Credit Union Services Corporation (Australia) Ltd v St. George Bank Ltd

[2003] ATMO 34

TRADE MARKS ACT 1995

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

Re:Opposition by CREDIT UNION SERVICES CORPORATION (AUSTRALIA) LTD to registration of trade mark application 710416(36) - FREEDOM - filed in the name of ST. GEORGE BANK LTD.

Date of Decision:	3 June 2003
Delegate:	Terry Williams
Representation:	Opponent: Wayne Willis of FB Rice, patent attorneys. Applicant: Sean McManis, Baldwin Shelston Waters, patent attorneys
Decision:	S 52 opposition: neither s 41 ground nor s 58 established. Registration may proceed.

Background

1.   St George Bank Ltd (St George) applied to register the trade mark FREEDOM on 7 June 1996.  After examination, the application - number 710416 -was advertised as having been accepted for registration in respect of "banking services including the operation and provision of account (including card account), ATM, investment and credit (including credit card) facilities and services" in class 36 of the International Classification of Goods and Services.

2.   Registration of the application is now opposed by Credit Union Services Corporation (Australia) Ltd (Cuscal).  The opposition has proceeded in the ordinary way and both sides have filed, and served copies of, evidence to support their respective positions.  Following this, I was assigned to hear and decide the matter under delegation from the Registrar of Trade Marks.

Evidence

3.The evidence of the parties is as follows:

Cuscal's evidence in support

Declaration by	Dated	Annexures
Ronen Atzmon	13 Feb 2002	Exhibits 1-6

St George's evidence in answer

Declaration by	Dated	Annexures
Sean McManis, annexing a copy of an earlier declaration and exhibits by Jeannine Walsh	6 May 2002	SFM1 and 2

Cuscal's evidence in reply

Declaration by	Dated	Annexures
Alfred Huis	22 May 2002	S1-S23

Evidence in detail

1. Cuscal is a wholesale provider of financial services to a large number of credit unions.  Those credit unions are the shareholders of Cuscal.  It is fair to say that Cuscal has launched this opposition proceeding because it fears that registration of the word "freedom" as a trade mark in the name of St George will restrict the current ability of Cuscal's shareholders to use that word as they see fit.

2. Cuscal's evidence goes to use, by shareholder credit unions, of the word "freedom" in a variety of ways, either textual or in a trade mark sense.  It appears that all of the users of the word in question are affiliated with Cuscal by shareholding.  The first such to use FREEDOM as a trade mark was allegedly the Police & Nurses Credit Society Ltd (P & N), a Western Australian organization.  Its use is the only trade mark use that is asserted to pre-date both the filing of the presently opposed application and (possibly) the first use by St George.  Other entities that are shareholders in Cuscal have also made various uses of the word in question, but all are subsequent to the filing of the present application.

3. St George, for its part, is now a bank.  However, its predecessor was the St George Building Society.  That entity introduced FREEDOM ACCOUNTS in 1982, in relation to a card account linked to the Building Society's ATM network.  Ms Walsh declares that this was extended to the society's VISA debit card in 1985.  Brochures dating from 1984 to 1987 and newspaper advertisements from 1982 support this claim.

   Grounds and Issues

4. Mr Willis, for Cuscal, argued strongly that the trade mark was unregistrable in the hands of St George or anyone else because it was (s 41) a term commonly used in the relevant financial sector.  In the alternatives, he argued that, in terms of ownership (s 58) there was another user before the applicant, or that the applicant's ownership was limited to New South Wales or that, at worst, did not extend to Western Australia.

   Capable of distinguishing?

5. The first of these issues arises under s 41 of the Trade Marks Act 1995 (the Act). To come to the heart of the argument, Mr Willis pressed the point that there was copious evidence of use, in one manner or another, of the word FREEDOM by many traders in relation to financial or banking services. Mr Willis also noted that, while some of these were simply textual uses, the applicant itself had used the word in just that way, plainly showing its ability to serve a descriptive function, "to extol the positive attributes of its services". Here, he referred to examples such as "it puts so much Freedom into handling money", "St George goes beyond freedom of choice to offer you a choice of Freedoms" and "See how Freedom got its name?" Such a word, he argued, was one that had, for the purposes of s 41(3) and following, no inherent adaptation to distinguish.

6. Mr McManis has, I think, somewhat undermined Cuscal's standing as an altruistic defender of the great common of the English language by pointing out that P & N has applied for, and recently gained acceptance of, the identical trade mark[1].  This is not absolutely at odds with the view of Cuscal that the word should be preserved for open use by all but it at least suggests Cuscal recognises that doubt about the openness may arise in other quarters. 

