Cels Enterprises, Inc v Pausewang Nominees Pty Ltd

[2005] ATMO 51

TRADE MARKS ACT 1995

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

Re:Opposition by Cels Enterprises, Inc to registration of trade mark application 937404(21, 35) - CHINESE LAUNDRY - filed in the name of Pausewang Nominees Pty Ltd.

Delegate:	Jock McDonagh
Representation:	Opponent: Barry Hess, instructed by Patent Attorney Services Applicant: Ben Fitzpatrick, instructed by Davies Collison Cave
Decision:	Section 52 opposition - grounds under sections 41, 42, 44 & 60 not established – registration allowed.  Costs awarded against the opponent.

Background

1. The applicant, Pausewang Nominees Pty Ltd, applied to register the following trade mark:

Application Number:

937404

Priority date:

 11 December 2002

Goods:

(as amended)

Class 21:  Household or kitchen utensils and containers (not of precious metal or coated therewith); glassware, porcelain     and earthenware not included in other classes

Class 35: Wholesaling and retailing of household goods including cooking and other utensils and containers, crockery and cutlery; fabrics; manchester including bath towels, washers, tablecloths, serviettes and bed linen including sheets, pillow cases, doonas and pillows; bathroom accessories including brushes, combs, soap dishes and toothbrush containers; toiletry products; furniture

Trade Mark:

chinese laundry

Advertised:

19 June 2003

1. The opponent, Cels Enterprises, Inc, filed notice of opposition to the trade mark's registration on 19 September 2003.  That notice listed variously 13 of the available grounds of opposition provided in the Trade Marks Act 1995 ("the Act"). 

2. The opponent duly served and filed evidence in support. The applicant did not serve or file any evidence.

3. By letter dated 19 May 2005, the opponent sought to serve and file further evidence in support of the opposition. By letter dated 1 June 2005, I advised that I did not intend to grant the request, but that I would entertain further submissions in respect of the proposed evidence at the hearing of the substantive matter.

4. The matter came to a hearing before me, as a delegate of the Registrar of Trade Marks, in Melbourne on 9 June 2005. Mr Barry Hess of counsel, instructed by Patent Attorney Services, Attorneys, represented the opponent. Mr Ben Fitzpatrick of counsel instructed by Davies Collison Cave, Attorneys, represented the applicant.

   Evidence

5. The evidence relating to the opposition consists of the following declarations:

Declarant	Date declared	Exhibits	Known As
Evidence in Support
Robert L. Goldman	18.02.04	RLG1	Goldman
Brendan Ainsworth	01.06.04	Ainsworth 1
John Pembroke Page	11.06.04	JPP1 – JPP11	Page
Guru Kahlon	30.06.04	Kahlon
Chris Zammit	09.07.04	PD-1 to PD-6	Zammit
Brendan Ainsworth	19.06.04	Ainsworth 2

1. The further evidence in support that the opponent sought to serve upon the applicant and file with this Office was an adverse examination report with respect to the opponent’s trademark application number 1041292 filed on 11 February 2005.  The trade mark examiner had cited the applicant’s registration number 406067 and the application 937404 against the registration and made some comments in respect of the cited marks.

2. Counsel for the opponent referred to Ladd v Marshall (1954) 1 WLR 1487 as providing the relevant criteria to be applied in respect of further evidence. These criteria are:

   ·     it should be shown that with reasonable diligence the evidence could not have been obtained earlier

   ·     it should be shown that the evidence is likely to have an important effect on the outcome

   ·     the evidence should be credible

3. Counsel for the opponent stated that the first examination report was not received by the opponent until 9 May 2005.  He stated that the report was relevant to grounds of opposition, especially with regard to similarity of goods.  He further stated that the credibility of a trade mark examiner’s opinion regarding such matters must be considered as at a high level.

4. Counsel for the applicant made strenuous submissions that the further evidence should not be allowed.  He was particularly concerned about a policy issue that he considered arose where it appeared that the opponent had applied for a trade mark for the purposes of obtaining an adverse examination report to be used in evidence.  Mr Fitzpatrick also submitted that the opinion of a trade mark examiner in respect of the opponent’s application was not relevant to the opposition matter.  Alternatively, if the evidence were allowed, it should be given no weight, because it is merely opinion, an unreliable guide and well after the priority date of the applicant’s mark.

5. Despite the helpful and erudite submissions from counsel for the opponent, I maintain my refusal to accept the further evidence.  The evidence did not come into existence until more than two years after the priority date and over one year after the notice of opposition was filed.

6. The opinion of a trade mark examiner in a first examination report is not likely to have an important effect on the outcome, because it is not relevant to these proceedings.  Additionally, while I have no evidence to support a conclusion that the opponent filed application 1041292 for ulterior or collateral motives, I agree that it would be an unwise policy to accept evidence such as that proposed so late in proceedings.

   Grounds of Opposition

7. In its notice of opposition the opponent set out variously 13 grounds of opposition.  However, at the hearing the opponent only pressed four grounds of opposition as follows:

   ·Section 44 (ground seven)

   ·Section 60 (ground 12)

   ·Section 42 (ground five)

   ·Section 41 (ground three)

   Onus

8. It was common ground at the hearing that the onus lay with the opponent to establish its grounds of opposition to my satisfaction, and unless one or more of the grounds was so established then the application would proceed to registration.

