Duco Magic (Australia) Pty Ltd v ICI Australia Operations Pty Ltd

[1998] ATMO 3

TRADE MARKS ACT 1955

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

Re:      Opposition by ICI AUSTRALIA OPERATIONS PTY LTD to applications          under section 23 of the Act by DUCO MAGIC (AUSTRALIA) PTY LTD to    remove the trade marks of registrations numbers 44667 and 250626 from the
           Register

As provided in the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act 1955 continue to govern this opposition.  Accordingly, unless otherwise specified, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.

Applications under the provisions of section 23 of the Act to remove trade marks of registrations numbers 44667 and 250626 from the Register were lodged on 7 March 1995 by Duco Magic (Australia) Pty Ltd (the applicant).

The applications were opposed on 7 November 1996 by ICI Australia Operations Pty Ltd (the opponent), who is also the registered proprietor of the marks.

The trade mark of registration number 44667 is the word DUCO in respect of a statement of goods:

“paints, lacquers, varnishes, enamels and enamel paints, and pyroxylin finishes and thinners”.

The statement of goods of registration number 250626 reads:

“paints, varnishes, lacquers; preservatives against rust and against deterioration of wood including wood filler and putty compositions; metals in foil and powder form for painters and decorators”,

and the trade mark of that registration is reproduced here: 
  

In its removal applications, the applicant relies on the ground based on para 23(1)(a), that the trade marks were registered without an intention in good faith on the part of the applicant for registration that the marks should be used in relation to the goods specified and that there has, in fact, been no use in good faith of the trade marks in relation to those goods by the registered proprietor or a registered user of the trade marks for the time being earlier than 1 month before the application.  In terms of para 23(1)(b), it claims that up to one month before the date of the applications, a continuous period of not less than 3 years has elapsed during which the trade marks were registered and during which there was no use in good faith of the trade marks in relation to the goods specified by the registered proprietor or a registered user of the trade marks for the time being. 

The notices of opposition contain seven grounds of opposition.  At the hearing, the opponent advised that it would be pursuing only the following grounds: it will deny the allegations made in the applications for removal of the marks, it will claim that a number of the registered proprietor’s trade marks which were associated with the subject trade marks had been used by the registered proprietor, a registered user, or a licensee of those trade marks for the time being during the periods specified in the applications for removal, it will maintain that the removal applicant is not a person permitted under section 34 to register a substantially identical or deceptively similar trade mark in respect of the goods to which it relates, and that neither the registered proprietor nor any of its predecessors in title has ever abandoned or intended to abandon use of the trade marks.

The applicant’s evidence in support consists of a statutory declaration by Warwick David Lindsay, dated 13 November 1996, with exhibits A - E.

As evidence in answer the opponent has lodged a statutory declaration by Robert Charles Kelson, dated 18 February 1997, with exhibit RCK-1 and a statutory declaration by William Matthews, dated 20 May 1997, accompanied by exhibits WM2 - WM11.

The applicant did not lodge any evidence in reply.

A hearing on the matter came before me, as the Registrar’s delegate, in Canberra.  The applicant was represented by Mr Peter Fisher of Fisher Adams Kelly, patent and trade mark attorneys of Brisbane.  Mr Barry Hess of Counsel appeared for the opponent.

Discussion
Section 23 of the Act provides that:

23.(1)  Subject to this section and to section 93, a prescribed court or the Registrar may, on application by a person aggrieved, order a trade mark to be removed from the Register in respect of any of the goods or services in respect of which it is registered, on the ground -

(a)         That the trade mark was registered without an intention in good faith on the part of the applicant for registration that it should be used in relation to those goods or services by him, or if it was registered under sub-section (1) of section 45, by the body corporate or registered user concerned, and that there has, in fact, been no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or a registered user of the trade mark for the time being earlier than 1 month before the application;

(b)         that, up to 1 month before the date of the application, a continuous period of not less than 3 years had elapsed during which the trade mark was a registered trade mark and during which there was no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or a registered user of the trade mark for the time being.