   [1] Given the close relationship between P & N and Cuscal and the fact that Mr McManis was aware of it, that application (890230) is something to which I can refer, though it was not raised in the evidence.

7. He continued by noting that the word "freedom" is a noun, not so much a description as a concept.  It was unlike words such as "real" or "less"[2], which the courts have found to be incapable of registration, and which Mr McManis typified as indicating precisely what the goods or services "were".  Freedom, in contrast, was suggestive, but by no means provided any useful information of any sort.

   [2] Registrar of Trade Marks v Muller 31 ALR 1980 and Unilever Aust Ltd v Karounous 2001 AIPC 91-742 respectively

8. This latter argument I take cautiously.  I note Mr Willis's reminder that in re Application by CRC Industries Aust Pty Ltd[3], Ms Skivington rightly noted:

   The fact that SO EASY conveys only general and positive information makes it more likely that other traders without improper motives will think of these words and want to use them for their descriptive significance on or in connection with their similar goods.

   [3] (1997) AIPC 91-345, 38 IPR 429

9. Mr Willis also urged me to take the obvious textual usefulness of the word "freedom" as evidence that it was what Jacob J called "the sort of word (or sign) which cannot do the job of distinguishing without first educating the public that it is a trade mark"[4].  This, I think, is extreme.  Moreover, I do not intend to side-track this decision by analysis based on foreign law when there is more than sufficient Australian case-law to deal with the concept, in a context where the provisions are more closely aligned.  I therefore prefer the test proposed by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511, and recently described as "probably the best known Australian authority on the notion conveyed by the phrase 'inherently adapted to distinguish'"[5].  Kitto J noted:

   “... the question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it”.

   [4] British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281

   [5] Kenman Kandy Australia v Registrar of Trade Marks (2002) AIPC 91-817

10. I allow, in applying this, for Mr Willis's caution that the reference to "for the sake of the consideration which they ordinarily possess" would include "meanings that have evolved in specific and relevant industries".  However, the evidence does not show that the word "freedom", when used textually in the banking or financial industries, has any but its usual and well-known meaning.  Mr Willis also noted that the word in question must present itself as attractive for more than textual use and must have facility for use in a trade mark sense.  He said that this stipulation arose from the fact that Kitto J laid stress, in the extract above, on the requirement that the use by innocent parties "would infringe".  However, while I agree with his conclusion, I do not need to delve into infringement questions per se.  As Hearing Officer Purvis-Smith recently pointed out[6], Kitto J later chose[7], to omit any reference to infringement.  He rephrased the test in the following terms:

    ... the question to be asked in order to test whether a word is adapted to distinguish one trader's goods from the goods of all others is whether the word is one which other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use upon or in connexion with their goods.

    Even in Clark Equipment, the conflicting use that Kitto J envisaged was clearly a bona fide indication of the state of the USA from which the goods originated.

    [6] Wattyl Australia Limited v Orica Australia Pty Limited [2003] ATMO 7

    [7] in FH Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537, notwithstanding an obvious similarity in the language used in the tests

11. Freedom, in relation to banking services, it seems to me, is a word somewhat like "yield" in relation to pesticides. That word is as an example from a case to which neither advocate referred. Both of them sought, quite correctly, to argue the matter from first principles based on the various more recent Australian authorities that have dealt with the structure and purpose of s 41. However, in giving my answer, I think some comments from an example[8] decided under the old legislation will explain the situation quite well, even though some of the theory dealt with by Ms Hanlon, the deciding officer, has been overtaken by history[9]. 

    The opponent argues that, even though it may not have direct reference to the character of pesticides, the word "yield" is a descriptive term which is commonly and widely used in the agricultural chemical industry and especially in relation to pesticides, and therefore its use should not be resticted in any way.  Similar arguments have been used on many occasions but, as was pointed out by Lord Wright in J. & P. Coats Ltd's Appn[10](supra), the question of what is adapted to distinguish is a practical question to be answered by reference to the particular circumstances of the case.  ..."Is it a word which is likely to harass or embarrass an honest trader in the exercise of his rights to use an ordinary word under Section 44 in order to describe something in which he is dealing?  Is it likely to impede an honest trader in the use of the word "sheen" if he wants to use it as a bona fide description of the character or quality of his goods?"

    ...

