Chi-Chi's Inc v George Lambropoulos

[2000] ATMO 124

TRADE MARKS ACT 1995

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

Re:Opposition by Chi-Chi's Inc. to registration of trade mark application 733805(25) - CHI CHI - filed in the name of George Lambropoulos.

Background

Mr George Lambropoulos (the applicant) made application to register the trade mark chi chi in class 25 on 5 May 1997. The trade mark was advertised as accepted in the Australian Official Journal of Trade Marks of 16 October 1997. The specification of goods includes goods in class 25 and reads as follows - Clothing, footwear, headgear.

Chi-Chi's Inc. (the opponent) filed notice of opposition, within the three-month statutory period, on 16 January 1998. The opponent listed a total of seven grounds of opposition, encompassing sections 41, 42(b), 43, 44, 58, 59, and 60 of the Trade Marks Act 1995 (the Act). The opponent's evidence in support was served on 26 July 1999 and consists of a single statutory declaration with exhibits from Michael Evans Malanga, Vice President of the opponent.

The applicant served evidence in answer to the opposition on 28 February 2000. The applicant's evidence consists of a statutory declaration with exhibits from the applicant himself, George Lambropoulos.

No additional evidence was served during the proceedings and no written submissions were received. Both parties waived their right to be heard in the matter and it has now come before me, as a delegate of the Registrar, to be decided on the basis of the material currently on file.

The Evidence

The opponent's evidence goes to show the extent of its reputation worldwide, in respect of its trade mark(s). Sales and advertising figures for various years have been provided, as well as details regarding the opponent's existing trade mark registrations.

The opponent's Australian registrations for the trade mark chi-chi's include registration numbers 400203, 400204, 400205 and 762665. The first three registrations date from 21 November 1983 and each comprises the trade mark in a stylised form, as follows:

The latter registration, 762665, dates from 21 April 1998 and includes the word chi chi's in plain script. Collectively, and in general, the registrations cover food items in classes 29 and 30, as well as restaurant, catering and take away services in class 42. The opponent also has various trade mark registrations in the United States and worldwide, which include registrations for items of clothing in International class 25.

It is evident that the opponent uses its trade mark through its chain of franchise restaurants, which originated in the United States in 1976. Clothes, along with other licensed products, bearing the trade mark are available from the opponent's franchise restaurants. The total number of restaurants in the United States is now 152, across 20 American states. Franchises have also been established outside the USA in Belgium, France, Germany, Indonesia, Kuwait, Luxembourg, United Arab Emirates and the United Kingdom. The declarant states that it is the opponent's intention to establish franchise restaurants within Australia. As part of its promotion of the franchise, the opponent has attended a number of franchise conventions in various countries (outside of Australia).

Sales and advertising figures, outside of Australia, are provided for the years 1994 to 1999. Both sales revenue and advertising expenditure are listed in excess of tens and, in some cases, hundreds of millions of dollars (US$) per year. Sales figures for licensed products, which include clothing, are given for the period 1998-1999 only. The sale of these items totals (for this period) in excess of tens of millions of (US$) dollars.

The opponent established a web site in early 1997, specifically designed to enhance trade on a global basis, including Australia. The opponent has recorded approximately 300 hits from Australia, in regards to its Home Page, since the establishment of the web site.

On the basis of this material, the opponent asserts that use of the applicant's trade mark chi chi is likely to indicate a connection between the opponent and the applicant and thus mislead and confuse the purchasing public.

Turning now to the applicant's evidence in answer, the applicant declares that he is the owner of a business trading as CHI CHI Cosmetics. The trade mark chi chi was first used by him in March 1996, in respect of cosmetics. The trade mark first appeared in respect of clothing through promotion of the applicant's cosmetic products. T-shirts, which displayed the trade mark, were offered free with the purchase of particular chi chi cosmetics. The applicant declares that such T-shirts have also been sold separately since mid 1998. In March 1998, the applicant took part in Melbourne Fashion Week, where it displayed (as part of the Grenville Street Parade) 30 styles of T-shirts bearing the trade mark.