A person aggrieved
On behalf of the applicant Mr Fisher submitted that the applicant had chosen its mark on the understanding that the word DUCO was a term commonly used to describe paint finishes on motor vehicles.  This assumption was widespread as attested in the applicant’s evidence.  At the time of adopting the trade mark of application 591509 shown here
  

the applicant was not aware of the opponent’s registered marks.  These marks had been raised as citations in terms of section 33 against the applicant’s mark at the examination stage of the application.  The applicant’s business had been adversely affected by the applicant’s inability to register the trade mark as it has been opposed by the present opponent.  The dispute with the opponent prevented the franchising and expansion of its business.  The applicant was therefore a person aggrieved in accordance with the interpretation of that phrase expressed in Powell’s Trade Mark (1894) 11 RPC 4 and in Ritz Hotel Ltd v Charles of the Ritz Ltd 12 IPR 417, where McLelland J explains, at 454:

[t]he meaning of the expression “person aggrieved” in legislation cognate with s 23(1) of the Act has been the subject of consideration in numerous cases ... Decisions of high authority appear to me to establish that the expression has no special or technical meaning and is to be liberally construed ... It is sufficient for present purposes to hold that the expression would embrace any person having a real interest in having ... the trade mark removed in respect of any goods, as the case may be, in the manner claimed, and thus would include any person who would be, or in respect of whom there is a reasonable possibility of his being, appreciably disadvantaged in a legal or practical sense  ... by the trade mark remaining unremoved in respect of any goods .... In my opinion the concept does not admit of further refinement. 

This position, Mr Fisher said, was supported in Kraft v Gaines Pet Foods 34 IPR 198 and Goldberg and Another v John Brown Hosiery Pty Ltd 36 IPR 161. The applicant was also a person aggrieved in the sense stated by Hill J, i.e. that a person is not aggrieved if it is merely an applicant for a trade mark but neither uses that mark, nor intends to use it in the future, which principle had been approved by the Full Court in Kraft v Gaines and applied in an unpublished Trade Marks Office decision Coors Brewing Company v Carlton and United Breweries Limited, issued on 12 May 1997, because in the evidence in support the applicant for removal has shown use of its mark in accordance with its business since at least December 1992.  The applicant was not an officious interferer but was entitled to the status of a person aggrieved on the grounds of substantial business interests in having the registered marks removed, as well as the impediment created by the opponent in opposing registration of its mark. 

On this question, Mr Hess responded asserting that the applicant had failed to demonstrate its standing in the matter.  In furthering his arguments he referred to Ritz Hotel v Charles of the Ritz and Kraft v Gaines, both supra.  He reminded me that the applicant must be a person aggrieved at the time of lodging its application for removal of which, he said, there was no evidence.  The applicant could not be inconvenienced by any of the citation objections based on the opponent’s registrations, because the applicant’s mark had been accepted, Mr Hess said. 

Moreover, he continued, from a letter of 4 January 1995 included as an exhibit in the evidence in support, it was clear that the applicant did not manufacture automotive paints and polishes.  In submitting that the applicant, being a service company - a repairer of damaged paintwork on cars - was not a trader in the relevant goods and therefore did not qualify as a person aggrieved, Mr Hess referred to the words of Sackville J in Kraft v Gaines, at 207-208:

While care must be taken not to introduce too much refinement, the authorities have identified certain circumstances in which an applicant for removal of a trade mark is, or is very likely to be, a “person aggrieved”.  Powell v Birmingham Brewery [(1897) 14 RPC 720] illustrates that a person who is in the same trade as the registered proprietor of the mark and who shows that he or she will use the mark, is ordinarily a “person aggrieved” for the purposes of a removal application. A trader who has dealt in the same class of goods as the registered proprietor and shows that he or she could use the mark, establishes a prima facie case that he or she is a person aggrieved for the purposes of a removal application. The inference may be rebutted by evidence from the objector, demonstrating that the applicant would not take advantage of the opportunity to use the mark, but in the absence of such evidence the prima facie inference remains. A person who has used a mark, especially if the mark has been used on a similar class of goods, and who remains in the same business, also will usually be a “person aggrieved” for the purposes of s 23(1) of the TM Act.

As pointed out by Mr Fisher, registration of the applicant’s mark number 591509, which was advertised as accepted on 16 February 1995, is blocked by being opposed by the opponent in the present proceedings.  This application is seeking registration of the mark in respect of services “automotive paint touch-up processes” which, according to the guidelines set out in Australian Law of Trade Marks and Passing Off, second edition, by D R Shanahan, at 193-194, constitute closely related services to at least paints and lacquers which are encompassed in the statements of goods of the subject registrations.  This is supported by the nature of the applicant’s services in that paint is applied in the process of repairing damaged paintwork on cars, even though the applicant itself does not manufacture the paint for that purpose.  Although the notice of opposition to registration of the applicant’s mark was lodged on 16th May 1995, i.e. subsequent to the date of the removal applications, it appears that the applicant was contacted by the opponent with a request not to use the word ‘duco’ in its mark.  This is evidenced in a copy of a record of a telephone conversation by Mr Warwick Lindsay with an examiner, dated 9 February 1995, which is attached to the file of the application.  From this record, it seems to me, that the applicant was aware of the opponent’s intention to oppose the mark and therefore took the steps to institute the removal action of the subject marks by lodging the applications under the provisions of section 23 of the Act on 7 March 1995.

