Debonair Trading Internacional Lda v LOreal SA - [2016] ATMO 134

TRADE MARKS ACT 1995

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

Re:Opposition by Debonair Trading Internacional Lda to registration of trade mark application 1617340(3) - SO COUTURE - in the name of L'Oreal S.A.

Delegate:	Heath Wilson
Representation:	Opponent: Siobhan Ryan of Counsel instructed by Davies Collison Cave. Applicant: Written submissions from Gerard Skelly of Shelston IP.
Decision:	2017 ATMO 134 Opposition under section 52 of the Trade Marks Act 1995 – grounds pursued under sections 44 and 60 - section 60 established – trade mark refused registration.

Background

The current matter concerns an opposition under section 52 of the Trade Marks Act 1995 (‘the Act’) to the registration of a trade mark. On 14 April 2014, L’Oreal S.A. (‘the Applicant’) applied to register a trade mark, the relevant details of which are extracted below:
Trade Mark No: 1617340
Trade Mark: SO COUTURE (‘the Trade Mark’)
Specification of Goods: Class 3: Make-up preparations.
The Trade Mark was examined under section 31 of the Act and accepted for possible registration. Advertisement of that acceptance appeared in the Australian Official Journal of Trade Marks on 4 September 2014.
On 31 October 2014, Debonair Trading Internacional Lda (‘the Opponent’) filed a Notice of Intention to Oppose (‘NIO’) and later filed a Statement of Grounds and Particulars (‘SGP’) setting out grounds of opposition under sections 42(b), 44 and 60 of the Act. The NIO and SGP together comprise the notice of opposition to the registration of the Trade Mark.
The Applicant then filed a Notice of Intention to Defend and the evidence stages of the opposition proceedings commenced, resulting in the filing of the evidence below:

Evidence

Evidence in Support

Declaration of Karim Gangji (Director of Incos Limited, the exclusive licensee of the Opponent) made 17 April 2015 with exhibits KG-1 to KG-23.

Evidence in Answer

Declaration of Jose Monteiro (General Counsel for Trademark & Intellectual Property matters of the Applicant) made 27 August 2015 with annexures 1 to 3.
Declaration of Gerard Skelly (Legal Practitioner and Consultant for Shelston IP) made 1 September 2015 with annexures GJS-1 to GJS-3.

Evidence in Reply

Declaration of Karim Gangji made 6 November 2015 with Annexures KG-24 to KG-26.

The parties to this opposition subsequently requested a cooling off period which expired in due course and the Opponent requested to be heard on the opposition.
The matter was allocated to me, to be decided in my capacity as a delegate of the Registrar of Trade Marks. In accordance with my directions, both the Opponent and the Applicant provided written submissions in support of their respective positions.
The hearing took place in Canberra on 25 August 2017. Siobhan Ryan of Counsel appeared on behalf of the Opponent instructed by Davies Collison Cave. The Applicant elected to rely solely on its written submissions prepared by its legal representative, Gerard Skelly of Shelston IP.

Grounds and Onus

The Opponent only pressed the grounds of opposition under sections 44 and 60. The Opponent bears the onus of establishing at least one of these grounds on the civil standard of the balance of probabilities.[1] The rights of the parties are to be determined as at the date of the application[2] which is generally, but not always, the filing date.[3] For this opposition, the relevant date is 14 April 2014.

Reasons

[1] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] affirming the approach of Gyles J in Pfizer Products Inc. v Karam [2006] FCA 1663, [26].

[2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82; (1954) 91 CLR 592, 595.

[3] See sections 6, 12, and 72 of the Act.

Section 60

Section 60 of the Act provides:
60Trade 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.
Note:For priority date see section 12.
In terms of the level of reputation required for the first limb of section 60 to be established, Australian legal precedent points to a requirement that a ‘significant’ or ‘substantial’[4] number of consumers within the relevant trade (rather than the Australian public as a whole) must be aware of the other trade mark. The assessment of what is ‘significant’ or ‘substantial’ must be properly and sensibly applied[5] and may depend on the specialised nature of the relevant market.[6] The reputation must have been acquired in a trade mark and be extant in Australia as at the priority date (in this case, 14 April 2014).
[4] See Renaud Cointreau & Cie v Cordon Bleu International Ltee (2001) 52 IPR 382; [2001] FCA 1170 and ConAgra Inc. v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 23 IPR 193.
[5] “Bali” Trade Mark [1969] RPC 472, (496).
[6] Le Cordon Bleu BV v Cordon Bleu International Ltee (2001) 50 IPR 1; [2000] FCA 1587, [20].
Once the relevant reputation in a trade mark (or trade marks) has been established, the second limb regarding the likelihood of deception or confusion must also be satisfied. Under this limb, the Registrar must consider the notional use of the Trade Mark against the demonstrated reputation of the Opponent’s trade mark(s). It is not a requirement that the respective trade marks be ‘deceptively similar’ nor that the claimed goods be similar to the goods in which the reputation of the Opponent’s trade mark(s) reside. However, where those elements are present, this will increase the likelihood of deception or confusion in the Australian marketplace arising from the reputation in the Opponent’s trade mark(s).