It appears that the applicant's cosmetics bearing the trade mark have had considerable exposure Australia wide, through periodicals such as Cosmopolitan, Cleo, Dolly, Mode and Harpers Bazaar (to name just a few). The products are sold in over 235 stores nationally, including Myer Department stores. No details of sales or advertising figures have been provided in respect of the applicant's products bearing the trade mark.

Discussion

The notice of opposition lists seven grounds relating to sections 41, 42(b), 43, 44, 58, 59, and 60 of the Act. However, I have inferred from the opponent's evidence that only those grounds pursuant to sections 44 and 60 have been properly addressed. I believe that the remaining grounds cited by the opponent in its notice of opposition have not been properly addressed in the evidence. I find, therefore, that the opposition is not successful in relation to them. I do not intend to comment further on those grounds, which have not been properly addressed, except to refer briefly to the opponent's claim that the applicant's trade mark is not capable of distinguishing. I will then discuss those grounds relevant to sections 44 and 60 of the Act.

Section 41 - Trade mark not distinguishing the applicant's goods and services

Under this ground, the declarant for the opponent asserts that the application trade mark is not capable of distinguishing the applicant's goods, because of the use the opponent had already made of its mark.

However, the capability of a trade mark to distinguish the goods of a particular trader is not assessed by any comparison with the use that another trader is making, or has made, of a trade mark. It is assessed by a consideration of the mark alone, in relation to the goods upon which the mark is to be used. The fact that another trader may claim that the mark distinguishes their particular goods or services is not a matter for consideration under s.41. The declarant's remarks, in this regard, are more appropriate to the considerations to be made under section 60 of the Act.

Section 44 - Identical etc. trade marks

The present application is in respect of goods rather than services and the relevant subsections of section 44 read:

Identical etc. trade marks

44.(1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of goods (applicant's goods) must be rejected if:

(a) the applicant's trade mark is substantially identical with, or deceptively similar to:

(i) a trade mark registered by another person in respect of similar goods or closely related services; or
(ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

(b) the priority date for the registration of the applicant's trade mark in respect of the applicant's goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

Note 1:  For deceptively similar see section 10.

Note 2:  For similar goods see subsection 14(1).
Note 3:  For priority date see section 12.

(3) If the Registrar in either case is satisfied:

(a) that there has been honest concurrent use of the 2 trade marks; or
(b) that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.

Note:  For limitations see section 6.

(4) If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant's trade mark for a period:

(a) beginning before the priority date for the registration of the other trade mark in respect of:

(i) the similar goods or closely related services; or
(ii) the similar services or closely related goods; and

(b) ending on the priority date for the registration of the applicant's trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

Note 1:  An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).

Note 2:  For predecessor in title see section 6.
Note 3:  For priority date see section 12.

The legislation, as set out above, gives rise to three main considerations - the similarity or otherwise of the respective trade marks; the similarity or otherwise of the respective goods associated with those trade marks; and the dates of priority of those trade marks.

In assessing whether two competing trade marks are similar, a determination must be made as to whether the trade marks are either substantially identical or deceptively similar. The rules of comparison, for determining substantial identity, are outlined in such cases as Australian Woollen Mills[1] and Shell Co of Australia v Esso Standard Oil[2], where, in the latter case, Windeyer J said, at 414-415: (in relation to substantial identity):

[1] Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641.

[2] Shell Co of Australia v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407.

(The marks should) be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.

The applicant's trade mark consists of the word(s) chi chi in plain script. In comparison, the trade mark registrations, in Australia, relied upon by the opponent include the word(s) chi chi's in both a stylised version and plain script. Registration 762665, which contains the representation of the mark in plain script, has a later priority date than that of the subject application and cannot, therefore, be considered under the provisions of section 44.