In light of the potential opposition, which is obviously interfering with the progress of the applicant’s mark to registration as well as the inconvenience to the applicant and the likelihood of future litigation, I believe that, at the time of lodging the applications for removal, the applicant qualified as a person with a real interest in having the marks removed from the Register and who was appreciably disadvantaged in a legal or practical sense, within the concept of a person aggrieved, as per McLelland J in Ritz v Charles of the Ritz, supra, as quoted above.  In addition, from the history of the opposition process on application 591509, I note, as I am entitled to, that it has progressed to the lodgment of the evidence in reply stage, part of the evidence having been lodged, which suggests serious opposition to registration of the applicant’s mark with the consequential delays and inconvenience that will be caused to the applicant by the process. 

Prima facie case
Having established its locus standi, the applicant needs to make out a prima facie case of non-use of the subject trade marks.  The fact that the burden of proof of non-use of a trade mark rests with the applicant for removal has long been established and is enunciated by Windeyer J in Estex Clothing Manufacturers Pty Limited v Ellis and Goldstein Limited (1967) 116 CLR 254, at 258:

It is for the applicant who seeks to have a mark removed to prove its case.  The onus is on him to show an absence of use in goods faith during the period.  If persons who, by reason of their connexion with the relevant trade, might be expected to have seen or heard of the mark if it were used as a trade mark upon goods for which it is registered, swear that they had not seen or heard of it in use as a trade mark at any time during the relevant period, that is prima facie evidence of the fact which the applicant must prove.  Slight evidence may suffice at this stage, for the applicant has the task of proving a negative and the registered proprietor is probably in a better position to prove user than is the applicant to prove non-user.  But if evidence be given for the respondent to controvert the applicant’s prima facie case, then when all the evidence is complete the question is still, has the applicant proved his case?

In support of the alleged non-use of the opponent’s marks the applicant relies on a statutory declaration by Mr Lindsay, the general manager of the applicant’s company, who states that, in the course of purchasing paints for use in the applicant’s automotive and touch-up business and during his involvement in the automotive appearance trade from 1980 to date, he has not seen paints bearing the DUCO trade mark.  In the conduct of the applicant’s business he has been responsible for purchasing automotive paints from various paint manufacturers and has acquired a vast knowledge and awareness of different brands available for use in the automotive paint trade.  During the period 1994 - 1995 when the applicant had purchased automotive paint from the opponent, it had been advised that paints under the DUCO mark were no longer available and had not been available for many years.  Mr Lindsay’s statements, Mr Fisher said, had been corroborated by the survey comprising statutory declarations from members of the trade who would have a very good knowledge of the range of relevant products and also of the related industries.  Mr Hess, however, criticised the supporting declarations in that all but one of the declarants were located in the state of Queensland, that many of them, such as dealers of cars, were not concerned either with the trade of the relevant goods or use of those goods, that only a handful of them fitted in the relevant category of persons who would be in a position to known the trade marks associated with the goods, and that all the questions put to the declarants related only to automotive paints.  He pointed out that at least two of the declarants were fully aware that the word DUCO refers to a re-launched paint product.  He observed that those declarants who were expected to be aware of the marks, such as repairers or suppliers, had heard of the mark DUCO. 

With reference to Aikin J’s judgment in Pioneer Electronic Corp v Registrar of Trade Marks (1977) 17 ALR 43, at 55, which has been quoted in Murray v Major League 33 IPR 362, Mr Fisher also said that the essential requirement for maintenance of the validity of a trade mark was that it must indicate a connection in the course of trade. The word DUCO, however, particularly in respect of paints and lacquers, had become generic and therefore no longer indicated the required connection. In reply to this submission, Mr Hess did not believe the present forum was appropriate for such a proposition and that Estex v Ellis and Goldstein, supra, clearly set down the guidelines of what evidence each of the parties was expected to produce in proceedings concerning removal of a mark from the Register.  

