Danisco A/S v Sweetlife Australia Pty Ltd [Sec=Unclassified]

[2009] ATMO 80

TRADE MARKS ACT 1995

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

Re:Opposition by DANISCO A/S to registration of trade mark application 1149004 (3, 5) - XYLITAB - filed in the name of SWEETLIFE AUSTRALIA PTY LTD.

Delegate:	Heath Wilson
Representation:	Applicant: Watermark, Patent and Trade Mark Attorneys by written submissions Opponent: Davies Collison Cave, Patent and Trade Mark Attorneys by written submissions
Decision:	2009 ATMO 80 Opposition under section 52 - Grounds of opposition under sections 42(b), 58, 59, and 60 of the Trade Marks Act 1995 – Intention to use - No prior use or prior reputation - 42(b), 58, 59 and 60 not established - Trade mark to proceed to registration – costs awarded against the opponent.

Background

1. On 24 November 2006, Sweetlife Australia Pty Ltd (“the applicant”) applied to register the following trade mark:

   Trade mark application:        1149004
   Trade mark:  XYLITAB

   Goods Specification:             Class: 3 Dentifrices, toothpaste, tooth gel, tooth mousse; non-medicated preparations for oral hygiene, dental and denture care; non-medicated mouthwash; non-medicated preparations for cleaning teeth and dentures; non-medicated breath freshening preparations

   
   Class: 5 Medicated confectionary including medicated chewing gums, pastilles and lozenges; medicated confectionary, preparations, pastilles, lozenges, and tablets, for oral hygiene, dental, and denture care, including medicated preparations for cleaning dentures and teeth; medicated confectionary for medical and dental purposes; chewing gum, lozenges and pastilles for medical and dental purposes; medicated mouthwash and medicated breath freshening preparations; medicinal dietetic foods, substances, preparations, and confectionary

2. The trade mark was advertised for possible registration in the Australian Official Journal of Trade Marks on 29 March 2007. On 28 September 2007, Danisco A/S (“the opponent”) filed a notice of opposition (“the notice”) to this trade mark application under section 52 of the Trade Marks Act 1995 (“the Act”).

   Evidence

3. While this matter was set down to be heard on 11 September 2009, the hearing was cancelled at the request of the parties involved, and has been decided on the material before me. The opponent has filed and served evidence in support as set out below. The applicant has provided written submissions, but has not filed any evidence in answer or further evidence in this matter.

4. The applicant’s written submissions include certain comments which could be construed as matters that should have been appropriately served as evidence. As this material is unsworn and has not been served on the opponent, it would procedurally inequitable to accord those comments the weight of evidence in this matter. While I have only given this material the weight of written submissions, I note that dealing with the applicant’s comments in this fashion has not affected the ultimate outcome of this matter.

   Evidence in Support

   ·    Statutory Declaration of Dimitry Sifonios (Technical, Developmental & Regulatory Affairs Manager of Nestle Australia Limited) dated 19 September 2008 (Exhibits DS-1 to DS-2).

   Grounds of Opposition

5. The notice cites all possible grounds of opposition under the Act. However, via correspondence dated 4 September 2009, the opponent advised that it would only be pressing the grounds of opposition under sections 42(b), 58, 59, and 60 of the Act. I will therefore address these particular grounds in detail, and I find that the opponent has not discharged the onus of establishing the remaining grounds of opposition. For an opposition to succeed, the opponent bears the onus of establishing at least one of the grounds cited in the notice on the balance of probabilities (Pfizer Products Inc v Karam (2006) 70 IPR 599, per Gyles J at [6] to [26]; Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891 (18 August 2009) per Sundberg J at [26]).

   Reasons

   Section 58: Applicant not owner of trade mark

   The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

   Note:For applicant see section 6.

6. It is well established that the first person to apply to register a trade mark will, in most cases, be entitled to claim to be the owner.  An exception to this is if the trade mark has been used before the filing date (in this case, 24 November 2006). In that case, and in the absence of fraud, the owner of a trade mark in Australia for particular goods or services is taken to be the first person to use it (“first user”) in the course of trade in Australia in relation to those goods or services.