    [8] Eli Lilly & Co v Ciba-Geigy Australia Ltd, (1984) AIPC 93-207

    [9] Even at the time it was written, I think Ms Hanlon, in referring to public policy issues, was not referring to some abstract general test, but to one based on the likely needs of other traders.  Or, as Kitto J put it in Clark Equipment (supra) (at p.514) "the interests of strangers and of the public are thus bound up with the whole question".

    [10] 53 RPC 355

12. Ms Hanlon then herself concluded:

    The fact of its frequent use is, I think, of considerably less importance than the manner of its use in assessing whether it is adapted to distinguish goods as a trade mark.  Therefore although the word "yield" occurs quite frequently in agricultural parlance as is illustrated by the pesticide literature and advertising materials which the opponent has provided, consideration of the way in which it is used leads inevitably to the conclusion which I had already reached that pesticides have not been and could not be usefully or meaningfully described by the word "yield".

    
    

    ...

    I think that these objections may be based on the feeling of surprise or disquiet or even outrage that many people experience when a trader makes so bold as to adopt as his trade mark a word which is well known or widely used in the particular trade or industry.  The feeling may be prompted by a number of factors ranging from chagrin at having missed the opportunity to do the same to distress at the interference with the right to use a name or description.  It is therefore most important that, should that trader seek to register that mark, the Registrar as the custodian of public interest takes great care in determining whether in all the circumstances of the case that trader has discharged the onus upon him to show that he is entitled to the registration.  In the present matter I have already decided that registration of the mark YIELD would not interfere with the right to use the word in its ordinary significance in the agricultural and pesticide industries.  From the material before me I can find no reason to suppose that use of the mark would give rise to any confusion, deception, danger or hardship to any person.

13. Obviously, in the present instance, there is a proprietorial contest. Section 41 is not the right venue for resolving that conflict. However, common sense suggests that, just as with the YIELD decision, firms making ordinary textual use of the word "freedom" have nothing to fear.

14. Finally, in leaving s 41, I note Mr McManis relied on a presumption of registrability under s 33. While that provision figures prominently in Registrar of Trade Marks v Woolworths[11], I am not convinced that it runs with full force into s 41 matters[12].  I note the relevant part of Trade Mark Law in Australia, (Butterworths, 2000). The authors, Messrs Elkington, Hall and Kell, describe at page 44 the balance between the terms of s 33 of the structure of s 41. The authors describe the balance as follows:

    ...where the Act (as in s41 or 44(3)) requires the registrar to be satisfied that any matter has been demonstrated before the mark qualifies for acceptance, then the burden of satisfying the registrar remains on the applicant, and there is no presumption that it is satisfied. But where the Act speaks not of the registrar being satisfied, but of an objective state of fact, (as in s 44(1) and (2)), the provisions in dispute in Woolworths, then the presumption does apply.

    [11] (1998) 42 IPR 615

    [12] considered in detail in Blount Inc v Registrar of Trade Marks (1998) 40 IPR 498

15. Balancing this as I said, in Blockbuster Entertainment Inc v Civic Video Pty Ltd [1999] ATMO 25, unreported, the Trade Marks Office strives, in responsibly applying the provisions of s 41, not to raise matters that are unreasonable, unnecessary or speculative. Matters that are reasonable, necessary and well-founded in terms of s 41(3) must, however, be faced. From that point, and from that point only, is there a burden of proof upon the applicant.

16. Mr Willis, for his part, conceded that an opponent had, under s 55, the responsibility of establishing a ground of opposition. However, the present was not, he said, a tenuous ground. For my part, now that the material is before me, what was only an abstract possibility at the time of examination can be better assessed. Based on the textual examples disclosed by the opponent, I conclude that the word "freedom" does have some slight impairment to its inherent adaptation to distinguish. However, I do not believe that this abstract word is in the same category as "real", "less" or "perfection". More, I do not believe the impairment is even significant enough to displace the examiner's conclusion that s 41(3) applies. Therefore I believe that registration should still go forward on the terms proposed by the accepting officer. If I am wrong in this, I would decide that registration is in any case appropriate under s 41(5).

17. I decline to take note of any use by others of the word "freedom" subsequent to the date of filing of the present application by St George.  As Mr McManis said at the hearing, the bona fides of such use is always potentially open to question.  That does not mean that such use is necessarily suspect, or that it must be ignored, since s 41 looks to the future as much as to the filing date and must have a continuing action. However, as Mr McManis also argued, all of the users, post-filing by St George, are affiliated with Cuscal, the opponent. What I have to deal with in this particular case is thus simply a dispute about the rights of two contesting interests. Section 41 is not the ideal tool for this. I will, in this particular case, apply proprietorial blinkers to the general question under s 41. Therefore, despite the normal continuing action of that section, I will apply the restriction that "the rights of the parties are to be determined as at the date of the application"[13].

