Companhia Souza Cruz Industria E Comercio v Rothmans of Pall Mall (Australia) Ltd

[1997] ATMO 11

trade marks act 1955

decision of a delegate of the registrar of trade marks with reasons

Opposition by rothmans of pall mall (australia) limited to Trade Mark Application No 582639 in the Name of COMPANHIA SOUZA CRUZ INDUSTRIA e comercio

As provided in the transitional provisions of Part 22 of the Trade Marks Act 1995 the provisions of the Trade Marks Act 1955 continue to govern this opposition.  Accordingly, unless otherwise specified, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.

The application

On the 16 July 1992 COMPANHIA SOUZA CRUZ INDUSTRIA E COMERCIO of Rio de Janeiro, Brazil (Souza Cruz) lodged an application, numbered 582639, for the registration of a trade mark shown below:

Registration was sought in respect of the goods “tobacco, cigarettes and smokers articles in general”.

Grounds of opposition

Following examination of the application the trade mark was accepted for registration in Part B of the Register subject to an endorsement stating that the applicant disclaimed any rights in the word “free”.  The acceptance of the application was advertised in the Official Journal of 16 June 1994.

Notice of opposition to the registration of the trade mark was lodged on 31 August, pursuant to s49 of the Act, by ROTHMANS OF PALL MALL (AUSTRALIA) LIMITED (Rothmans).  The grounds of the opposition were very widely drawn but basically relied on the registration and use by Rothmans of the trade mark FREEDOM.

The evidence

The evidence in support of the opposition consists of a declaration of David Charles George, Marketing Development Manager of Rothmans, together with an Exhibit DCG.

The evidence in answer to the opposition consists of:

• a declaration by Flavio de Andrade and Milton Carvalho Cabral, directors of Souza, together with Exhibits CSC1-3 and;

• two declarations of Paul G Harrison, patent attorney, both accompanied by Exhibits PGH1 and PGH2.

The evidence in reply consists of a second declaration of David Charles George with Exhibits DCG1 and DCG2.

Service of the evidence was completed on 22 June 1996 and on 2 July 1996 Davies Collison Cave, patent and trade mark attorneys, representing Rothmans, requested that the matter be set down for hearing.  At the hearing, on 14 October 1996 in Sydney, Mr Trevor Stevens of Davies Collison Cave appeared for Rothmans and Ms Gail Hill of F B Rice & Co, patent attorneys, for Souza Cruz.

Submissions

Mr Stevens opened his submissions on behalf of Rothmans by stating that he intended to rely on ss25 and 33 of the Act.  He added that the onus was on the applicant to satisfy the Registrar that the trade mark was registrable in terms of those two sections.

With respect to s25 the essence of Mr Stevens’ submission was the lack of distinctiveness of the trade mark which consisted of a word and several device or pictorial elements. The word FREE in the mark was subject to a disclaimer of exclusive rights. Moreover, he said that the Andrade declaration made no mention of any use of the trade mark in Australia. Paras 12 and 13 of that declaration denied that the words FREE and FREEDOM conveyed much the same ideas. Mr Stevens referred to the meanings of FREE as given by the Macquarie Dictionary and argued that the trade mark gave the impression that the customer received something “free” or for nothing. He therefore submitted that the mark was in the same category as MORE [1979] AOJP 5288 and PLUS [1987] AIPC ¶ 90-401 which conveyed the idea that the customer received something extra or additional. For these reasons, he said, the applicant Souza Cruz had not discharged the onus on it.

An additional objection to the registration of the trade mark in terms of s25, Mr Stevens submitted, was the significance of the word FREE as a surname, occurring 732 times in the Search for Australian Surnames (SFAS), based on the Australian Electoral Roll, conducted by the examiner.  This objection was not mitigated by the evidence of overseas registrations of the mark where the word had no surname significance or otherwise any meaning.

Mr Stevens then referred to the other features of the mark, the crest above the word and the angled and divided rectangle below it.  These were, he said, merely commonplace in themselves or common to the trade in the relevant goods and in either case non-distinctive.  In particular the crest was an extremely common device in cigarette labels. 

As a composite mark, therefore, Mr Stevens submitted that the mark consisted of a word which was descriptive and laudatory as well as a surname with some commonplace, non-distinctive embellishment.  The mark was not therefore registrable in his submission in terms of s25 of the Act.

