Clarity International Limited v Clarity Software Pty Ltd
[2006] ATMO 20
•27 February 2006
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Clarity International Limited to registration of trade mark application 840268(9, 35, 42) - CLARITY - filed in the name of Clarity Software Pty Ltd.
Delegate: | Jock McDonagh |
Representation: | Opponent Mr David Studdy, instructed by Allens Arthur Robinson, Attorneys Applicant Mr Ron Webb SC, instructed by Mallon & Co, Solicitors |
Decision: | 1. Section 52 opposition. Grounds of opposition under ss 41, 42, 43, 44, 58 and 60 not established, provisions in s44(4) applied -registration allowed 2. Costs awarded against opponent |
Background
The applicant, Clarity Software Pty Ltd, has applied to register the following trade mark:
Application Number: | 840268 |
Priority date: | 26 June 2000 |
Goods/services: | Class 9: Computer software, including software related to business process management, psychological testing, Internet enabled databases, messaging and trading systems; publications in electronic form supplied on-line from databases or from facilities provided on the Internet (including web sites) Class 35: Internet domain name registration and management services; On-line surveys; maintaining mailing lists; customer product registrations/enquiries Class 42: Computer programming services; information technology consulting and technical services; web site development and hosting; technical management and operation of web sites for others |
Trade Mark: | clarity |
Advertised: | 30 May 2002 |
The opponent, Clarity International Limited, filed notice of opposition to the trade mark's registration on 2 December 2003. That notice cites grounds of opposition pursuant to sections 41, 42, 43, 44, 58 and 60 in the Trade Marks Act 1995 ("the Act").
Evidence in support was duly served and filed, as was evidence in answer and evidence in reply. On 13 October 2005, the applicant sought permission to file further evidence in the proceedings, and I shall discuss this in later paragraphs.
The matter came to a hearing before me, as a delegate of the Registrar of Trade Marks, in Sydney on 19 October 2005. Mr David Studdy of counsel instructed by Allens Arthur Robinson, Attorneys, represented the opponent. Mr Ron Webb of senior counsel instructed by Mallon & Co, Solicitors, represented the applicant.
Evidence
Details of the evidence is shown in the following table:
| Declarant | Date declared | Exhibits | Known As |
| Evidence in Support | |||
| Theodore Baker | 28.02.03 | TB-1 to TB-13 | Baker |
| Evidence in Answer | |||
| Douglas Mclean Robb | 29.05.03 | DR1 to DR8 | Robb |
| Evidence in Reply | |||
| Anthony Peter Kalcina | 01.07.04 | AK-1 to AK-9 | Kalcina |
The Baker declaration is made by the chairman of the opponent, a position he has held since 28 October 1999. The declaration provides details of the opponent's activities and registered trade marks in Australia.
The Baker declaration indicates that the opponent conducts business relating to the manufacture, development and sale of operational support systems and network management systems that are used to manage global telecommunications and utility networks.
Such business is said to have been operating in Australia since at least February 1994, and the opponent has registered some 13 trade marks that contain the word clarity from applications filed in March and May of 1999.
The Baker declaration includes Australian and international sales figures for the calendar years 1995 to 2002 and provides details of advertising and publicity for the same period.
The Robb declaration is made by the managing director of the applicant, which was originally incorporated in Australia in November 1998 under the name GMN International Pty Ltd.
The Robb declaration states that the applicant commenced using the clarity trade mark in July 1992 and changed the company named to Clarity Software Pty Ltd in August 1992. It states that the business of the company is software product development, including software related to business process management, psychological testing, Internet-enabled databases, messaging and trading systems, on-line electronic publications, and similar activities.
The declaration also provides details of its ownership of the Internet domain name (“the domain name”) since late 1998.
Much of the Robb declaration consists of submissions seeking to refute matters raised in the Baker declaration.
The Kalcina declaration is made by the Chief Executive Officer of the opponent. Mr Kalcina has held the position since the foundation of the company in 1994.
The declaration discusses aspects relating to the domain name, which belonged to the opponent in 1994 and 1995 and was apparently mistakenly reassigned to the applicant as a result of administrative difficulties.
The Kalcina declaration also makes a number of submissions in response to the Robb declaration, and provides details of the opponent's business activities between 1994 and 1999.