In terms of the accepted test for substantial identity, I do not consider the applicant's trade mark, on a side by side comparison, to be substantially identical with the opponent's trade mark as it appears in stylised script. Notwithstanding the similarity between the marks, the differences between them are sufficiently defined that, when placed side by side, I believe consumers would readily differentiate between the two marks.

In regard to deceptive similarity, however, the comparison to be made is one of impression and general recollection. Section 10 of the Act defines a trade mark as being deceptively similar to another trade mark if it so nearly resembles that mark that it is likely to deceive or cause confusion. The tests for determining whether two marks are deceptively similar are, again, conveniently laid out in Australian Woollen Mills v F. S. Walton and Shell v Esso, both supra, where in the latter case Windeyer J said at 415 (in relation to deceptive similarity):

The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's television exhibitions.

In the recent Federal Court decision of Registrar of Trade Marks v Woolworths Ltd[3], with reference to Smith Hayden and Co's Application[4], Justice French said, at 426, that

[3] Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411.

[4] Smith Hayden & Co's Appn (1946) 63 RPC 97.

The position now is that the Registrar and the Court at first instance would need to be satisfied that there is a reasonable likelihood of deception or confusion before denying acceptance of the application for registration.

To compare the trade marks in question, both the applicant's and opponent's trade marks contain the word(s) CHI CHI. The opponent's trade mark chi chi's differs only in the sense that it is the possessive form of the word(s). This parallel creates a similarity in impression or idea (of the marks), which is not undermined by the manner in which the opponent's trade mark is rendered. The visual element, resulting from the stylised script used by the opponent, is not out of the ordinary and does not override the aural similarity of the marks. It has long been judicially recognised that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail, than by any photographic recollection of the whole.[5]

[5] de Cordova v. Vick Chemical Co ( 1951) 68 RPC, at p 106

In light of the accepted rules of comparison, it is difficult to attribute a great deal of dissimilarity between the marks to the visual component of the opponent's mark. I find, therefore, that the applicant's trade mark is deceptively similar to the trade mark the subject of registrations 400203, 400204 and 400205.

The grounds under section 44, however, may only succeed if the applicant's goods and those goods and services encompassed by the opponent's registrations are considered similar and/or closely related. The expression 'similar goods' is defined in note 2 of section 44(1) of the Act (by reference to subsection 14(1)). Here, the Act confirms that goods are similar to other goods if they are the same as the other goods, or if they are of the same description as that of the other goods.

In this regard, the standard tests first established by Romer J. in Jellinek's Application[6] remain as relevant tests, viz. the nature of the goods, the uses thereof, and the trade channels through which they are bought and sold. No single consideration is convincing in itself and it is also the case that the classifications contained in the schedules to the Trade Marks Regulations are not a definitive criterion as to whether or not two sets of goods are 'of the same description'.

[6] Jellinek's Application (1946) 63 RPC 59;

To compare the goods/services in question, the opponent's registrations cover, in general, food items in class 29 and 30 and related food services in class 42 (ie. Restaurant, self-service restaurant, take-away food, canteen and catering services). In comparison, the applicant seeks registration of its trade mark in respect of clothing, footwear and headgear in class 25. Comparing, in the first instance, the relevant sets of goods - in terms of the criteria set out in Re: Jellinek's Application, supra, - leads me to conclude that the nature, uses and trade channels of the two sets of goods are noticeably distinct. I find, therefore, that the opponent's goods (in classes 29 and 30) are not similar to those goods for which the applicant seeks registration.

The concept of "closely related services", in respect of an application for goods, is not defined in the Act and involves somewhat different considerations to those in respect of "similar goods" or "similar services". The term "closely related" recognises goods and services as different things.[7] The relationship between goods and services will, in most cases, be defined by the function of the service with respect to the goods. For example, services that provide for the installation, maintenance or repair of goods are likely to be treated as closely related to those goods.