7. The first user need not have invented or first thought of the trade mark (Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 399 per Fullagar J), but merely to have been the first to adopt the mark for a trade mark in Australia. In addition, this first use must be that of a “substantially identical” (Carnival Cruise Lines v Sitmar Cruises Ltd (1994) 31 IPR 375) trade mark in Australia on goods considered to the “same kind of thing” (Re Hicks’ Trade Mark (1897) 22 VLR 636) as those contained within the applicant’s specification of goods.

8. Mr. Sifonios, Manager of Nestle Australia Limited, (a customer of the opponent) states that: “…Danisco use the trade mark XYLITAB in relation to polyols being directly compressible Xylitol…” (Paragraph 4, Sifonio declaration), and “I have been aware of Danisco’s trade mark since 2004” (Paragraph 6). He also states that the purchases by Nestle Australia Ltd of the product (Xylitol) have been steady since 2004. In this instance, the statement of use given by a customer of the opponent carries more weight and significance than if those statements were made directly by the opponent attempting to establish use.   

9. By way of explanation, Xylitol (the goods of the opponent) is “a sweet-tasting crystalline alcohol derived from xylose, present in some plant tissues and used as an artificial sweetener in foods”[1], or “a sugar, obtained from birch and other trees, that increases the production of saliva and inhibits bacterial growth. It is used as a bulk sweetener in foods and toothpaste and as a component of artificial salivas.”[2]

   [1] "Xylitol noun" The Oxford Dictionary of English (revised edition). Ed. Catherine Soanes and Angus Stevenson. Oxford University Press, 2005. Oxford Reference Online.

   [2] "Xylitol"  An A-Z of Medicinal Drugs. Oxford University Press, 2000. Oxford Reference Online.

10. The exhibits accompanying the opponent’s declaration are not particularly substantial and consist only of an email exchange in September 2004 in relation to a purchase order of “Xylitol 200” (Exhibit DS-1), and a spreadsheet of purchase orders for these goods from 2005 to 2008 (Exhibit DS-2). The subject of the email exchange reads as “RE: Xylitol 200” and a request is made by Fay Dwyer of Nestle, Blacktown for “400kg of Xylitol 200”. The response by Paul Bellchambers of H J Langdon (the opponent’s previous Australian distributor) makes reference to “Xylitab 200”. This one instance is the only reference (supported by evidence) of the use of the trade mark XYLITAB, provided by the opponent.

    Substantially Identical

11. The comments of Windeyer J in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407 [at 414-415]) set out the test for comparison of substantially identical trade marks:

    [the trade marks] 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

12. Taking the above test and the opponent’s evidence into account, I find that the opponent’s trade mark “Xylitab 200” is substantially identical to the opposed application XYLITAB. The addition of the numerals “200” does not detract from the total impression of resemblance between the applicant’s trade mark and the opponent’s mark. It is likely that the numerals may simply refer to the grade or strength of the Xylitol sweetener. In relation to the comparison of substantially identical trade marks, “It requires a total impression of similarity to emerge from a comparison between the two marks. In a real sense a claim to proprietorship of the one extends to the other. But to go beyond this is, in my view, not possible” (Carnival Cruise Lines (supra) per Gummow J [at 62]).

    Prior Use

13. It is possible that slight use will suffice (Moorgate Tobacco Co Ltd v Phillip Morris Limited & Anor (1984) 156 CLR 414 [at 432]) to satisfy the requirements under section 58. The prior use must be bona fide and use as a trade mark, and I am satisfied that the email correspondence (exhibit DS-1) establishes “an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade” (Moorgate Tobacco Ltd v Phillip Morris Ltd (No 2) (1984) 156 CLR 414 – my emphasis). The email exhibited in the opponent’s evidence does not need to establish that the purchase of goods actually occurred, merely that a bona fide offer was made in the course of trade in Australia. In addition, an opponent can indicate that a third-party trader has prior use of a trade mark, as long as it is clearly shown that the applicant is not the owner of the mark.

14. The second exhibit refers to a number of purchasing orders (2004-2008) from Danisco Australia Pty Ltd for “Sweetener Xylitol Compressible 200,” but there is no reference to the opponent’s XYLITAB trade mark. As a result, this exhibit carries little weight in establishing use of the trade mark XYLITAB. The omission of XYLITAB when combined with a general lack of supporting evidence could be detrimental to the opponent’s case. However, no evidence has been submitted to refute the first exhibit indicating the offer to trade in the goods. I find, on the balance of probabilities, that this element of section 58 is established.

