Creative Nail Design, Inc. v Guangzhou Bluesky Chemical Technology Co., Ltd

[2014] ATMO 22

TRADE MARKS ACT 1995

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

Re:Opposition by Creative Nail Design, Inc. to registration of trade mark applications 1467454(3) - BLUESKY SHELLAC; 1467455(3) - iSHELLAC BY BLUESKY - filed in the name of IShellac by Bluesky Pty Ltd.

Delegate:	Iain Campbell Thompson
Representation:	Opponent: Peter Dummer, Trade Mark Attorney, of Wallington Dummer Applicant: Did not appear or file written submissions
Decision:	2014  ATMO 22 S52 opposition to registration – s44: consideration of whether the trade marks deceptively similar – registration refused

Background

1. In this matter IShellac by Bluesky Pty Ltd (‘the Applicant’) has filed applications[1] under the Trade Marks Act 1995 (‘the Act’) to register the two trade marks which appear below:

   Application No:         1467454
   Priority Date:             12 January 2012
   Goods:  Class 3: Nail polish

   Trade Mark:               Bluesky Shellac

   Application No:         1467455
   Priority Date:             12 January 2012
   Goods:  Class 3: Nail polish

   Trade Mark:               iShellac by Bluesky

   [1] Application 1467454 has been assigned to Guangzhou Bluesky Chemical Technology Co., Ltd (‘Guangzhou’).

2. The applications were examined as is mandated by section 31 of the Act and subsequently advertised as accepted for possible registration on 3 May 2012 in the Australian Official Journal of Trade Marks.

3. On 8 August 2012 and 17 August 2012, after seeking and receiving an extension of time in which to do so, Creative Nail Design, Inc. (‘the Opponent’) filed Notices of Opposition (‘the Notices’) to the registration of the trade marks[2]. The Notices cite most of the available grounds of opposition and include that pursuant to section 44 under which I will decide these matters.

   [2] It is the opposition to 1467455 which was filed on 8 August.

4. The Notice specifies registrations on which the Opponent relies to found its section 44 ground of opposition including that below which is most relevant to these proceedings:

   Registration No:         1426724
   Priority Date:             24 May 2011

   Goods:Class 3: Nail care preparations; nail enamel; nail hardeners; nail polish; nail varnish

   Class 11: Ultraviolet ray lamps, not for medical purposes

   Trade Mark:               SHELLAC

5. The Opponent filed evidence in support of the opposition – the applicant has not filed evidence in answer.

6. Both parties were informed of their right to be heard; the Opponent subsequently elected to be heard but the Applicant(s) did not.  As a delegate of the Registrar of Trade Marks, I heard the submissions of the Opponent at a hearing in Sydney on 11 February 2014.  Mr Peter Dummer, trade mark attorney, of Wallington-Dummer represented the Opponent – the Applicant did not appear or put in written submissions.

   Onus & Relevant Date

7. The Opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities.[3]

   [3] Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787; (2006) 70 IPR 599; [2006] AIPC 92-146 per Gyles J at [6] to [26]; Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891; (2009) 180 FCR 60; (2009) 258 ALR 545; (2009) 82 IPR 13; [2009] AIPC 92-355 per Sundberg J at [22] to [26]; Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664; (2010) 87 IPR 300 per Kenny J at [30] to [40]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051; (2011) 198 FCR 435; (2011) 283 ALR 743 per Greenwood J at [16] to 32]; Allergan, Inc v Di Giacomo [2011] FCA 1540; (2011) 199 FCR 126; 94 IPR 541 per Stone J at [11] to [12]; Tricarico v Dunn Bay Holdings Pty Ltd [2012] FCA 271 per McKerracher J at [9] to [10] and Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81; ( 2012 ) 94 IPR 551 per Dodds-Streeton J at [13] . and, most recently, DC Comics v Cheqout Pty Limited [2013] FCA 478 (22 May 2013) per Bennett J at [13].

8. The relevant date at which the grounds must be considered is the filing date of the opposed application: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; The Seven Up Company v O.T. Limited [1947] 75 CLR 203 at 211; Rael Marcus v Sabra International Pty Ltd (1995) 30 IPR 261 at 266.

   Evidence

9. The evidence served and filed as evidence in support of the opposition by the Opponent comprises:

   Statutory Declaration of Jenny Du, made on 20 November 2012, with Annexures AA1 to AA3.

   Statutory Declaration of Glenn Daryl Joseph made on 1 March 2013, with exhibits GJ1 to GJ23

   Statutory Declaration of Peter Chamberlayne Dummer made on 6 March 2013, with exhibits PCD1 to PCD7

   Statutory Declaration of Josep Maria Rovira made on 10 April 2013 with exhibits JMR1 to JMR6

   The Evidence

10. Most relevant to the ground under section 44, for an understanding of the nature of the Opponent’s goods and the relationship of the trade mark SHELLAC to them, are the declarations of Ms Jenny Du and Mr Glenn Daryl Joseph.