Having assessed the applicant’s evidence and considered the submissions from both parties, in my opinion, the applicant has succeeded in establishing at least a prima facie case that the trade marks DUCO have not been used by the opponent in relation to paints during the relevant period for the purpose of section 23 which, in the present case, is from 7 February 1992 to 7 February 1995.  I do not think much turns on the inconsistency pointed out by Mr Hess where Mr Lindsay states that, on the one hand, at no stage he was aware of the word DUCO being a trade mark or a name of a specific paint and then later says that during the period his company was purchasing paint from a division of the opponent’s company, it had been advised of the paint not having been marketed under the trade mark DUCO for a long time.  Nor can I agree with the proposition that motor vehicle dealers are unlikely to be familiar with different trade marks applied to automotive paint.  While four persons dealing with car sales have actually acknowledged that they do not possess substantial knowledge and awareness of the trade marks used in the automotive paint trade, one of them recognizes the DUCO mark but does not remember how long ago he saw a product bearing the mark.  Of the dealers who claim to have extensive knowledge of trade marks, five have known the mark some time ago and three of them relate it to “Dulux” - Dulux Australia, a division of the opponent’ company.  Other persons belonging to this category have not seen the mark DUCO used on motor vehicle paint.  Five declarants who supply paint and/or are engaged in repairing vehicles also recognize it as paint and associate it with either “Dulux”, and two, Messrs Dabrowski and McMartin, are aware of the product having been re-launched under the mark but fail to specify any dates as to this event.  All the declarations are dated June, July or November 1996.  None of the persons aware of the mark DUCO in relation to paint for motor vehicles claims to have any recollection of the mark having been used later than ten years ago.  It would be reasonable to expect that, of the twenty-nine declarants who are members of the relevant trade - the automotive industry - with experience ranging from 12 months to 36 years, at least some would not only have used or at least had been aware of the mark DUCO in the past but that they would also have encountered it in the critical period, had the product bearing the mark been available at that time.

In light of the slight evidence that is required from the applicant before the onus in relation to use of the mark shifts onto the opponent, as per the directives in Estex v Ellis and Goldstein, supra, I find that the applicant’s survey declarations are sufficient to meet that requirement. 

Use of the marks by the opponent
To the declaration by Mr Kelson, who is the principal of the firm of patent and trade mark attorneys acting for the opponent, is attached copy of a declaration by Mr William Matthews made on 16 August 1996, which was lodged as part of the evidence in the opposition proceedings by the present opponent in respect of the trade mark application number 591509.  Mr Matthews mentions the two registrations the subject of the present removal action and states that the trade mark DUCO has been continuously used by the opponent or its predecessor in business in relation to surface coatings since 1920’s, including the three year period in terms of section 23 of the Act.  To support his claim as to the reputation of the mark DUCO for these products, including car polish and automotive paint, Mr Matthews refers to copy of a headnote of a published decision Avirone Pty Ltd v ICI Australia Operations Pty Ltd 17 IPR 262 which concerned opposition by the present opponent to registration of a mark comprising the word DUCO and a car device in respect of clothing. In that case, the hearing officer had found “wide and impressive” reputation of the opponent’s mark DUCO.

Mr Matthews’ declaration of 20 May 1997 is accompanied by documents containing information on sales of the opponent’s products ‘Quickstop’ putty, finishing glaze and ‘black black’ from July 1994 to July 1997, copies of labels or packaging, a data sheet on acrylic lacquer products and a number of brochures in support of the opponent’s alleged use of the mark on finishing glaze and acrylic lacquer products.  In addition, he has annexed copies of status reports for the opponent’s registered trade marks containing or comprising the word DUCO, which were associated with the subject marks, under the provisions of section 36 of the Act. 

In commenting on the Avirone v ICI, supra, Mr Fisher observed that in setting out the history of use of the mark DUCO it had been stated that the mark was principally used on five products, namely: a lacquer, a putty, a polisher and cleaner, a general purpose thinner and multi-purpose thinner.  As there was no indication what years the annual sales given for these products represented and assuming, on the balance of probability, the amounts to have referred to 1988, he said that more contemporary figures would reflect the true position.  He submitted that the specified figures of annual sales of lacquer in litres for a company which claimed 50% share of the Australian refinish market was trivial.  The dictionary definitions of the word “Duco”, which are quoted in that decision, he said, had two meanings: a kind of paint DUCO and the act of application of the paint - ‘duco’.  In the past ten years, however, the word had become generic.  The hearing officer had observed that the general dictionary references indicated that in respect of vehicle paint the trade mark DUCO had acquired national fame and she had acknowledged reputation in respect of vehicle paints, but the evidence supporting this position was absent from the present proceedings. 