    Same kind of thing

15. While the expression the “same kind of thing” (Hicks (supra)) is not defined in the legislation, it has been accepted by the courts and the Trade Marks Office[3] that it is a concept narrower in scope than the test for “goods of the same description” as set out in Jellinek's Application (1946) 63 RPC 59.

    [3] M Davison, et al, Shanahan’s Australian Law of Trade Marks and Passing Off (4^th ed. Lawbook Co, 2008) at [50.2235].

16. Taking the respective goods and the definition of Xylitol into consideration, it is possible that the goods of the opponent (“directly compressible Xylitol”) could be a sweetener ingredient contained within many of the applicant’s goods in classes 3 and 5. While a trade mark can have significance as an ingredient (as the opponent submits), this does not necessarily make the ingredients of a particular good the “same kind of thing” as the overall final product. Neither should a consideration of “the same kind if thing” take into account the possibility of “brand extension” by the opponent, which would be more appropriate for the ground of opposition under section 60.  In any event, I am not convinced that these goods are the same kind of thing in this case.  

17. It is worth noting that the applicant’s specification in class 5 includes the goods “medicinal dietetic foods, substances, preparations…” and “medicated preparations”, and that compressible Xylitol is an artificial sweetener in the form of a chemical preparation (and would be properly classified in Class 1). While directly compressible Xylitol is a chemical sweetener substance, I am not satisfied that it could be described as the “same kind of thing” as a medicinal (or medicated) substance or preparation. While it may have certain benefits over sugar (for example), it is not curative in nature and is primarily used as a substitute for sweetening other goods.    

18. In summary, the opponent’s evidence does establish a bona fide offer to trade utilising the trade mark “Xylitab 200”. However, the ground of opposition fails as I find that the goods of the applicant and those of the opponent are not the “same kind of thing”. On the balance of probabilities, the ground of opposition under section 58 has not been established.

    Section 59: Applicant not intending to use trade mark

    The registration of a trade mark may be opposed on the ground that the applicant does not intend:

    (a) to use, or authorise the use of, the trade mark in Australia; or

    (b) to assign the trade mark to a body corporate for use by the body corporate in Australia;

    in relation to the goods and/or services specified in the application.

    Note:  For applicant see section 6.

19. It is well established that the act of filing an application for registration is prima facie evidence of the requisite intention on the part of the applicant to use that trade mark (see Aston v Harlee Manufacturing Co (1960) 103 CLR 391). Under section 59, the opponent bears the onus of establishing a prima facie case of the applicant’s lack of intention to use the trade marks, by producing sufficient evidence to shift the onus to the applicant.

20. While the applicant elected not to produce any evidence indicating use of its trade mark, I am not of the view that this fact alone is sufficient to shift the onus under section 59 to the applicant. The fact that the applicant is not relying on evidence may only work in the opponent’s favour if I find that the opponent has raised issues in its evidence which require an answer by the applicant. An allegation unsupported by evidence, or the mere nomination of the section 59 ground cannot shift the onus to the applicant (Medley Distilling Co v Croakers Gully (Aust) Pty Ltd (2000) 53 IPR 430).

21. The opponent has made the submission that “the absence of use is instructive of an absence of intention to use”. Once again, the applicant’s omission would only be instructive if the opponent had produced some further evidence supporting an inference of a lack of intention to use the trade mark. By itself, a “failure on the part of the applicant to establish its capacity to use the mark is in no sense evidence of lack of such capacity or intention” (Intel Corporation v Magnatex International Pty Ltd (1998) 41 IPR 406 (at 412).

22. In relation to the lack of evidence of trade mark use, the applicant has submitted that it has delayed product release pending this opposition. While I have only given this submission the weight of an unsworn assertion, I accept that it is not unusual for an applicant to delay use of a trade mark pending outcome of the application for registration (as in Paintmaster Products v Lewis Berger & Sons (1955) 25 AOJP 1915 [at 1921] (Reg); Virgin Enterprises Ltd v Virgin International Pty Ltd (2006) 68 IPR 304 [at 309]). I am not satisfied that the opponent has discharged the onus of producing sufficient material to require a response from the applicant.