11. Jenny Du is a paralegal of Wallington-Dummer, trade mark attorneys for the Opponent.  Ms Du’s declaration attests to the meaning of the word ‘shellac’ as indicating ‘a resin secreted by the female lac bug on trees in the forests of India and Thailand’.  A Wikipedia article on shellac states:

    It is processed and sold as dry flakes … , which are dissolved in ethyl alcohol to make liquid shellac, which is used as a brush-on colorant, food glaze and wood finish. Shellac functions as a tough natural primer, sanding sealant, tannin-blocker, odour blocker, stain, and high-gloss varnish. Shellac was once used in electrical applications as it possesses good insulation qualities and it seals out moisture. Phonograph (gramophone) records were also made of it during the pre-1950s, 78-rpm recording era.

12. Glenn Daryl Joseph is a director of Pacific Nail & Beauty Pty Ltd ('PNB') and a director of Pacific Nail & Beauty (Aust) Pty Ltd.  PNB is the exclusive Australian importer and master distributor of the Opponent’s SHELLAC products. PNB is authorised by [the Opponent] to conduct exclusive distribution of SHELLAC products in Australia.  PNB is also the exclusive provider of training and accreditation programs and courses regarding the proper use of the Opponent’s SHELLAC products, for nail technicians.

13. Mr Joseph states:

    The Opponent … is the owner of the SHELLAC manicure and pedicure system and concept, and manufactures SHELLAC products for use worldwide. The SHELLAC manicure and pedicure system is a 'hybrid' UV light curing system, combining the durability of gel nail treatments with the easy removability of regular nail polish. A cured SHELLAC nail coating has the durability and strength of gel nail treatments, lasting 14 days. The cured coating does not chip, is easily applied to the nail and may then be removed like a polish. It does not require prior preparation, such as filing, which is necessary with other nail systems such as gels or acrylics. [The Opponent] is the pioneer of this technology. The SHELLAC manicure and pedicure system comprises specially-formulated nail coats, UV lamps and remover wraps.

14. Concerning the nature of the goods, Mr Joseph asserts:

    The SHELLAC manicure and pedicure system comprises the application of 3 coats to a consumer's nails: base coats, colour coats and top coats. Each of these is applied and cured under a SHELLAC ultraviolet lamp in turn, to create the desired and unique SHELLAC effect, i.e. a long-lasting, mirror-like, shiny and genteel finish on a consumer's nails. Once applied, the finish lasts for at least 14 days without visible sign of wear or dulling of the shine. If the consumer wishes to remove the SHELLAC coats from her nails, this may easily be done using SHELLAC remover wraps, which are specially designed to remove SHELLAC coats from a consumer's nails.

    Now shown to me and marked Exhibit GJ4 is a bottle of SHELLAC base coat in standard packaging. It is to be noted that the ingredients list on the packaging indicates that SHELLAC base coat does not include the substance produced by certain insects, known as lac.

    Section 44

15. Absent evidence of use of the opposed trade mark, subsection 44(1) of the Act relevantly provides:

    44Identical 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.

16. In the context of this matter, in order to establish this ground, the Opponent must establish the existence of a registered or pending trade mark owned by a person other than the Applicant which has a priority date earlier than that of the opposed application which has both:

    The same or similar goods; and,

    A trade mark which is substantially identical or deceptively similar.

17. For convenience and simplicity I will refer to the Opponent’s trade mark registration at paragraph 4, above, as ‘the Opponent’s SHELLAC trade mark’.

18. The priority date of the Opponent’s SHELLAC trade mark is earlier than that of the opposed trade mark.

    The Goods

19. Section 14 of the Act relevantly provides:

    14Definition of similar goods

    (1)For the purposes of this Act, goods are similar to other goods:

    (a)if they are the same as the other goods; or

    (b)if they are of the same description as that of the other goods.

20. The expression ‘goods of the same description’ is a term discussed in cases such as E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2009] FCAFC 27; (2009) 175 FCR 386; [2009] AIPC 92-337 at [70] by Moore, Edmonds and Gilmour JJ:

    The expression "goods of the same description" is a term of art which was found in the legislative predecessors to the TM Act. There is Full Court authority, MIDSydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236, that authorities predating the enactment of the TM Act in 1995 concerning the meaning and effect of the expression in a different context are apt to be applied in considering the meaning and effect of the expression in s 120(2). The fact that the Full Court was considering the expression "services of the same description" rather than "goods of the same description" does not appear to us to be a material difference. In this context, the Full Court referred to the judgment of the High Court in Southern Cross at 606. Considerations referred to in the passage from the judgment of the High Court include 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 the manufacture or distribution, they are regarded as belonging to the same trade.

21. The Opponent’s specification of goods ‘Nail care preparations; nail enamel; nail hardeners; nail polish; nail varnish’ is comprised of goods which are the same as, or are of the same description as, the item ‘Nail polish’ which comprises the whole of the specification of the opposed application.

    Similarity of the Trade Marks

22. The Opponent does not argue that the Opponent’s SHELLAC trade mark is substantially identical to either of the opposed trade marks.

23. As Mr Dummer observed, the expression ‘deceptively similar’ is defined by section 10 of the Act:

    10Definition of deceptively similar

    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.

