderment, is not within the meaning of the words 'misleading or deceptive', Parkdale, supra. Shanahan's Australian Law of Trade Marks and Passing Off, 3rd Edition, 2003 at page 598 states,
Misleading conduct does not merely cause confusion; it actually directs a person towards the wrong choice.
In Dairy Vale Metro Co-Operative Limited v Brownes Dairy Pty Limited (1981) 54 FLR 243 Toohey J. said,
For the public to be misled or deceived it seems to me that there must be in the minds of the relevant public some established truth against which the notion of misleading or deceptive conduct can be measured.
I have already found that at the priority date the requisite reputation had not accrued to the opponent. It therefore follows that the opponent's case must also fail in terms of section 42.
Section 43
Section 43 provides that registration may be refused if, because of some connotation that the trade mark (or a constituent part of it) has, the use of the trade mark is likely to deceive or cause confusion.
It has been confirmed in Winton Shire Council v Lomas, (2002) 56 IPR 72, that this ground is directed to the mark itself, and not to any deception or confusion caused by the reputation in Australia of some other trade mark. That is an issue that is properly dealt with under section 60 of the Act.
Mr Kell submitted that confusion may arise where the trade mark appears to represent a quality or attribute not in fact possessed by the specified goods or services: Re Trade Mark 'Orwoola', (1909) 26 RPC 850. However, he said, properly construed the word 'connotation' is wider than this and refers generally to that which is implied in a trade mark in addition to its primary or essential meaning and that evidence can reveal the existence of such a connotation: Down to Earth (Victoria) Co-operative Society Ltd v schmidt (1998) 41 IPR 632 and Council of Ivy Group Presidents v Boydex International Pty Ltd, (2999) 49 IPR 619. Mr Kell argued that because of the extent of use of the opponent's trade mark the words HAIR NO MORE convey a connotation that that the applicant uses its mark under licence or approval from the opponent when in fact there is no such licence or approval. Mr Landyn contended that he was the first to use the trade mark in Australia and overseas and that in consequence the opponent's trade mark did not convey the connotation claimed by the opponent.
Cases such as Twentieth Century Fox Film Corporation v Durkan, 47 IPR 651 and Down to Earth, supra, indicate that a connotation that the product is sponsored, endorsed or somehow connected with another individual will arise only where the expression or name in question has achieved a currency in general language or amongst the specialist audience to whom the goods or services will be made available. On the basis of the evidence before me I have no reason to suppose that HAIR NO MORE enjoys a currency in the general language.
I am satisfied that the only connotation within the trade mark, HAIR NO MORE is one, that is entirely consistent with the intended effect to be achieved by use of the products carrying the trade mark. This ground of opposition has not been established.
Section 41
Subsection 41(2) of the Act provides that 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 from those of other traders. Subsection 41(3) provides that in deciding the question, the Registrar must first consider the extent to which the trade mark is inherently adapted to distinguish. If the Registrar finds the trade mark is to no extent inherently adapted to distinguish, then it is to be considered under the provisions of subsection 41(6). If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish, but it is not capable of distinguishing on that basis alone, then it is to be considered under the provisions of subsection 41(5). If, after consideration under the provisions of subsections 41(5) or 41(6), the Registrar is still not satisfied the trade mark is capable of distinguishing, or does in fact distinguish, then the application must be rejected.
Mr Kell strongly contended that HAIR NO MORE directly describes the nature of the product (no more hair cream) and the intended purpose or expected result or benefit from using the product, (no more hair). He said that central to determining a mark's capacity to distinguish is the likelihood that other traders, without improper motive, and in the ordinary course of their business might wish to use the mark to describe their similar goods. In support of his argument Mr Kell cited a number of authorities including Kitto J, in F.H.Fauldings & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd, (1965) 111 CLR 537 and again in Clark Equipment Co v Registrar of Trade Marks, (1964) 111 CLR 514, where he said that the question of whether a mark is adapted to distinguish should,
[B]e tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
Mr Kell also noted that Lord Parker of Waddington, in Registrar of Trade Marks v W. & G. Du Cros Ltd, (1913) 30 RPC 660, said that the question,
[M]ust, I think, largely depend upon whether other traders are likely, in the ordinary course of their business and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods.