As mentioned above, the applicant sought permission to file and serve further evidence in the proceedings. In my reply to the parties, I advised that I was prepared to accept the evidence in the event that the opponent consented to it being filed and served. This was discussed as a preliminary matter at the hearing.
Counsel for the opponent advised that he had been instructed to oppose the admission of the evidence. Generally, his submissions were to the effect that there was insufficient evidence to explain why the evidence could not have been adduced earlier, the ASIC records comprising proposed Annexure DR 9 were not in dispute, the business card proposed to be Annexure DA 10 had no probative value as the trade mark is shown on it was different to that in issue, and the printout of the web site proposed to be Annexure DR 11 was produced well after the priority date and should be given no weight.
After discussion with counsel for both parties, I decided to allow only the evidence as it relates to the ASIC records.
At the hearing, the only grounds of opposition pressed with those under sections 42, 43, 44, 58 and 60 of the Act. I formally dismiss the section 41 ground of opposition.
Grounds of Opposition
The opponent is the owner of the following Australian trade mark registrations, each of which covers goods in class 9, namely computer software being operational support system applications for telecommunications and utility company networks (or other very similar goods):
| Registration Number | Trade Mark | Priority Date |
| 789223 | 25 March 1999 | |
| 789224 | clarity configuration manager | 25 March 1999 |
| 789741 | clarity service manager | 30 March 1999 |
| 789742 | clarity alarm manager | 30 March 1999 |
| 789743 | clarity traffic manager | 30 March 1999 |
| 789744 | clarity fault manager | 30 March 1999 |
| 789745 | clarity carrier connect | 30 March 1999 |
| 789746 | clarity network connect | 30 March 1999 |
| 795511 | clarity for the real view | 28 May1999 |
| 795512 | clarityweb view | 28 May1999 |
| 795513 | clarity oss | 28 May1999 |
| 795516 | clarity ticket manager | 28 May1999 |
| 795517 | clarity .com.au | 28 May1999 |
The parties essentially agreed that the applicant's trade mark is deceptively similar to the opponent's trade marks listed above, and in respect of the same or similar goods in class 9. Indeed, the opponent's trade marks had been cited against the application during examination; however, the provisions of section 44(4) were applied and the trade mark was provisionally accepted.
I am also satisfied that the applicant's trade mark is substantially identical with the opponent's trade mark registration 789223.
Onus
In Kowa Company Ltd v N V Organon [2005] FCA 1282, Lander J states at [138]:
I do not think that the decision in Registrar of Trademarks v Woolworths [(1999) 93 FCR 365] is ambiguous. French J said that there is a presumption of registrability; that Jafferjee no longer is relevant; that the Court must apply the same legal criteria as the Registrar; that because of the obligation imposed by s 33 the application must be accepted unless the Court is satisfied that the application has not been made in accordance with the Act or there are grounds for rejecting it; and that the decision to reject must be made upon positive satisfaction that the ground has been made out.
At [141] his Honour continued:
Therefore, I would proceed on the basis that the onus lies on the respondent to establish the grounds of opposition it relies upon and that I should not uphold those grounds unless I am satisfied that the trade mark should clearly not be registered.
I am bound by decisions of the Federal Court, and proceed on the basis that the onus is on the opponent to establish its grounds, and that I should not uphold a ground unless I am positively satisfied that it has been made out.
Ground 1: section 42 – use of trade mark contrary to law
Section 42 provides:
42. An application for the registration of a trade mark must be rejected if:
(a) the trade mark contains or consists of scandalous matter; or
(b) its use would be contrary to law.
The opponent asserted that use of the applicant's mark would constitute misleading or deceptive conduct within the meaning of the Trade Practices Act1974 and/or amount to passing off, and therefore be contrary to law.
The opponent submitted that use of the applicant's mark will cause members of the public to be misled or deceived into believing that the applicant's mark is in fact the opponent's mark, or goods or services supplied by the applicant are the goods or services of the opponent or that there is otherwise some connection between the goods and services of the applicant and the opponent.
The applicant submitted that this ground fails because to establish that the applicant’s use of the mark clarity is a contravention of section 52 of the Trade Practices Act 1974, the opponent must first establish that it had the necessary reputation in the same mark prior to the applicant commencing to use it. Counsel for the applicant cited Thai World Import v Shuey Shing (1989) 17 IPR 289 at 302 and Applied Technology Pty Ltd v Grandmaster Computers Pty Ltd (1999) 44 IPR 131 at 135. The full Federal Court decision in SAP Australia & Anor v Sapient Australia (1999) 48 IPR 593 at 607 was cited as an example of this proposition.