[7] Registrar Of Trade Marks v Woolworths Ltd (1999) 45 IPR 411 at 424

To compare the function of the opponent's services in class 42 with respect to the application goods in class 25, the function of restaurant and take-away food services (and the like) is not, to any extent, related to clothing, footwear and headgear. The opponent claims that it retails items of clothing, as part of its range of licensed products and, although it is not uncommon for manufactures promote their service and/or goods in this manner, little weight can be afforded to this fact. It is obvious, in my opinion, that the services provided by the opponent do not ordinarily, or by necessity, feature items of clothing. I find, therefore, that the opponent's services are not closely related to the goods for which the applicant seeks registration.

Having found that the opponent's goods and services are not similar, or closely related, to the applicant's goods, I find that the grounds of opposition pursuant to section 44 of the Act fail.

Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

Section 60 provides that

60. The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had acquired a reputation in Australia; and
(b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

Note 1:  For deceptively similar see section 10.

Note 2:  For priority date see section 12.

Central to the provisions of section 60 is the definition of 'deceptively similar', provided by section 10 of the Act as follows (previously mentioned in discussion of section 44):

Definition of deceptively similar

10. For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

I must first determine, under paragraph 60(a), whether the applicant's trade mark is either substantially identical with, or deceptively similar to, a trade mark that has built up a reputation in Australia before the priority date of the present application - 5 May 1997. Subsequently, under paragraph (b), I am required to consider whether, in view of the reputation connected with that trade mark, use of the applicant's trade mark would be likely to deceive or cause confusion.

In considering the section 44 ground, I have come to the conclusion that the threshold test in relation to s.60 has been met by the opponent, i.e. that the applicant's mark is deceptively similar to, the opponent's trade mark. Consideration must now be given to the repute of the opponent's mark, as at the application date of the present application.

The opponent first began using its trade mark in 1976 in the United States, with sales over the period of 1994 to 1997 totalling some several hundred million dollars ($US). The marketing of the trade mark is almost as impressive, in respect of advertising expenditure. In terms of a broader recognition of the trade mark, I note that all but one of the promotional conventions attended by the opponent took place post filing of the present application. Nevertheless, the opponent's evidence does indicate that the majority of its franchise restaurants, outside of the United States, were opened prior to 1997. Furthermore, the opponent has declared its intention to enter the Australian market. However, there is no evidence that the opponent has acted on this intention, so as to create an impression on potential purchasers within Australia.

The opponent also attests to the establishment of a web site in early 1997 and that, to date, there have been approximately 300 hits from Australia since its inception. I must comment, here, that the web site, for the most part, existed post filing (of the subject application) and that 300 hits over a period of approximately two years (1997-1999) is not, in my view, significant.

On the whole, I consider that the opponent's evidence establishes that it has, through its chain of franchise restaurants, a significant presence within the United States and, with that, a reputation connected with its trade mark in that country. This reputation appears to extend, to a lesser extent, to various countries outside of the United States. Notwithstanding the reputation that exists in the mark within the United States and throughout a limited number of other countries, I do not accept that the evidence conveys any notable reputation in the mark for the opponent within Australia.

In order to support opposition based on section 60, the opponent must first establish reputation in the mark, in respect of the relevant goods or services before the priority date. Consideration may then be given to the question as to whether, having regard to that reputation, use of the applicant's mark was likely to cause deception or confusion amongst the purchasing public. In the present case, I have found that the opponent has not sufficiently demonstrated a reputation in its mark. I will not, therefore, go on to consider whether there exists an association between the relevant goods/services, which would be likely to deceive or cause confusion (as contemplated by section 60).

In light of the foregoing, I find that the grounds of opposition pursuant to section 60 of the Act do not succeed.

Conclusion

As a delegate of the Registrar, I have found that the opponent has not established any of the grounds listed in the notice of opposition. I therefore dismiss this opposition and direct that application 733805 proceed to registration.

Michelle Edlington

A/Hearing Officer

20 November 2000