Computer Business Works Inc v Dylan Mark Johnston

[2005] ATMO 14

TRADE MARKS ACT 1995

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

Re:Opposition by Computer Business Works Inc to registration of trade mark application 923281(2, 9) - UNIVERSAL INK JET REFILL SYSTEM - filed in the name of Dylan Mark Thompson.

Delegate:

Jock McDonagh

Representation:

Opponent: Mr Russell Kalvin, Vice President Computer Business Works

Applicant: Mr Alan Johnston, applicant’s father

Decision:

1. Section 52 opposition. Grounds of opposition not established -registration allowed

2. Costs awarded against opponent

Background

1. Alan David Johnston filed trade mark application for the following trade mark:

Application Number:	923281
Priority date:	18 August 2002
Goods:	Class  2   Cartridges filled with ink, ink for printer machines, including computer peripherals, wide format printers, plotters, fax machines, desk top printers, dyes and pigment inks
Trade Mark:
Advertised:	20 February 2003

1. Mr Johnston subsequently transferred ownership of the trade mark to his son Dylan Mark Thompson (“the applicant”).

2. The opponent, Computer Business Works Inc of California USA, filed notice of opposition to the trade mark's registration on 20 May 2003. That notice specified “all of the grounds specified in Division 2 of Part 5 of the Trade Marks Act 1995” ("the Act"), as well as specifying some of those grounds and some perhaps pursuant to USA law but not obviously applicable in Australia.

3. The opponent duly served and filed evidence in support. The applicant likewise served and filed evidence in answer.

4. The matter came to a hearing before me, as a delegate of the Registrar of Trade Marks, in Canberra on 10 December 2004. Mr Russell F Kalvin, Vice-President of the opponent represented his company by telephone. Mr Alan Johnston, father of the applicant Dylan Johnston, represented the applicant.

   Evidence

5. The evidence consists of the following declarations:

Declarant	Date declared	Exhibits	Known As
Evidence in Support
Russell Frank Kalvin	11.05.2004	RK-1 to RK-11	Kalvin
Jennifer Ann Mackie	11.05.2004	JM-1	Mackie
Richard Bullock	10.05.2004	RB-1 & RB-2	Evans
Evidence in Answer
Dylan Mark Johnston	5.06.2004	DJ-1 to DJ-8	D Johnston
Robert Mark Hanbridge	3.06.2004	RH-1	Hanbridge
Alan David Johnston	5.06.2004	AJ-1 to AJ 15	A Johnston

1. It is clear from the evidence that the opponent is a major manufacturer of inkjet and toner cartridge refill kits, inkjet and toner cartridge replacements, bulk refill ink, printer paper, and cartridge filling machines.  Its North American sales in 2002 appear to be in the vicinity of 70 million US dollars.  It has a US trade mark registration for a device mark incorporating the words universal ink jet refill system. In exhibits to the Kalvin declaration, the opponent's goods carry the opponent's mark as shown in the following examples:

1. At some stage in 1999, the opponent commenced selling its goods in Australia through a distributor, a company called Mr Inkjet operated by Mr Richard Bullock.  By 2004, sales of the opponent's goods in Australia were approximately $60,000 per annum.

2. At some stage after applying for the universal ink jet refill system mark in Australia, Alan Johnston visited United States of America with a view to expanding its operations in that market.  In about October 2002, Mr Johnston met Russell Kalvin of the opponent with a view to the parties are doing business together.  The parties had a falling out in early 2003 and have apparently had no business dealings since.

3. I will deal with specific items of evidence as required when I discuss the various grounds of opposition.

   Submissions and grounds

4. .At the hearing, I asked Mr Kalvin if he could specify which grounds of opposition he intended to rely on, as clearly many of the grounds were not supported by evidence and were unsustainable.  Mr Kalvin seemed not to be aware of the actual grounds pleaded in the notice of opposition.  However, he advised that he was asserting that he was the true owner of the opposed trade mark, that his Mark had a reputation in Australia, and that the applicant was “palming off” his goods as those of the opponent.  “Palming off” is a common American alternative expression for what is known in Australia as “passing off”.