The applicants submitted that the opponent had adduced no evidence to support a conclusion that the applicant’s use of its mark has a misleading or deceptive effect given the presence in the marketplace of the opponent. At its highest it could perhaps only be concluded that there might be some level of temporary confusion or error of the commercially irrelevant kind and that this is not a contravention of section 52.
I am satisfied that the applicant has used the mark clarity as a trade mark from July 1992, prior to the opponent entering the Australian market. The registration of the trade mark by the opponent does not alter the commercial conduct of the applicant. The opponent had no trade mark in Australia, and thus no reputation in it, at the time the applicant commenced using its trade mark. Based on the principles enunciated in Thai World Import v Shuey Shing (supra) and Applied Technology Pty Ltd v Grandmaster Computers Pty Ltd (supra) I am not satisfied that the applicant’s use of its mark would contravene section 52 of the Trade Practices Act and/or amount to passing off, and therefore be contrary to law.
Therefore, I dismiss this ground of opposition.
Ground 2: section 43 -trade mark likely to deceive or cause confusion
Section 43 provides:
43. An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.
Counsel for the opponent submitted that the opponent has developed a substantial reputation and goodwill in Australia in its marks including the trade mark clarity, and that the applicant's mark gives rise to the connotation the applicant is in some way associated with the opponent and /or the opponent's goods and/or services.
This section does not depend on the existence of a conflicting trade mark. Connotation refers to that which is implied within the mark itself, as a secondary implied or associated meaning: Down to Earth (Victoria) Co-operative Society Ltd v Schmidt (1998) 41 IPR 632 at 644 and confirmed in Winton Shire Council v Lomas (2002) 56 IPR 72.
TGI Friday's Australia Pty Ltd v TGI Friday's Inc [2000] FCA 720 confirms that the connotation must be in the applicant's trade mark itself. The connotation cannot be determined as a result of external considerations, such as reputation or use.
Therefore, I dismiss this ground of opposition.
Ground 3: section 44 - identical etc trade marks
Section 44 provides:
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.
(2) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of services (applicant's services) must be rejected if:
(a) it is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar services or closely related goods; or
(ii) a trade mark whose registration in respect of similar services or closely related goods 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 services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.
(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.
As mentioned above, there is no dispute as to the deceptive similarity of the competing marks. The issue in question is whether or not the applicant's trade mark should have been accepted pursuant to section 44(4) of the Act.
The opponent contended that the application should not have been accepted as the applicant had not produced evidence of continuous use of the mark beginning before the priority date of the opponent's marks and ending on the priority date for the registration of the applicant's mark.
The applicant submitted the opposite, in that the applicant had used its mark by 1993 and has been continuous ever since.
During the course of the examination of the applicant's trade mark, the applicant satisfied the Registrar that it had continuous prior use of the mark. I am satisfied that the Robb declaration likewise establishes continuous prior use.
Consequently I apply section 44(4) of the Act and dismiss this ground of opposition.
Ground 4: section58 Applicant not owner of the trade mark
Section 58 provides:
58. The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.
It is now well established law that, in order to succeed under this ground of opposition the opponent must establish three factors. These are:
(i) that the respective trade marks of applicant and opponent be either identical or substantially identical (Carnival Cruise Lines Inc. v Sitmar Cruises Limited 31 IPR 375, (1994) AIPC ¶91-049, (1994) 120 ALR 495);
(ii) that the respective goods of both parties be the 'same kind of thing' (Re Hicks' Trade Mark (1897) 22 VLR 636; 3 ALR 75); and
(iii) that the opponent has the earlier claim to ownership based on use prior to both the application to register and actual use of the mark by the applicant (Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402 at 413 and Re: Hicks's Trade Mark, supra, at 639).
The opponent asserted that it had adopted and continuously used the clarity mark since 1994, and that there is no evidence to corroborate the applicant's assertion that it used the mark prior to the opponent's use. Further, the opponent submitted that any user by the applicant has not been in the mark it now seeks to have registered but a different mark as shown in exhibit DR6.
The applicant asserted that had used the mark since July 1992 and was therefore the owner of the mark.