   Section 44 – Identical etc Trade Marks

9. To establish the s44 ground, the opponent must establish all of the following:

   ¨   At the priority date

   ¨   there was a substantially identical or deceptively similar trade mark application or registration

   ¨   in respect of similar goods or closely related services

   ¨   in the name of a person other than the applicant.

10. The opponent cited its prior registration 937250 chinese laundry for goods in Class 25 comprising footwear being shoes and boots.

11. For the opponent to succeed on this ground it must, therefore, satisfy me that ‘footwear being shoes and boots’ are similar goods to those of the applicant, or closely related to its services.

12. The opponent submitted that footwear being shoes and boots can be considered to be household goods, wholesaling and retailing of household goods being part of the applicant's class 35 statement of services.

13. It was submitted that the evidence established that there is no marketplace awareness of the applicant or any trade by the applicant under or by reference to the opposed trade mark.  It was further submitted that use by the applicant of the chinese laundry trade mark on retail premises selling certain goods within the application would cause confusion as to trade source by reference to the opponent or its Australian distributor.

14. Counsel for the applicant cited Kenny J. in McCormick & Co Inc v McCormick (2000) 51 IPR 102, wherein he noted and approved the accepted tests established in Re: Jellneck’s. application (1946) 63 RPC 59. In summary the assessment must consider the nature of the goods, the uses thereof, and the trade channels through which they are bought and sold. No single consideration is conclusive in itself. The fact that goods occupy the same trade channels is not, in itself, necessarily sufficient for a finding that goods are of the same description.

15. The applicant submitted that the nature and purpose of shoes and boots and household goods are profoundly different.  The respective goods are not usually made by the same persons, nor are they generally sold in the same outlets.  It was submitted that they have entirely different purposes: shoes and boots are for wearing on feet, while household goods such as kitchen utensils and containers are not for personal adornment or protection of feet. 

16. It is common knowledge that ‘brand extension’ exists in the marketplace. While the evidence satisfied me that such brand extension can flow from footwear to clothing and fashion accessories, I am not satisfied that it is likely to flow from footwear to household goods.

17. I am not satisfied that the applicant's goods are similar to those of the opponent's prior registration, and the applicants services are not closely related.  Indeed, to so conclude would be contrary to existing authority.  Therefore I dismiss this ground of opposition.

    Section 60 - Prior Reputation

18. To satisfy section 60, the opponent has the burden of establishing the following elements:

    ¨   a pre-existing trade mark;

    ¨   substantial identity or deceptive similarity between the applied-for trade mark and the pre-existing trade mark;

    ¨   the acquisition of a reputation in Australia by the pre-existing trade mark; and

    ¨   a likelihood that, because of that reputation, use of the applied for trade mark would be likely to deceive or cause confusion.

19. I am satisfied that the opponent’s trade mark was being used in Australia before the priority date.  It is obvious that the opponent’s mark is identical to that of the applicant. 

20. The next question in respect of the section 60 ground, is whether the opponent has shown a sufficient reputation in its trade mark to satisfy the requirements of subsection 60 (b), such that the reputation is wide enough that deception and confusion is likely. The reputation must be shown to have existed at the priority date.

21. It is not necessary to prove reputation by direct evidence of consumer appreciation; it is commonplace to infer reputation from a high volume of sales, together with substantial advertising and other promotions: McCormick & Co Inc v McCormick, supra.

22. Reputation in Australia must still be established as a question of fact - per Lockhart J in Conagra Inc v McCain Foods (Aust) Pty Ltd, (1992) 23 FCR 302.

23. The opponent relied upon the Goldman and Page declarations to establish reputation arising from sales and advertising and promotional expenditure. 

24. Counsel for the applicant submitted that the opponent had not established the requisite threshold degree of reputation to satisfy section 60 having regard to the particular goods in class 21 and the particular services in class 35 under the amended application.

25. While the Goldman declaration provides an informative background to the worldwide activities of the opponent, it does not provide any relevant material to establish reputation in Australia prior to the applicant's priority date.

26. The Page declaration does provide some details of sales advertising and promotional expenditure in Australia; however, there is a lack of particularisation of those details with respect to the applicant's priority date.  The evidence spans a period from some time in 1998 to June 2004, is couched in general terms, and does not attribute any particular sums to any particular period before the priority date.

27. To the extent that the opponent may have established by the Goldman and Page declarations some degree of reputation in the trade mark chinese laundry in Australia, it would only be in respect of footwear.

28. On the basis of the evidence before me, I am not satisfied that the requisite reputation existed at the relevant date. Accordingly this ground of opposition has not been established.

    Section 42 - Trade mark use contrary to law

29. Following the decision of Madgwick J in Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, the Registrar is obliged, when assessing whether use would be contrary to law under s.42(b), to take into account the operation of laws and legislation other than the Trade Marks Act 1995. Here, the opponent alleges that use of the trade mark would constitute misleading or deceptive conduct to contrary to the Trade Practices Act 1974 (“TPA”).