Reputation acquired in Australia by the Opponent’s trade mark

Karim Gangji is the Director of Incos Limited, being the exclusive licensee of the Opponent. The first declaration of Karim Gangji sets out details of the Opponent’s relevant Australian trade mark registrations owned by the Opponent and describes them as the ‘SO…? trade marks’. For the avoidance of doubt, each of the Opponent’s Australian SO…? trade marks relied upon below is a separate trade mark[7] for the purposes of assessing the section 60 ground of opposition:
[7] Qantas Airways Limited v Edwards [2016] FCA 729, [160].

TM No.	Trade Mark	Priority Date	Class of Goods
590601	SO…?	18.11.92	3
752909	SO…? DESIRABLE	16.1.98	3
818897	SO MAX	30.12.99	3
881980	SO…? KISS ME	31.1.01	3
1072420	SO…? SINFUL	3.3.05	3
1115895	SO…? SUPERSTAR	8.12.05	3
1176493	SO…? SENSUAL	7.12.06	3
1278646	SO…? ETERNAL	10.7.08	3
1324495	SO…? SEXY	17.8.09	3
1358663	SO…? BRIT	29.4.10	3
1390421	SO…? EXCLUSIVE	29.4.10	3
1491687	SO…? SEDUCTIVE	24.11.11	3
1491689	SO…? ADDICTIVE	24.11.11	3
1492187	SO…? GLAMOROUS	22.05.12	3