Mr Kell also cited Kimberley-Clark Corporation v Registrar Of Trade Marks, 109 CLR 526 where McTiernan J held that the trade mark POP-UP was not allusory and that it had direct reference to characteristics of the goods; Sports Break Travel Pty Ltd v P & O Holidays Ltd, (2000) 50 IPR 51, where Burchett J held that SCHOOLIES was not inherently adapted to distinguish the applicant's transport, travel and advertising services; Re Application by J McGloin Pty Ltd, (1991) 22 IPR 669, where ORAL FRESH was refused because it was found to be descriptive of mouth washes and mouth fresheners; Re Application by Saramar Corp, (1999) 47IPR 645 where SHEER SUPPORT was refused for hosiery because it has no inherent adaptation to distinguish; Re Application by Beatrice Companies Inc, (1990) 18 IPR 265 where QUICKSEAL was held to be incapable of becoming distinctive; Re Application by For Eyes Optical Company, (1983) 2 IPR 381 where FOR EYES was refused for the retailing of optical goods; Seven Up Co v Bubble-Up Co Inc, (1987) 9 IPR 259, in which King J held that the words BUBBLE UP are not inherently adapted to distinguish beverages in class 32; Advanced Hair Studio of America Pty Ltd v Registrar of Trade Marks, (1988) 12 IPR 1 where the Full Federal Court held that HAIRFUSION had been properly refused for hair dressing and styling services; Re Application by CRC Industries (Aust) Pty Ltd, (1997) 38 IPR 429 where SO EASY was refused for tyre cleaning preparations; Health Assist (Vic) Pty Ltd v Proline Financial Services Pty Ltd, [2002] ATMO 11 where SURGERY NOW PAY LATER was found to be not capable of distinguishing the applicant's financial and monetary services; Re Application by Corvina Quality Foods Pty Ltd, (1991) 22 IPR 66 where AUSSIE DELIGHTS was refused for confectionery; and Enrique Bernat F, SA v Zeta Espaciel SA, where POPPING CANDY was refused for confectionery because it has no inherent adaptation to distinguish and the limited evidence of use of the trade mark by the applicant was insufficient to allow registration.
Note 1 to section 41 of the Act states that trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:
(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or
(b) the time of production of goods or of the rendering of services.
HAIR NO MORE is certainly descriptive so that potential customers would immediately know the nature of the goods without the need to conduct a search for meaning but it is not a sign 'that is 'ordinarily used' to indicate the nature, quality or characteristics of the applicant's goods. Terms that are ordinarily used to describe such goods are depilatories or hair removal creams or preparations. It is also relevant, I think, that syntactically the phrase, HAIR NO MORE, is unusual and for that reason is likely to fix itself in the memory whereas the more usual phrase 'no more hair' would not. I am satisfied that the trade mark has some inherent capacity to distinguish but not sufficient on that basis alone to distinguish the applicant's goods. I am obliged now to consider the trade mark under the provisions of subsection 41(5) and may take into account use of the trade mark, both before and after the priority date and any other circumstances.
I am satisfied the applicant's trade mark has been exposed by way of advertisements in specialist magazines and trade shows and bodybuilding shows to a niche market and that exposure has resulted in sales that although still modest indicate that the applicant's trade mark will come to distinguish the goods as those of the applicant. This ground of opposition has not been established.
Decision
None of the grounds of opposition relied on by the opponent has been established. Therefore, the applicant's trade mark may proceed to registration one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued.
Costs
The general rule in awarding costs is that costs are usually awarded against the unsuccessful party, unless there is some conduct on the part of the successful party that would justify a departure from the general rule. The applicant failed to give adequate notice of its inability to attend by telephone, the hearing scheduled for 28 October 2003. I therefore award costs against the opponent and direct that the opponent pay the costs of the applicant in accordance with the Official Scale (Schedule 8 of the Trade Marks Regulations 1995) except for those costs associated with preparation of the case for hearing and the opponent's attendance at the hearing scheduled for 28 October 2003. In respect of these two matters I direct that the trade mark applicant pay the opponent's costs.
Mary Skivington
Hearing Officer
Trade Marks Hearings
3 June 2004
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