30. The opponent submitted that the evidence supporting its ss44 and 60 grounds established that there is, or would be, a real possibility that a reasonably significant number of persons would be misled or deceived if the opposed trade mark were to be used by the applicant on retail premises and in relation to certain goods.

31. In Equity Access Pty Limited v Westpac Banking Corporation (1989) 16 IPR 431 at 440-442, Hill J formulated a number of propositions as relevant to a determination of whether a contravention of s52 was made out in a name/getup type case, which can be summarised as follows:

    (a)for conduct to be misleading or deceptive it must convey in all the circumstances of the case a misrepresentation;

    (b)there will be no contravention of s52 unless the error or misconception results or would be likely to result from the conduct of the corporation and not from other circumstances for which the corporation is not responsible;

    (c)conduct will be likely to mislead or deceive if there is a ‘real or not remote chance or possibility’ of misleading or deception, regardless of whether it is more or less than 50%;

    (d)conduct causing mere confusion or uncertainty in the minds of the public, in the sense that there may be cause to wonder whether two products or services have come from the same source, is not necessarily co-extensive with misleading or deceptive conduct.  The court must consider whether a reasonably significant number of potential purchasers would be likely to be misled or deceived.  However, it is not necessary to show that all or substantially all persons in the market associate the name with the applicant/plaintiff’s goods/services, if this can be shown of a substantial proportion of persons who are probably purchasers of the goods of the kind in question;

    (e)the applicant/plaintiff must establish that it has acquired the relevant reputation in the name, that is to say that the name has become distinctive of the applicant’s business or goods in a particular country or geographical area (the area may be local or Australia wide);

    (f)section 52 is not confined to conduct which is intended to mislead or deceive, and a corporation that acts honestly and reasonably may nonetheless engage in conduct that is likely to mislead or deceive.

32. These principles have been restated by the Full Court of the Federal Court in S&I Publishing Pty Limited v Australian Surf Lifesaver Pty Limited (1998) 168 ALR 396 at 402 - 403.

33. The misrepresentation need only be likely to mislead.  There is no requirement that actual deception be proven: Sydney Wide Distributors Pty Limited v Red Bull Australia Pty Limited (2002) 55 IPR 354 at [62]. It is no bar to succeeding in an action for contravention of s52 that there is no consumer evidence of deception. Indeed where there has been no use of an applicant’s trade mark application there can be no evidence of deception.

34. Section 52 TPA is designed to protect consumers. It is a contravention of s52 if a misrepresentation is conveyed by the use of the mark that there is an association of some kind between the supplier of the goods in respect of which the mark is sought to be registered and the user of the opponent’s marks; that the goods to be supplied under or by reference to the marks are in 'some way' promoted or associated with the opponent or provided with the opponent’s consent or approval, when in fact they are not: see Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 49 IPR 303 at [40], [57] & [59].

35. In the Advantage Rent-A-Car case, Madgwick J confirmed that the test to be satisfied was that use would, rather than could, be contrary to law.  Therefore, I am to determine, on the balance of probabilities, and on the basis of a hypothetical case which takes into account all the evidence and submissions before me, whether use of the applied-for trade mark in respect of the applicant’s goods would involve the misleading or deception alleged.

36. I have already determined that the opponent has failed to establish the requisite reputation in respect of section 60.  Likewise, I am not satisfied that the evidence has established that the opponent has acquired the relevant reputation in the name chinese laundry, such as to support this ground.  Consequently this ground of opposition has not been established.

    Section 41 - Capable of Distinguishing

37. Section 41 provides for the assessment of the capability of trade marks to distinguish the designated goods or services of one trader from the goods or services of other persons. The initial step is provided for, in terms of subsection 41(3):

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

38. The classic statement of the test involved is that of Kitto J in Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 at 514:

    [T]he question whether a mark is adapted to distinguish [is to] be 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 connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.

39. Counsel for the opponent submitted that the plain words of the trade mark were descriptive and would be words that ordinary traders without improper motive would wish to use.  It was suggested, for example, that manchester-type goods  required laundering.

40. There is nothing in the evidence, however, to show that chinese laundry has any direct meaning in respect of household or kitchen utensils and containers (not of precious metal or coated therewith); glassware, porcelain and earthenware not included in other classes, or wholesaling and retailing of household goods including cooking and other utensils and containers, crockery and cutlery; fabrics; manchester including bath towels, washers, tablecloths, serviettes and bed linen including sheets, pillow cases, doonas and pillows; bathroom accessories including brushes, combs, soap dishes and toothbrush containers; toiletry products; furniture. The connection between manchester goods and laundries is far too remote to be taken seriously.

41. I find, therefore, that I am not satisfied that the applicant's mark chinese laundry is not capable of distinguishing the goods and services nominated in the application. I find that the opponent has not established this ground of opposition.

    Decision

42. The opponent has not established its grounds of opposition. 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

43. The applicant sought its costs.  I see no reason why costs should not follow the general rule. I 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).

    Jock McDonagh
    Hearing Officer
    Trade Marks Hearings
    30 September 2005