I have already stated that I am satisfied that the applicant has used the mark clarity as a trade mark from July 1992. Although I note that exhibits to the Robb declaration show the mark being used in proximity to a device, I consider that the word clarity is separate and distinct feature and can be considered to be the badge of origin from July 1992 for the applicant's goods and services.
Therefore I dismiss this ground of opposition.
Ground 5: section 60 - trade mark the similar to trade mark that has acquired a reputation in Australia
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.
The applicable principles remain as set out in Southern Cross Refrigerating Co. v Toowoomba Foundry Pty Limited (1954) 91 CLR 592 per Kitto J at 594-5, save that the opponent bears the onus:
(a)it is not necessary in order to find that a trade mark offends against the section to prove that there is an actual probability of deception leading to a passing off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of its occurring... it is sufficient if 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 come from the same source. It is enough that the ordinary person entertains a reasonable doubt;
(b)in considering the probability of deception, all the surrounding circumstances have to be taken into consideration;
(c)the rights of the parties are to be determined as at the date of the application;
(d)the test is what the Applicant can do if it obtains registration.
The mark or marks relied upon need not be used in relation to similar goods or services (c.f. section 44): Greenpeace Australia Pacific Limited v Taylor [2004] ATMO 7 at [18]; (2004) AIPC 91-971; Hugo Boss AG v Jackson International Trading Company (1999) 47 IPR 423 at 435.
It has already been determined that there is a pre-existing trade mark that is substantially identical with, or deceptively similar to, that of the applicant.
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), that the reputation is such that use of the mark would be is likely to lead to deception or confusion. The reputation must be shown to have existed at the priority date.
Counsel for the opponent submitted that, as a result of extensive use of the opponent's marks, including the trade mark clarity, prior to the filing date of the trade mark application, the opponent has developed a substantial reputation in its trade mark in relation to the products covered by its registrations and in relation to associated goods and services.
Counsel for the applicant submitted that the applicant is the first user of the trade mark and acquired a reputation in it prior to any use by the opponent. But the cause of any deception at the priority date, consequently, cannot be a result of any reputation of the opponent at that date. Rather, as a matter of causation, it must be the product of the opponent's subsequent adoption of this mark.
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, (2001) 51 IPR 102 at 129.
The concept of reputation, for the purposes of this ground, goes beyond mere examination of sales, advertising and promotion figures and includes the public perception of how a trade mark is being used, developed and exploited by its owner: AAP Information Services v Aaaaa All Auto Parts Pty Ltd [1999] ATMO 37.
I note that section 44(3) does not operate as an exception to section 60: McCormick & Co Inc v McCormick, supra, and that such reasoning would be applicable to section 44(4).
In the Baker declaration the opponent does establish substantial retail sales figures in Australia for the years 1999 to 2002 (the figures for the years 1995 to 1998 are endorsed as “world wide”) and does provide evidence of advertising and promotions in industry journals.
The Baker declaration also states that the applicant forwarded to the opponent a number of e-mails from third parties intended for the opponent but sent to the applicant by mistake.
I am satisfied that the evidence provided by the opponent establishes, for the purposes of the Act, that its trade marks had acquired a reputation in Australia before the priority date. However, I am not sure that because of such reputation of the opponent's marks, the use of the applicant's trade mark would be likely to deceive or cause confusion.
The parties are trading in a highly specialised marketplace. The products are not aimed at the general consumer market, but rather at information technology specialists. The target market is less likely to be confused by the coexistence of the parties, which seemed to be the case prior to the opponent registering its marks.
The few instances of actual confusion, which as a matter of fact were provided by the applicant to the opponent, are possibly a result of domain name confusion as much as trade mark confusion.
While section 60 is not subject to section 44(4), I do not believe that I can ignore the existence of the applicant’s common law trade mark in Australia for a number of years before the opponent commenced business in Australia, and some six years before the opponent registered its trade marks.
I believe there is much merit in the applicant’s assertion that the cause of any deception at the priority date cannot be a result of any reputation of the opponent at that date, rather, as a matter of causation, it must be the product of the opponent's subsequent adoption of this mark in the fact of the applicant’s already established reputation.
Therefore, I am not satisfied that the opponent has satisfied the onus of establishing this ground of opposition and I dismiss it.
Conclusion
The opponent has not made out any of its grounds of opposition, thus the opposition fails.
The trade mark application may then 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 applicant sought its 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.
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
27 February 2006
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