23. The ground of opposition under section 59 of the Act has not been made out.

    Section 60: Trade mark similar to trade mark that has acquired a reputation in Australia

    The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

    (a)another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

    (b)because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

24. For an opposition under section 60 to be successful, the Australian reputation existing in the opponent’s trade mark XYLITAB 200 (on 24 November 2006) needs to be such that the use of the applicant’s trade mark XYLITAB would be likely to deceive or cause confusion in the marketplace. In ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 [at 343]; 23 IPR 193 [at 343], Lockhart J:

    [R]eputation within the jurisdiction may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum and that people within the forum (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner.

25. The extent of the evidence submitted in this matter has been addressed under the part of this decision relating to the section 58 ground of opposition. The wholesale purchases of goods under ‘Danisco’s trade mark’ from 2004-2008 (Paragraph 8) are variable and only indicate some economic growth from 2004-2006. The opponent has not provided any examples of advertisements or promotional material bearing the trade mark.

26. While the reputation in a trade mark can be determined by the extent of sales and as a result of the “esteem” in which the mark is held (McCormick & Company v Mary McCormick (2000) 51 IPR 102 per Kenny J at paragraph 85), I find that the opponent has provided little or no evidence of consumer appreciation of its XYLITAB trade mark beyond an indication of the number of sales under the trade mark and statements unsupported by evidence. In matters before the Registrar, mere assertions of use (including assertions of extensive use) without documentary support are given little weight (see Great White Shark Enterprises Inc v Joose Apparel Pty Ltd (1998) 41 IPR 208; Steen Petersen v Daniel Baden and Garth Harris [2003] ATMO 83; in the context of non-use applications under section 92 of the Act).

27. I find that the opponent did not enjoy a reputation in its trade mark amongst a substantial number of the relevant Australian consumers prior to 24 November 2006, such that the use of the applicant’s trade mark would be likely to deceive or cause confusion in the marketplace. The ground of opposition under section 60 has not been established.

    Section 42(b): Trade mark use contrary to law

    An application for the registration of a trade mark must be rejected if:

        (b)  its use would be contrary to law.

28. The criterion for section 42(b) of the Act is whether the use of the applicant’s mark “would” not “could” be contrary to law (Advantage Rent-A-Car Inc v Advantage Car Rental Pty Ltd (2001) 52 IPR 24 at 32 [28] (FC)). The opponent maintains that the use of the applicant’s trade mark would amount to conduct that is misleading or deceptive or likely to mislead or deceive and/or suggests a sponsorship, approval, affiliation or association with the opponent under sections 52 and 53 of the Trade Practices Act 1974 (Cth) (“TPA”).

29. I have found that the reputation in the opponent’s trade mark under section 60 was not sufficient to result in the use of the applicant’s trade mark to deceive or cause confusion in the marketplace. To establish a breach of the TPA in this matter would require more evidence than that provided by this single customer of the opponent. The number of persons likely to be aware of the opponent’s product is not significant, making the similarities between the applicant’s and the opponent’s trade marks commercially irrelevant.

30. I do not find that the conduct of the applicant in the use of its trade mark would amount to misleading or deceptive conduct (under section 52) or that it would breach those specific provisions of false or misleading representations under section 53 of the TPA. The opponent’s reputation in its trade mark in Australia at the time of applicant’s filing date was insufficient to satisfy the threshold requirement for section 60. It follows; therefore, the ground of opposition under section 42(b) of the Act has not been established.

    Decision

    Section 55: Decision

    (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.

1. The opponent has not discharged the onus of establishing a ground of opposition under that Act. As a result, the opponent is unsuccessful and 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

2. Both parties have requested an award of costs in this matter. As the opposition is unsuccessful, the applicant is entitled to costs. Accordingly, I award costs against the opponent to the extent allowed under the Official Scale contained in Schedule 8 of the Trade Mark Regulations 1995.

   Heath Wilson
   Hearing Officer
   Trade Marks Hearings
   19 October 2009