For convenience, I will refer to these trade marks collectively in the same fashion as the Opponent while noting that a significant reputation in Australia needs to be demonstrated in one or more of them for the requirement under section 60(a) of the Act to be satisfied.
Mr Gangji says that the Opponent has licensed other companies to produce, supply and market its cosmetics and fragrances under the SO…? trade marks in countries including the United Kingdom, Belgium, Denmark, India, Mexico, Poland, Switzerland, United Arab Emirates, United States, Brazil, Germany, Ireland, Netherlands, Portugal, Australia, Canada, France, Italy, New Zealand, Russia, Finland, Norway, Croatia, Malta, Saudi Arabia and Sweden. In addition to the SO…? trade marks, the Opponent also owns numerous trade mark applications and registrations in other jurisdictions.
The first Gangji declaration provides that the goods sold in Australia under the SO…? trade marks include perfumery, cosmetics, body sprays, fragrances, body lotions, shower gels, lip balms and lip glosses with young women as the target audience. Despite this declaration, the evidence predominantly concerns use of only some of the SO…? trade marks upon or in relation to perfumery, body fragrances and body sprays with only some limited use in relation to body lotions and shower gels.
Exhibit KG-3 to the first Gangji declaration is an undated example of ‘SO…?’ (solus) branded eau de toilette with no explanation as to whether it is a representation of the particular goods sold in Australia and if so, the quantity of this product sold. Exhibit KG-4 is declared to be photographs of cosmetic and perfume gift sets sold in Australia bearing the trade marks ‘SO…?’, ‘SO…? Kiss me’ and ‘SO…? SuperStar’. Once again, the declaration does not provide a timeframe for when these gift sets may have been offered for sale, or if they have been sold in Australia.
A sample of the Opponent’s online activities from 2009 to 2015 has been supplied at exhibit KG-5 and I note from this that the Opponent has promoted all of its products via its website ‘ on the licensee’s ‘Facebook’ page, on ‘Instagram’ and via mail outs. There is also evidence of an in-store campaign at a Sydney clothing and accessories store named ‘Supré’ in April 2006 to promote the ‘SO…? Sinful’ fragrance line and associated promotions from the ‘Supré’ website. In addition, there have been promotions on Gold Coast radio in 2004 (‘Radio Metro’) promoting ‘SO…? Kiss me’ fragrances at an under 18s dance party (named ‘Groovelicious’) held on the Gold Coast.
The Opponent has also provided evidence of a contest from 2010 which gave Australian consumers the opportunity to be the first to own the ‘So…? Sensual’ eau de toilette and also mentions the other fragrance brands of the Opponent, presented as ‘So…? Eternal’, ‘So…? Kiss me’ and ‘So…? Sinful’.
I also note that the respective products of both the Opponent and Applicant have been sold concurrently at Priceline Pharmacy. As an example, exhibit KG-23 displayed the Opponent’s body spray for women ‘SO…? Kiss Me’ and the Applicant’s mascara product ‘Volume Million Lashes So Couture’ in conjunction with the well-known ‘L’Oreal’ brand of the Applicant.
Exhibit KG-14 displays print advertising from 2008 and 2009 featuring some of the SO…? trade marks in prominent teen magazines such as ‘Dolly’, ‘CLEO’, ‘Girlfriend’ and ‘Total Girl’ and also in product brochures and catalogues from ‘Chemworld’, ‘Priceline’ and ‘Target’. The various reputations of the SO…? trade marks are evidently in connection with body sprays and perfume aimed mainly at the female teen/young adult market, but it is also clear from the examples provided that various SO…? trade marks are also used on other products within promotional gift sets (such as shower gels and body lotions).
At this point, I should reiterate that to establish the requisite reputation under section 60 of the Act, “the ‘other’ mark need not have acquired a reputation in Australia that is specific to the goods or services which are the subject of the opposed application.”[8]
[8] Qantas Airways Limited v Edwards [2016] FCA 729, [143].
The sales figures for Australia in relation to products sold under the ‘SO…? trade marks’ are significant although they have not been broken down into the respective trade marks that the Opponent uses. While the same criticism may be levelled at the Opponent’s substantial advertising figures, this does not make such evidence irrelevant and there are nevertheless many ways in which the requisite reputation in a trade mark may be demonstrated. As Kenny J made clear in McCormick & Company Inc. v McCormick[9]:
It may be correct to say, as counsel for Mary McCormick did, that the volume of the company's sales does not directly establish that a significant number of people held the McCormick & Co marks, as distinct from the company's products, in favourable regard. It does not follow, however, that the volume of sales and promotional expenditures are irrelevant. As Hearing Officer Thompson observed in Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl GmbH & Co KG (1999) 47 IPR 423 ("Hugo Boss") at 436:
[I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.
As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also the esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the `recognition' component of the trade mark's reputation. The credit, image and values projected by a trade mark attaches to the `esteem' component of the reputation as do the public events and other trader's marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, `contra deals' and so forth.
It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.
[9] [2000] FCA 1335, [85] (My emphasis in bold).
I note that Mr Skelly’s submissions, provided on the Applicant’s behalf, take a systematic approach to pointing out the deficiencies in the Opponent’s evidence. Some of the Opponent’s evidence is dated after 14 April 2014 or may be examples from foreign jurisdictions (with little indication of how that use would translate in the Australian market). Some of the criticisms made by Mr Skelly are valid regarding the scope of the reputation demonstrated by specific examples but I am of the view that, when taken as a whole, the Opponent’s evidence of a substantial reputation in particular SO…? trade marks before the priority date cannot be ignored. In particular, I find that there are sufficient examples and instances of use through the extensive advertising conducted by the Opponent to demonstrate a substantial reputation amongst the relevant market in Australia for the Opponent’s ‘SO…?’, ‘SO…? Kiss Me’, ‘SO…? Sinful’ and ‘SO…? Sexy’ trade marks existing at the priority date. I will now therefore turn to the second limb of the consideration under section 60.