With regard to s33 Mr Stevens pointed out that Rothmans was the registered proprietor of a trade mark, 567306, consisting of the word FREEDOM and registered in International Class 34 in respect of all the goods in that Class.  There was therefore, he said, no question but that the goods in respect of which Souza Cruz sought registration were the same goods, in terms of s33, as the goods for which Rothmans held its registration.  The remaining question therefore in terms of the section was whether the two marks were substantially identical or deceptively similar.  As to substantial identity he referred to Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407 in which Windeyer J posited the familiar side-by-side comparison test. He also referred to the equally familiar test in Smith Hayden & Co Ltd's Application (1946) 63 RPC 97, where Evershed J spoke of user in a normal and fair manner as a relevant consideration, and in this regard referred to the evidence of use of the applicant’s mark overseas as set out in the Andrade declaration. That overseas use, he submitted was not relevant in the present case.

With respect to deceptive similarity Mr Stevens said that s33 had to be read in conjunction with the definition of that expression in s6 of the Act.  He then referred to the criteria for the comparison of marks as set out by Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-5 and in particular the “caused to wonder” test in that case. In that regard he submitted that the word FREE was common to both marks although he considered that it was not a general principle that an objection existed because of that fact alone. He referred to New South Wales Dairy Corp v Murray-Goulburn Co-op Co Ltd (1989) 14 IPR 75, at first instance, where Gummow J found the words MOO and MMOVE deceptively similar, a decision which was not disturbed in the subsequent appeals. He also submitted that there were three basic principles to be considered in deciding the question of deceptive similarity:

1.    imperfect recollection;

2.    the idea conveyed by the marks; and

3.    the essential feature of the marks.

Mr Stevens also referred to Pianotist Co’s Application 23 RPC 744 and Gardenia (Overseas) Pte Ltd v The Garden Company Ltd (No 2) (1994) AIPC ¶91-096. With regard to the idea conveyed by the marks he referred to the dictionary definitions of the words “free” and “freedom” submitting that the fundamental idea in each case was the right to choose. The word “free’ was also the essential feature of both marks.

Mr Stevens referred to the peculiar circumstances in the trade in tobacco products the sale of which is strictly controlled by government regulation.  The notion of the freedom of the consumer to choose to use those products therefore had a special significance in relation to the goods.  In the context of those goods also the phenomenon of brand loyalty, which was particularly strong, was of special significance.  The marketplace where the goods were sold was also a relevant consideration given that many sales would take place in, for example, pubs, clubs and discos in conditions of subdued or even dim lighting where people might be under the influence of stimulants leading to problems in pronunciation and where the trade marks might not be displayed to best advantage.

Ms Hill submitted, with respect to the matter of the distinctiveness of the mark, that it had been accepted for registration in Part B of the Register and the relevant standard in terms of s25 of the Act was not whether the mark was in fact distinctive but whether it was capable of becoming distinctive as a composite mark.  She pointed out that the word FREE had been disclaimed because of the examiner’s objections to it as a surname.  The rights of other traders to use the same word “free” or related words such as “freedom” were therefore adequately protected.  She submitted further that there was no evidence to show that the combination of the word and device elements was simply ordinary, the panel in particular not being an ordinary descriptive feature.  The word “free” itself had a range of meanings depending on the context and it was not reasonable to focus on only one meaning of the word.  The combination of the word together with the device elements produced a composite mark which was clearly capable of distinguishing the applicant’s goods.

With respect to the submissions on s33 Ms Hill conceded that there was no question as to the goods being different.  However, she argued that the marks could not be said to be substantially identical on the side-by-side test laid down by Windeyer J in the Esso case, supra.  Moreover, the two words “free” and “freedom” were ordinary English words known to the entire population and not therefore likely to be confused.  They were two distinct words which were not interchangeable: the word “freedom” could not connote “free” from certain constraints.  Also, one word consisted of one syllable and four letters, the other of two syllables and seven letters even though they had an element in common.: Oshkosh B’Gosh, Inc v Koshito Confecciones CA (1995) 32 IPR 295. There were clear and evident differences between the marks.

On the question of deceptive similarity Ms Hill referred also to the Esso case and the Pianotist case, supra, in arguing that the realities of the business world had to be considered, that there must be a real tangible probability of confusion as at the date of the application.  The words were known words with different meanings and the fact that FREE was a surname also lessened the likelihood of confusion.  No citation against the applicant’s trade mark had been raised by the examiner during examination and the state of the Register showed a number of other trade marks containing the element “free-” including FREEWAY, FREESTYLE, FREEPORT etc.  The fact that the word “free” was included in the registered proprietor’s trade mark was not in itself necessarily conclusive of the question of substantial identity or deceptive similarity: Gardenia v Garden, supra, and the beginnings of words could be discounted in the comparison of ordinary English words: Expanded Metal Co Ltd v Finn Blinds (1986) AIPC ¶90-305 (PERMA vs PERMALUX), although in that case the words were not known distinct words, also Sporoptic Pouilloux SA v Arnet Optic Illusions, Inc (1995) 32 IPR 43 (VUARNET vs ARNET).