24. The assessment of the likelihood of deception or confusion is informed by the factors considered by French J in Registrar of Trade Marks v Woolworths [1999] FCAFC 1020; [1999] FCA 1020; (1999) 93 FCR 365; (1999) 45 IPR 411; [1999] AIPC 91-499 at [50]:

    (i) To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring. A mere possibility is not sufficient.

    (ii) 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 closely related products and 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.

    (iii) In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.

    (iv) The rights of the parties are to be determined as at the date of the application.

    (v) The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained.

    In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v The Bali Company Inc [1973] HCA 43; (1973) 129 CLR 353 at 362:

    "...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion."

25. In Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407; [1962] ALR 304; 35 ALJR 355; 1B IPR 523, Windeyer J. discussed deceptive similarity at [13]:

    On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. 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: "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": de Cordova v. Vick Chemical Co (1951) 68 RPC, at p 106. And in Australian Woollen Mills Ltd v. F.S. Walton & Co. Ltd. [1937] HCA 51; (1937) 58 CLR 641 Dixon and McTiernan JJ. said: "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".

26. The context in which the comparison of trade marks takes place is also important. In the Matter of An Application by the Pianotist Company Ltd for the Registration of a Trade Mark (1906) 23 RPC 774 at 777 Parker J said:

    You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion - that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods ... you must refuse the registration, or rather you must refuse the registration in that case.

27. The Opponent’s SHELLAC trade mark is comprised of a normal word of the English language which the Opponent asserts has no reference to the nature of the goods.  This is uncontroverted by the Applicant.  As the Opponent’s goods do not contain ‘lac’ or shellac, and shellac is not a normal ingredient of nail varnish, the Opponent’s trade mark should, in the absence of evidence to the contrary, be taken as alluding to the nature of the goods, or their effect, and thus functioning as a distinctive and memorable trade mark.

28. The word ‘shellac’ occurs prominently in the opposed trade marks and its meaning is not subsumed by the other elements of the opposed trade marks or the rendering as iShellac in opposed application 1467455.  If anything, in my consideration, this particular rendering (and its placement within the first word in the trade mark iShellac by Bluesky) stresses or highlights the word ‘shellac’ rather than it alters its prominence or denotation.

29. The result of the use of the opposed trade marks would, I consider, cause people to wonder at some connection between the goods of the Opponent and those of the Applicant or whether there is some connection between the Applicant and Opponent.  Or the commonality of the word ‘shellac’ might lead people to conclude that the products are identically formulated.  These outcomes are species of confusion rather than of deception.  In Parker-Knoll Limited v Knoll International Limited [1962] RPC 265 at page 174 Lord Denning said of the differences between ‘confusion’ and ‘deception’:

    Secondly, ‘to deceive’ is one thing. To ‘cause confusion’ is another. The difference is this: When you deceive a man, you tell him a lie. You make a false representation to him and thereby cause him to believe a thing to be true which is false. You may not do it knowingly, or intentionally, but still you do it, and so you deceive him. But you may cause confusion without telling him a lie at all, and without making any false representation to him. You may indeed tell him the truth, the whole truth and nothing but the truth, but still you may cause confusion in his mind, not by any fault of yours, but because he has not the knowledge or ability to distinguish it from the other pieces of truth known to him or because he may not even take the trouble to do so.

1. In Pioneer Hi-Bred Corn Co v Highline Chicks Pty Ltd [1979] RPC 410, at 423 Richardson J, in the New Zealand Court of Appeal said of the word ‘confusion’:

   Deceived’ implies the creation of an incorrect belief or mental impression and ‘causing confusion’ may go no further than perplexing or mixing up the minds of the purchasing public .... Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant’s mark come from some other source and confused to being caused to wonder whether that might not be the case.

2. In Radio Corp Pty Ltd v Disney [1937] HCA 38; (1937) 57 CLR 448 (the Mickey Mouse case) Rich J, at 454, said:

   In matters such as this we are dealing with the vague and indefinite impressions of the great mass of the public who neither are required nor desire to refine upon distinctions of this sort. To them it is shown that the name "Walt Disney" summons up a picture of "Mickey Mouse" and the picture of Mickey Mouse reminds them of "Walt Disney". The foundation of this is authorship no doubt. But somehow or other, how, it is fruitless to inquire, they connect the appearance on an article of the name or form of "Mickey Mouse" with "Walt Disney". This being so, it is, I think, impossible for the appellant to negative all likelihood of confusion. It is no part of our duty to state in definite terms precisely how the public will be misled or what kind of connection they will impute. Confusion involves indefiniteness of ideas.

3. The Opponent has established its opposition under section 44 of the Act.

   Decision

4. At the relevant date subsection 55(1) of the Act provided:

   55Decision

   (1)Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:

   (a)to refuse to register the trade mark; or

   (b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

   having regard to the extent (if any) to which any ground on which the application was opposed has been established.

   Note:For limitations see section 6.

5. I refuse to register applications 1467454 and 1467455.

   Costs

6. As it has been successful in each these matters the Opponent is entitled to its costs which I award against Guangzhou and the Applicant, appropriately apportioned between the matters.

   Iain Campbell Thompson
   Hearing Officer
   Trade Marks Hearings
   06 March 2014