5. Taking into account the evidence and Mr Kalvin's comments, prima facie the following grounds are arguable:

   ·     the applicant is not the owner of the trade mark (section 58)

   ·     reputation in a prior mark such that use of the trade mark would be likely to  deceive or cause confusion (section 60)

   ·     use of trade mark contrary to law (section 42 (b))

   Ground 1 - the applicant is not the owner of the trade mark (section 58)

6. Section 58 provides that the registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.  In order to establish this ground, it is incumbent upon an opponent to show that, in the time before filing, the applicant is not the first user in trade in Australia of the applied-for trade mark.  To do so, the opponent must show, at a minimum, that not only is the applied-for trade mark substantially identical to the older trade mark, but that it is applied to the same kind of goods: Re Hicks’ Trade Mark (1897) 22 VLR 636 at 640.

7. The proper comparison for substantial identity is side by side, as described in Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, per Windeyer J, 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 features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.

8. Comparison of the trademarks in the way required, in my opinion, leaves an impression of striking dissimilarity between them.  When one leaves aside the purely descriptive term “inkjet refill system”, one is left with markedly different devices.  The word “universal”, too, is also descriptive in that it suggests that the refill systems have universal application for all brands of printer cartridge.

9. The remaining device on the applicant's mark is suggestive of recycling, while the stylised “U” of the opponent's mark suggests ink drops.  I find that the marks are not substantially identical.  Therefore, I dismiss this ground opposition.

   Ground 2 - reputation in a prior mark such that use of the trade mark would be likely to  deceive or cause confusion (section 60)

10. 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.

11. I am satisfied that the opponent’s trade mark was being used in Australia before the priority date.  As determined earlier, the opponent’s mark is not substantially identical to that of the applicant.  For reasons that will become obvious, I shall not now consider the issue of deceptive similarity.

12. 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.

13. 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 & Company v McCormick (2000) 51 IPR 102, at 127.

14. Reputation in Australia cannot be assumed - it 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. While the opponent has demonstrated that it has now developed a substantial market for its goods in Australia, at the relevant time - that is at the priority date - there is no such evidence. The invoices tendered in evidence show a few hundred dollars worth of goods supplied to the opponent's distributor. Those goods appear to be startup kits and advertising banners, which appear to be items that the opponent's distributor would use to introduce the opponent's goods to the market. While the evidence of the distributor, the Bullock declaration, attests to current substantial advertising and sales, there is no evidence of sales before the priority date. The examples of advertising prior to the priority date did not display the opponent's mark, but merely advert to the descriptive term “universal inkjet refills”. 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.

    Ground 3- use of trade mark contrary to law (section 42 (b))

15. 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 the common law tort of passing off. 

16. 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 a misrepresentation by the applicant by which the goodwill of the opponent's business is deflected to the use of the applicant with consequent damage (or likelihood thereof) to that business: see Shanahan's Australian Law of Trade Marks and Passing Off, 3rd Edition, page 493.

17. In Shanahan, at page 540, it is stated that “[t]raders must be entitled to describe their products, provided least that they do so honestly.  Thus, the word may be used in its primary or descriptive sense, that once word has acquired a secondary significance as indicating the plaintiff's product, it may be difficult to others to use it without conveying that same signification”.  Thus the use of merely descriptive words does not amount to misrepresentation.

18. While it might be the case in the United States that the reputation of the opponent's mark has given the word “universal” a secondary significance as indicating its goods, the evidence does not show that this is the case in Australia.  Additionally, there is no evidence to suggest that the applicant was aware of the opponent and its mark prior to filing its application. Indeed, there is evidence to suggest the contrary.

19. I am satisfied that the evidence shows that the word “universal” remains merely descriptive in Australia.  Indeed, there is evidence that the opponent's distributor used the word “universal” descriptively on its own goods. 

20. I note also that the evidence shows that the get-up of the respective goods is quite different, and not likely to confuse or deceive potential customers.

21. I am not satisfied that the applicant's use of its trade mark would constitute passing off.  Consequently, I dismiss this ground of opposition.

    Other grounds

22. Having regard to the evidence, I am not satisfied that any of the remaining grounds specified in the notice of opposition are made out.  I dismiss the remaining grounds of opposition.

    Conclusion

23. The opponent has not made out any of its grounds of opposition, thus the opposition fails.

24. The trade mark application 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

25. 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.

26. 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 March 2005