    [13] Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595

18. The ground under s 41 has not been established.

    Ownership

19. Here, Cuscal relies on s 58:  "The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark."  Put as simply as possible, the first use of a trade mark can block the subsequent registration, by another person, of the same trade mark for "the same kind of thing".  See Shanahan's Australian Law of Trade Marks and Passing Off, p 157-159.

20. It is alleged by Cuscal that the first user of the trade mark FREEDOM in respect of relevant services was not the applicant, St George.  The rights that come with first use of a trade mark are asserted, in so far as Cuscal relies on this ground at all, to go to one of Cuscal's shareholders, P & N.  As Mr McManis said, it is "unusual" that all the usage of the expression "freedom" for trade mark and for textual purposes has been by companies affiliated with Cuscal.  However, that is an issue that can be left aside, as there is no evidence of the actual use of the trade mark by P & N before December 1995, the earliest apparent date of any of the material in exhibit 3 to the Atzmon declaration.  Mr Atzmon sets out the earlier dates for the registration of certain business names, and this information has some circumstantial value.  However, without more, it is not proof of ownership of the trade mark under common law at a date before St George started to use the mark in question, in 1982.

21. P & N's claim to ownership may, of course, be further tested in the opposition forum at some future date.  P & N has filed application 890230, to which I have already briefly referred.  I note that the application has been accepted for registration under the provisions of s 44(4), and that the application is restricted to the State of Western Australia.  I also note that the present applicant, St George, has opposed the registration of 890230. 

22. Nothing about the ownership of a trade mark is restricted, prima facie, by state boundaries.  Mr Willis was unable to point to anything to support such a proposition.  Mr McManis, for his part, relied on PB Foods Limited v Malanda Dairyfoods Limited 1999 FCA 1602, 47 IPR 47, at para 80:

    [80]     In my view, the applicant's submissions overlook the basic fact that even though the respondent's use of the mark CHILL to date has been confined to Queensland and the Northern Territory, it is the proprietor of that mark and as such is entitled to registration throughout Australia.  It was the author of the mark and it was the first to use it.  Admittedly it was only the first by some five weeks, but the applicant has abandoned its argument that that period was of a de minimis character.  The applicant expressly acknowledged the respondent's proprietorship of the mark.

    [81]     I think that I am entitled to take into account, in the exercise of my discretion, and I do so, the very fact that the respondent has applied for registration of its mark and also the respondent's evidence that it has achieved some national exposure for that mark. This was achieved through sponsorship of a sporting team (whose games were televised in places outside Queensland) and by entering its products in agricultural shows outside Queensland.  What I make from that evidence is that the respondent is in a position, or is moving towards a position, where it would be able to use its mark to sell flavoured milk outside Queensland and the Northern Territory if it chose to do so.

    [82]     In those circumstances, I do not think that it is a determinative or very major factor that the applicant, on the present state of intentions, may be more greatly inconvenienced than the respondent by the condition confining its registration to Western Australia.  I take into account that even if, as the evidence demonstrates, the respondent has no present intention to sell outside Queensland or the Northern Territory under its trade mark, it would be detrimental to it to place obstacles in its path should it elect to take that course in future.

1. In that case, Carr J was dealing with s 34 of the 1955 Act and the question of possibly registering a trade mark, subject to a (discretionary) restriction.  That registration was proposed in the face of a prior registration by the respondent, who was also the first user and therefore the common law owner.  What was at issue there was a discretionary exercise in the face of a prior registration.  That is not the present case but, as Mr McManis suggested, there are similarities that suggest that St George should not be made to suffer any restriction of the present application.  St George is, on the (arguably limited) material to date, the owner of the trade mark. 

2. At the hearing, there was some discussion of the extent to which banking services are "the same kind of thing" as services offered by a credit union such as P & N.  If I had to decide that matter, in the context of the present, relatively deregulated financial sector, I would regard the distinctions that may have once prevailed as, for most users of the system, immaterial.  That would be consistent, also, with the conduct of the parties.  St George asserts that, if it needs to, it can rely on services offered by its predecessor, which manifestly was not a bank.  The same logic says it should not seek to avoid, through this distinction, a conflict with services provided by a(nother) non-bank agency.

   Decision

3. None of the permutations of the two grounds of opposition relied upon by Cuscal have been established.  The trade mark application may proceed to registration after 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.

   T. E. Williams
   Hearing Officer