In discussing in considerable detail the contents of Mr Matthew’s declaration and exhibits, Mr Fisher criticised this evidence essentially for the lack of corroborating evidence, i.e. copies of invoices or delivery dockets and, in the case of the brochures, the failure to provide proof that they had actually been circulated to attract sales.  In addition, Mr Fisher also pointed to the alleged inconsistencies in the evidence, suggesting that the dates of appearance of the products on the market were incorrect.  In his assessment, the opponent had not produced any evidence of sales even for the small range of products specified, particularly in respect of paints and lacquers during the relevant period.  In that regard, Mr Fisher said, although one act of sale of the goods could support a claim of genuine use of a trade mark, in Peters Foods Australia Pty Ltd v Tip Top Ice Cream Company Ltd 33 IPR 475, the hearing officer had been very critical of the opponent’s limited supporting evidence. If a single act was relied upon, then it should be overwhelming and convincing proof as had been observed in “Nodoz” Trade Mark (1962) RPC 1 which had been quoted in Estate Agents Co-operative Ltd v National Association of Realtors (1988) AIPC 90-470. In the present case, the hints or implications of use of the opponent’s mark had not gone far enough to satisfy that criterion. In relation to quality of the evidence, Mr Fisher referred to Nettlefold Signs Pty Ltd v Nettlefold Advertising Pty Ltd (1996) AIPC 91-232 where it was held that the Registrar functions as an administrative tribunal and the delegates are required to assess matters on the balance of probabilities “based on material which tends logically to show the existence or non-existence of facts relevant to the issue to be decided” as per Minister for Immigration v Pochi 31 ALR 666.

Mr Hess pointed out that, unless there is contrary evidence, pursuant to the Evidence Act 1995, the results derived from computer generated records are probative. The sales reports, therefore, did not need corroboration. These records showed substantial volumes of sales over the relevant three year period of ‘Quickstop’ putty and finishing glaze, the latter being covered by registered marks associated with the marks under consideration. Referring to what in the sales records is described as ‘black black’, Mr Hess said that, although this product had a patchy history, considerable sales of it had been shown in the state of Queensland. That product, according to Mr Hess, was the paint as depicted in copy of a label of one of Mr Matthews’ exhibits. For further evidence of use of the mark on paint, Mr Hess drew my attention to the data sheet describing acrylic lacquer products which had been on the market in January 1995. In this regard, he said, there was no need for corroboration, pursuant to the Evidence Act, section 164, supra, as in the absence of any contradictory reply material, Mr Matthews’ statements that the goods were on the market was sufficient. The brochures in the evidence supported the claim of continuous use of the mark on finishing glaze and the new line of DUCO acrylic lacquer which was consistent with the statements of two of the applicant’s declarants. Relying on sub-section 38(1), Mr Hess said that the opponent’s evidence had established use of the marks in respect of the goods currently included in the registrations in question.

The only details of trade of the opponent’s goods are exhibited in the computer sales record sheets to which Mr Hess referred.  These records are headed ‘Display total sales and forecast’ and set out the sales in quantities, i.e. grams for the ‘Quickstop’ putty and litres for the finishing glaze and ‘black black’.  Separate monthly and total figures are given in terms of the forecast and actual sales figures of the goods for the period from 1994 to 1997, in the states of New South Wales, Victoria, Queensland, South Australia and Western Australia.  The exhibits containing the sales figures are confidential.  According to my estimation, the amounts are more than reasonable for the finishing glaze and putty but only moderate in respect of ‘black black’.  The labels and packaging of these products, as indicated by Mr Matthews, show the mark DUCO on ‘Quickstop’ putty, supreme finishing glaze and black acrylic lacquer tinter, identified in the sales records as ‘black black’.  In addition, copies of the published material, which accompanied Mr Matthews’ declaration, illustrate products bearing the mark DUCO, including finishing glaze and tinter.  It has been argued by the opponent that these brochures support the contention of the mark’s use on other products, particularly acrylic lacquer during the critical three year period.  My attention has been directed to the copyright dates on some of the publications and to Mr Matthews’ statements that the products were available or released at a certain time.  While I do not question Mr Matthews’ veracity regarding his declaration, I do not think I can attach much weight to copies of a data sheet which lists DUCO products and the brochures as the opponent has failed to provide any evidence that such material was distributed for the purpose of actual trade or offer to trade in the goods bearing the mark, or to demonstrate an existing intention to offer or supply the goods under the mark, so as to establish the mark’s use in the course of trade, as per Deane J in Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) CLR 414, at 433-434. In that regard, I concur with Mr Fisher’s submission.