As to the argument that the applicant’s mark was the common element or essential feature of the opponent’s Ms Hill submitted that that in itself was not decisive as seemed to have been decided in Seven Up Co v Bubble Up Co, Inc (1987) AIPC ¶90-433. Rather, the normal considerations set out in the Esso case should be followed.  She queried whether the appearance of the marks was the paramount consideration pointing out that the particular goods were typically ordered by name except in the case of sales by means of vending machines.  As to the appearance of the marks she referred to Taiwan Yamani, Inc v Giorgio Armani SpA (1990) AIPC ¶90-644 where the goods were typically selected on a visual inspection of the goods and the respective trade marks. Here, she said, the commercial reality was otherwise: the goods would be more often ordered by word of mouth. The oral/aural characteristics were therefore of more importance: the fact that the two words were well-known English words with distinct meanings, the difference in the number of syllables and the fact that -DOM was a strong syllable unlike the -VE of MOOVE which had been found deceptively similar to MOO: NSW Dairy Corp, supra.  The ordinary consumer would readily distinguish between the respective words.

With respect to the peculiarities of the market for the particular goods Ms Hill also relied on the facts that the ordinary consumer was a mature person, necessarily so by law, extremely brand conscious and a creature of habit who would not be deceived into taking any other goods than those to which he or she was accustomed, not to say addicted.  Moreover, the smoker would on average be confronted by the particular trade mark some 20 times a day and so would be in no danger of confusing it with another.  In the case of cigarettes there was an exceptional degree of intimacy with the trade mark on the part of the consumer and an exceptional level of brand impact on him or her leading to a low tolerance of brand substitution.  Moreover, the choice of a brand of cigarettes was intimately bound up with the cultivation of a self image closely related to the image promoted in the advertising of the goods.  They could be regarded as an extension of the personality of the smoker.  That was another factor in the strong brand loyalty associated with the goods.  In all of those circumstances Ms Hill argued that there was no real or tangible danger of deception or confusion: Lancer Trade Mark [1987] RPC 303. Although the goods were not expensive they were also not of the “bag of sweets” variety that would be purchased thoughtlessly or with little regard for the trade mark.

Decision

Despite the reach of the grounds of opposition stated in the notice of opposition to this application the only grounds argued at the hearing were those under ss25 and 33 of the Act.  I will therefore deal with those two grounds it turn.

Section 25

The trade mark at issue was evidently accepted on the basis that it was a composite mark consisting of the word FREE and the pictorial elements above and below that word.  Thus the disclaimer of the word FREE.  However, in the context in which the mark is used or proposed to be used, that is, on cigarette packets, it seems to me that the crest device is so extremely common that it would register with the ordinary purchaser as no more than a blur, to the extent that it is totally insignificant as a distinguishing factor.  Likewise, the so-called “panels” seem to me, in the same context, to perform no trade mark function whatever but to be merely part of the get-up of the packet.  The trade mark is on that view of the matter nothing more in effect than the word FREE.  In accordance with the established guidelines for the acceptance of marks in Part B of the Register of words which are surnames but have a well-known other meaning the number of occurrences of such a word in the SFAS search ought not to exceed 400.  The word “free” occurred almost double that number of times (732) when the examiner conducted the surname search.  I therefore consider that the trade mark is not registrable in Part B of the Register.

Section 33

I consider also that the applicant’s trade mark is deceptively similar to the registered trade mark 567306 of the opponent.  While I take Ms Hill’s point that there are other marks on the Register which include the word “free” as an element, such as FREEWAY, FREESTYLE, FREEPORT, I think that those marks are in a different category than that of the word FREEDOM.  Firstly, each of the former words has a different connotation than the word FREEDOM itself which is simply the abstract noun derived from the adjective “free” and has the same connotations as that word.  Secondly, in pronunciation each of the former words bears equal stress on both syllables unlike FREEDOM which is strongly stressed on the first syllable, the noun of the second syllable being “slurred”, as it was described in London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264, that is the vowel of the second syllable is weakened to the neutral vowel or schwa I cannot therefore accept Ms Hill’s submission that the second syllable of FREEDOM is a “strong” syllable. On the contrary, as I have indicated I think it is a particularly weak syllable which in the circumstances described by Mr Stevens could well be lost in speech. Ms Hill herself argued that in relation to the goods in question the oral/aural characteristics of the marks were of more importance than the visual. I accept that submission and for the reasons given conclude that the two marks could well be confused.

Conclusion

I have found that the opponent has been successful on both of the grounds argued at the hearing, ss25 and 33, and I therefore allow the opposition.  Subject to the applicant’s right of appeal, therefore, I refuse to register the trade mark subject of application 582639.

I award costs to the opponent Rothmans.

Michael Homann
Hearing Officer

7 April 1997