Choice Hotels International Inc v Australian Consumers' Association

[2002] ATMO 52

TRADE MARKS ACT 1995

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

Re:Opposition by Choice Hotels International Inc. to registration of trade mark application 756378 (16, 35, 38, 41 & 42) - CHOICE TRAVEL - filed in the name of Australian Consumers' Association.

Background

Trade mark application number 756378 is an application to register the words choice travel for goods and services in the following classes:

Class 16: Magazines, books, printed matter, printed publications, photographs, postcards, periodicals, newspapers, paper goods, advertising material made of paper or cardboard; teaching materials in this class; directories, pamphlets, annuals, catalogues; all of the foregoing goods relating to travel, travel services and consumer issues

Class 35: Business information, business research; direct mail advertising, dissemination of advertising matter; research services in this class; information services relating to business and commerce; all of the foregoing services relating to travel, travel services and consumer issues

Class 38: Telecommunication services; electronic information services including provision of news, information, classifieds press releases, archival information, display advertising and related information; electronic information services provided by on-line subscriptions, on-line subscription services; electronic mail network; all the foregoing services relating to travel, travel services and consumer issues

Class 41: Publishing services including publication of magazines, texts, printed matter, printed publications, photographs, postcards, periodicals, newspapers via the Internet, electronic mail, direct mailing and ordinary mail; newspaper and magazine subscriptions; information provided on-line and by other means related to education, entertainment, recreation, sports and cultural events; publication of books; recreational information services; all the foregoing services relating to travel, travel services and consumer issues

Class 42: Information provided on-line and by other means related to computers, including computer software, on-line computer services, computer hardware; all of the foregoing services relating to travel, travel services and consumer issues

The application was filed on 3 March 1998 ("the relevant date") by the Australian Consumers' Association of Marrickville, New South Wales ("the applicant"). 756378 was duly examined and, on 2 September 1999, the Registrar advertised, in the Australian Official Journal of Trade Marks, that he had accepted this trade mark for registration.

On 23 March 2000, in accordance with Part 5 of the Trade Marks Act 1995 ("the Act"), Choice International Inc. of Silver Spring Maryland in the United States of America ("the opponent") filed opposition to the registration of 756378.

The opponent listed 13 ground of opposition in its notice of opposition. However, at the hearing it relied on three grounds of opposition as follows:

1. the applicant's trade mark is deceptively similar to the opponent's choice hotels trade mark;

2. registration of the applicant's trade mark would be contrary to section 41 of the Act in that the applicant's trade mark is not capable of distinguishing the applicant's goods and services;

3. the applicant's trade mark is deceptively similar to the opponent's trade mark which, before the priority date for the registration of the applicant's mark, had acquired a reputation in Australia; and because of the reputation of the opponent's trade mark, use of the applicant's trade mark would be likely to deceive or cause confusion;

The opponent served on the applicant, and filed with the Trade Marks Office, two statutory declarations as evidence in support of its opposition.

On 16 October 2001, the applicant served on the opponent, and filed with the Trade Marks Office, a notice stating that the applicant does not intend to rely on evidence in answer to the opposition.

The matter came before me as a delegate of the Registrar of Trade Marks for hearing in Canberra on 1 March 2002. The opponent was represented by Mr Peter Chalk of Blake Dawson Waldron of Melbourne. The applicant did not appear, but relied on written submissions.

Evidence

The evidence comprised the following statutory declarations:

• Michael DeSantis, Senior Vice President and General Counsel, dated 31 July 2001, comprising exhibits MDS-1 to MDS-9 ("DeSantis); and

• Christopher Warren Ritchie, Company Secretary Flag Choice Hotels, dated 8 August 2001, comprising exhibits CRW-1 to CRW-9 ("Ritchie").

Submissions, Considerations and Findings

Ground 1: Section 44 - Deceptive Similarity

Section 44, in so far as it is relevant, reads:

Identical etc. trade marks

(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.

Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

The opponent's trade mark has a priority date of 3 July 1995, which is earlier than the applicant's trade mark.

The matters for determination are therefore:

(a)whether the applicant's mark is substantially identical with, or deceptively similar to the opponent's registered trade mark in that it so nearly resembles that mark that it is likely to deceive or cause confusion (Section 10); and

(b)whether the opponent's trade mark is registered in respect of similar services or closely related goods.

The first issue to determine, therefore, is whether choice travel is substantially identical with, or deceptively similar to choice hotels.

The proper comparison for substantial identity is that described in Shell Company of Australia Ltd v ESSO Standard Oil (Australia) Ltd[1], where Windeyer J states:

[1] (1963) 109 CLR 407 at 414

In considering whether marks are substantially identical, they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential feature of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.

The competing marks both commence with the word choice. The difference between the marks is the words travel and hotels. The opponent submitted that these words are descriptive of services that are closely related and should, therefore, be considered to be substantially identical.

I note that in Carnival Cruise Lines Inc v Sitmar Cruises Ltd[2], funship was found not to be substantially identical to sitmars funship and fairstar the funship. I am of the opinion that the marks are not substantially identical. While choice is common to both, the descriptor is sufficiently different to provide a total impression of dissimilarity.