Likelihood of Deception or Confusion

As mentioned earlier, the nature of the consideration under section 60 is whether the notional fair use of the Trade Mark is likely to deceive or confuse consumers in light of the demonstrated reputation in the Opponent’s trade mark(s). Some examples provided in the evidence demonstrate that the actual use of the Trade Mark to date on products such as mascara and eyeliner has invariably featured the Applicant’s well-known ‘L’Oreal’ trade mark. However such use is not relevant to the question of a likelihood of deception or confusion as 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.’[10]
[10] Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365; 45 IPR 411; [1999] FCA 1020, [50].
The presence of a reputation in the Trade Mark at the priority date is largely irrelevant[11] to the question before me in determining the likelihood of deception or confusion arising from the notional use of the Trade Mark. Having said that, the examples of actual use of the Trade Mark in conjunction with another well-known trade mark (L’Oreal’) may explain the apparent lack of actual confusion to date in the marketplace between the Trade Mark and the SO…? trade marks with a demonstrated reputation.
[11] See Optical 88 Limited v Optical 88 Pty Limited and Others (No 2) (2010) 275 ALR 526; 89 IPR 457, (190).
The Trade Mark is sought to be registered in relation to ‘make-up preparations’ and the reputation of the aforementioned ‘So… trade marks’ demonstrated by the Opponent is largely in relation to perfumery, but fragrances and cosmetics are often sold concurrently, through similar trade channels and beauty products are often perfumed. Nevertheless, as I have said, it is not a requirement that the goods of the Trade Mark are the same or even similar to those in which the Opponent’s trade mark’s (or trade marks’) reputation resides.
The fact that the demonstrated reputation is in relation to products directed towards teenage girls and young women does not alter the likelihood of confusion in this case. This is because the Trade Mark is claiming registration for all ‘Make-up preparations’ which includes make-up preparations for teenage girls and young women. The target market is, therefore, notionally the same.
I am not entirely convinced by Ms Ryan’s submission that young girls in the ‘tween’ to ‘teen’ age group are not known for their product discernment. The cost of such items can vary, but the Opponent’s products are relatively inexpensive and I would not characterize the Applicant’s mascara (which is an example of the type of product that may fall under the specification ‘makeup preparations’) as an expensive or specialist item. In that context, consumers of these products are I think less likely to be attentive to differences that may exist between the trade marks and purchase more on the strength of the established reputation in the Opponent’s trade marks.
Turning to the similarities between the trade marks, the particular construction of the Trade Mark would be perceived by consumers as having connotations of high fashion or designer fashion. Although there is no evidence of a reputation established in some of the SO…? trade marks, I note that the Opponent’s earlier filed trade mark registrations for ‘SO…? GLAMOROUS’ and ‘SO…? EXCLUSIVE’ may also be said to have a similar connotation or meaning to the Trade Mark. The evidence establishes the Opponent’s propensity for using many variations on the word ‘SO…?’ followed by an adjective in relation to perfume (e.g. ‘SO…? SINFUL’, ‘SO…? DESIRABLE’, ‘SO…SEXY’). Due to the amount of this kind of brand variation demonstrated in the Opponent’s family of trade marks, relevant consumers would most likely be accustomed to this practice and more likely to perceive the Trade Mark as a further addition to that family.
Even if the SO…? trade marks and the Trade Mark are not ‘deceptively similar’ (as that expression is defined under the Act), there remains the above level of similarity between them. Ms Ryan pointed out the particular punctuation elements in the Opponent’s trade marks would not be evident in an aural comparison and the Opponent’s trade marks would not be posited as questions but instead be an expression spoken simply as (for example) ‘SO DESIRABLE’, ‘SO SINFUL’ or ‘SO SEXY’. I agree, and I find that a difference in punctuation would not make any appreciable difference to the relevant consumer. If such a visual difference were noticed, I do not think it would overcome the likely conclusion in the mind of the consumer that the respective products originate from the same trade source.
It should not be concluded from the above finding that the Opponent enjoys a monopoly in all trade marks commencing with the word ‘SO’. As is often the case, it will depend on the relevant circumstances including the presence of any other word or device element present in the trade marks, the state of the marketplace and its consumers and the nature and extent of the reputation demonstrated by the Opponent for each of its trade marks. Where those factors align, then deception or confusion will be the likely result.

In relation to the expression ‘likely to deceive or cause confusion’, Kitto J found in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd that:
It is not necessary, in order to find that a trade mark offends against the section, to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of its occurring… it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt.[12]
[12] [1954] HCA 82; (1954) 91 CLR 592, (595).
The nature of confusion required for section 60 need not lead to actual sales of the product as Heerey J found in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd:
A probability of confusion, if it is real, is sufficient even though the confusion may be unlikely to persist up to the point of, and be a factor in, inducing actual sales: Southern Cross at CLR 495. There may be confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived: Re Hack's Application (1940) 58 RPC 91 at 103–4.[13]
[13] Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd [1997] FCA 623.
Given the significant extent of the trade mark use demonstrated in the Opponent’s evidence, I consider there is a real, tangible likelihood of deception or confusion occurring from use of the Trade Mark in relation to the goods claimed within the specification. Accordingly, I find that the ground of opposition under section 60 of the Act has been established by the Opponent on the balance of probabilities.
In light of the above finding, it is therefore unnecessary to consider the other ground of opposition pursued under the Act. Should this decision be appealed to a prescribed court the Opponent will be open to pursue those other grounds available under the Act in any event.

Decision

55Decision
(1)Unless subsection (3) applies to the proceedings, 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.

A ground of opposition has been established. As a consequence, I refuse to register trade mark application no. 1617340.

Costs

As the Opponent is the successful party and costs generally follow the event, I award costs against the Applicant under section 221 of the Act in accordance with the applicable amounts set out in Schedule 8 of the Trade Marks Regulations 1995.

Heath Wilson
Hearing Officer
Oppositions and Hearings
2 November 2017