[2] (1994) 31 IPR 375 at 391 ("Carnival Cruise Lines")

The tests for deceptive similarity lie in the words of Windeyer J in Shell Company of Australia Ltd v ESSO Standard Oil (Australia) Ltd, supra:

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.  To quote Lord Radcliffe again (de Cordova v Vick Chemical Co (1951) 68 RPC 103; at 106; 1B IPR 496; at 499):

The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him…It is more useful to observe 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.

And in Australian Woollen Mills Ltd v FS Walton & Co Ltd[3]; Dixon and McTiernan JJ said:

[3] (1937) 58 CLR 641 at 658 ("Australian Woollen Mills")

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 High Court in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd[4] said that deceptive similarity is established if:

[4] (1954) 91 CLR 592

[t]here is a real risk that the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products came from the same source.

As to what is meant by "some persons", I note that in a recent decision of this Office, Kellogg Company v Exxon Corporation, (2001) ATMO 67, Hearing Officer Williams made the following observation in this regard:

In Registrar of Trade Marks v Woolworths, supra, French J said something of s 44 that is, with modification, applicable to s 60. That was, deleting words that are inappropriate to s 60:

A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or ... services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.

It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.

I do not believe that French J was suggesting, in referring to "some people", that it would be sufficient if a mere handful of people would be left in doubt. Firstly, I do not believe that he was attempting to modify his previous stipulation, for which there is long-standing authority in a case to which he had just referred, that the doubt that must afflict the " ordinary" person must be a "reasonable" one. Secondly, the formulation requiring that the number of people affected by doubt or confusion be " substantial" has been repeatedly endorsed. The onus has shifted, but not the benchmark. The latter comes from Smith Hayden's Application and Kendall Company v Mulsyn Paint and Chemicals, where Kitto J repeated and expanded what he said in Southern Cross. He added the reference to " substantial" as an express adoption of that formula from comparable UK decisions subsequent to Smith Hayden.

Based on these criteria and the statutory definition, I am satisfied that choice travel is deceptively similar to choice hotels. In my opinion there is a real risk that a number of persons of imperfect recollection would be caused to wonder that the two products came from the same source.

The second limb of the ground to be considered is whether the opponent's trade mark are registered in respect of similar services or closely related goods. Section 14 of the Act provides that goods (or services) are similar to other goods (or services) if they are the same, or of the same description as the other goods (or services).

The question of whether the goods of the parties are goods of the same description is resolved by reference to guidelines in decisions such as Southern Cross Refrigerating Co v. Toowoomba Foundry Pty. Ltd.[5], at 606, where Dixon, McTiernan, Webb, Fullagar and Taylor JJ said of the expression:

[5] (1954) 91 CLR 592

The fact that examination of the nature of the applicant's goods may, by itself, induce an observer to conclude that they are different in character from those of an opponent, and designed to serve different purposes, is by no means conclusive. Nor is the fact that the applicant's goods are not specified by the regulations as being within the same class of goods: see In re The Australian Wine Importers Ltd. (1889) 41 Ch D 278, at p 291 and Reckitt & Colman (Australia) Ltd. v. Boden per Latham C.J. (1945) 70 CLR 84, at p 90. There may be many matters to be considered apart from the inherent character of the goods in respect of which the application is made and some indication of what matters are relevant to this inquiry was given by Romer J. in In re Jellinek's Application (1946) 63 RPC 59. Romer J. thought it necessary to look beyond the nature of the goods in question and to compare not only their respective uses but also to examine the trade channels through which the commodities in question were bought and sold. Shortly after the decision in Jellinek's Case (1946) 63 RPC 59 the Assistant-Comptroller elaborated on the observations of Romer J. in the following manner: "In arriving at a decision upon this issue the reported cases show that I have to take account of a number of factors, including in particular the nature and characteristics of the goods, their origin, their purpose, whether they are usually produced by one and the same manufacturer or distributed by the same wholesale houses, whether they are sold in the same shops over the same counters during the same seasons and to the same class or classes of customers, and whether by those engaged in their manufacture and distribution they are regarded as belonging to the same trade. In the case of Jellinek's Application (1946) 63 RPC 59, Romer J. classified these various factors under three heads, viz., 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, and it has further been emphasized that the classifications contained in the schedules to the Trade Marks Rules are not a decisive criterion as to whether or not two sets of goods are 'of the same description'": In re an Application by John Crowther & Sons(Milnsbridge) Ltd. (1948) 65 RPC 369, at p 372.

Class 35 generally covers advertising, business management, business administration, and office functions. The opponent's statement of services specifies:

Services in this class relating to franchising hotels and motels, marketing services, personnel management consulting, business management and organization consulting, provision of efficiency experts, all of the above services provided in connection with hotels and motels.

The DeSantis declaration states that the opponent is a franchisor of hotels and motels. The opponent's Australian subsidiary is Flag Choice Hotels Limited, which manages the franchisee hotel chains flag, clarion, comfort and quality.

It appears from the evidence that typical trade channels for the registered services are those involving the opponent, its Australian subsidiary, and franchisee hotels/motels and prospective franchisees. This is shown, for example, in the DeSantis declaration Exhibit MDS-4 showing the opponent's advertising in The Australian Motelier a hotel/motel/resort trade magazine. Such trade channels in general would not necessarily include the end-users of the franchisees' goods and services, and probably not include them at all.

The majority of the evidence and submissions provided by the opponent seemed be concentrating on the similarity or close relation between hotel/motel services and travel-related goods and services. With respect, while that proposition might be arguable, it is not relevant to the services here.

The applicant did not file or serve any evidence in these proceedings and the written submissions were largely unhelpful in respect of this limb of the issue. However, I am of the opinion that I am entitled to infer from the applicant's statement of goods and services that the major users of goods and services such as these will be the ordinary consumer, and that the relevant trade channels will involve those consumers, the applicant, and providers of accommodation, transportation, tours, insurance and the like.

I have considered the nature of the respective goods and services, the uses of the goods and services, and the trade channels through which they are supplied. I am not satisfied that the opponent's trade mark is registered in respect of similar or closely related services. Therefore this ground of opposition fails.

Ground 2: Section 41 Ground - Mark Not Capable of Distinguishing

The opponent submitted that the applicant's trade mark should not have been accepted for registration. This was because, according to the opponent, the applicant's evidence in response to the examiner's first response did not show any use of choice travel in Australia, but rather the registered trade mark choice.

I do not agree with the opponent's submissions in this regard. I see no reason to disturb the original decision accepting that choice had thorough and long usage by the applicant of nearly 40 years, sometimes with other elements depending upon what goods or services the mark was accompanying. The word travel is descriptive in relation to the application goods and services and the mark choice travel is entitled to registration under section 41(5) of the Act.

This ground of opposition also fails.

Ground 3: Section 60 Ground - Reputation

Section 60 of the Act provides:

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.

Accordingly, to satisfy section 60, the opponent has the burden of establishing the following elements:

(a)       a pre-existing trade mark;

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

(c)the acquisition of a reputation in Australia by the pre-existing trade mark; and

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

The opponent submitted that it had already established substantial identity or deceptive similarity under the section 44 ground and that the priority date for registration 665724 choice hotels was 3 July 1995.

The DeSantis declaration states that the opponent has used choice hotels in Australia since about 1994. The priority date for registration 665724 choice hotels is 3 July 1995. Both of these clearly pre-exist the applicant's choice travel trade mark. I have already determined that choice hotels is deceptively similar to choice travel in relation to the section 44 ground, above.

The next question in respect of the section 60 ground, however, 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 Ritchie declaration provides evidence relating to Flag Choice Hotels Limited, which did not commence operations until July 1998, after the relevant date. Thus it is not relevant to the issue of reputation.

Likewise, evidence in the DeSantis declaration relating to Flag Choice Hotels Limited is not relevant to the issue. The only evidence relevant to reputation exhibited in this declaration is:

• the copy of The Australian Motelier, Summer 1996 issue,

• copies of the opponent's former Australian subsidiary's correspondence during the period 1995 to 1997, and

• a confidential exhibit relating to approximate annual revenue derived for the years 1996 to 2001 as a result of the opponent's operations in Australia.

The Australian Motelier, contains a cover story "Branding: Choice Hotels Australia sets the standard" (the cover showing the trade marks of the opponent's hotel/motel chains). The story discusses the benefits of using powerful "brand names" that each appeal to particular target markets. The examples given in the article were sleep inns, comfort inns/ suites, quality inns/ hotels/ resorts/ suites, clarion hotels/ suites/ resorts, and carriage house inns. The article is to the effect that the "branded" chains had developed extensive reputations overseas that would be replicated in Australia. The magazine also contained an advertisement, containing the choice hotels mark, extolling the virtue in obtaining a franchise for the opponent's "brand" hotel/motel chains. While this provides evidence of use of the mark in Australia, in itself it does not establish the development of a reputation of the choice hotels mark. If anything, the evidence is of the reputations of the marks of the franchisee "brand" chains rather than of the franchisor.

The correspondence exhibited appears to be almost entirely correspondence from the Australian subsidiary to the opponent's USA headquarters and one item to others of the opponent's international subsidiaries. It does not evidence reputation in Australia.

The evidence relating to revenue lacks a means of assessing its relevance to reputation. The sums mentioned are effectively meaningless without some means of interpretation. Furthermore, revenue alone does not show that a reputation exists. The evidence does not show what proportion of revenue was made under or by reference to the opponent's choice hotels mark.

On a careful assessment of this supporting material, I am not satisfied that the opponent has adduced sufficient evidence to establish that it has acquired a reputation with the choice hotels mark in Australia before the relevant date, or that use of the applicant's trade mark would be likely to deceive or cause confusion.

This ground of opposition also fails.

Decision

The opponent has not established any of its grounds of opposition. Therefore, the applicant's trade may proceed to registration unless, within one month from the date of this decision, the Registrar is served with a copy of a notice of appeal.

Costs

As to costs, I see no reason why costs should not follow the event. I 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
25 June 2002