As the computer lists with the sales information of the goods constitute part of a statutory declaration executed by a responsible member of the opponent company and no evidence has been produced refuting Mr Matthews’ statements, I accept these records as showing sales under the marks DUCO of three products: putty, ‘black black’, being tinter, and finishing glaze which occurred during part of the section 23 period.  If a single sale of the goods under the mark may be relied upon to substantiate use of the mark - “Nodoz”, supra - then the presented evidence of sales of the opponent’s products throughout the five mainland states in Australia must demonstrate at least “overwhelmingly convincing proof” since, as observed by the hearing officer in Prosimmon Golf v Dunlop Australia 9 IPR 425, these words [in “Nodoz” case] “are used not to stipulate a level of documentation but as a liberalisation of ‘conclusive’ proof, which Wilberforce J would otherwise have required”.  I note that finishing glaze is not encompassed in the statements of goods of either of the present registrations but is registered in class 3 for the marks DUCO under numbers 46275 and 250625. 

Mr Matthews’ assertion as to long and continuous use of the mark DUCO on surface coatings has not been substantiated by appropriate evidence in these proceedings.  While the reputation in the mark DUCO in respect of such products and in particular as they relate to the automobile industry might have been impressive in light of the evidence in the proceedings concerning Avirone v ICI, the evidence before me falls well short of proving sustained reputation of the mark in the last nine years.  Use of the opponent’s marks DUCO, as far as it relates to the prescribed period under para 23(1)(b) of the Act, however, has been demonstrated in respect of putty, finishing glaze and tinter. 

Discretion 
In reiterating his earlier submissions in relation to the word DUCO having become generic, at least as it applied to paints and lacquers, Mr Fisher said that there was no indication of the public interest being served by allowing the proprietor of the trade mark, which had acquired generic characteristics, to reinforce its rights, thus preventing the public from continuing to use the word in its descriptive sense.  He then referred to New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd 18 IPR 385 where, he said, consideration had been given relating to use of a trade mark and whether or not a trade mark could change its status between registration and through various circumstances. The proposition put in that case appeared to have been that sections 22, 23, 28 and 56 of the Act are not inextricably entwined, but that the issues run parallel. Mr Fisher said that a very lengthy consideration had been given there to the conduct of the proprietor to establish whether the findings were consistent with those of Diplock J in “GE” Trade Mark [1973] RPC 297. It had been generally supported that the notion of section 28 continued to apply. There was an obligation on the part of the proprietor of a mark that these requirements were met, particularly as sections 28 and 33 entail consideration of the public interest and have a consideration of the exercise of the Registrar’s and Court’s discretion in determining whether a mark should or should not be removed. Concern should not therefore be given merely to use of the mark in good faith or intention to use it in good faith at the time of the application. The precedents supported the notion that the failure to use a mark will cause lack of its distinctiveness as stated by Mason J in New South Wales Dairy v Murray Goulburn, supra, at p 400:

There is force in the argument that no distinction should be drawn in the application of s 28(a) as between the time of entry of a mark in the register and its continuing registration since the need to protect the public from deceptive marks is the same at any stage.

In the present situation, he said, there was blameworthy conduct on the part of the opponent in that there was no evidence of any attempt to maintain reputation of the mark and to avoid its becoming generic in nature.  There was evidence from members of the trade that the word was used in a descriptive sense.  If the mark was to remain on the Register in respect of paints and lacquers, then there would be confusion in the minds of the general public.  Moreover, a requirement for the maintenance of validity of a trade mark was, Mr Fisher said, that the mark must indicate a connection in the course of trade, even though it was slight, otherwise uncontrolled use would lead to deception. 

With reference to the considerations outlined by Woodward J in Paragon Shoes Pty Ltd v Paragini Distributors (N.S.W.) Pty Ltd (1988) 13 IPR 323 in relation to the Court’s discretion, Mr Fisher submitted that the applicant had established that the opponent’s marks were not at all times used in good faith by the opponent in respect of all the goods of the registrations, that, by virtue of the generic significance acquired by the trade marks at least in respect of paints and lacquers during the last 10 years, to allow the marks to remain on the Register would be contrary to the public interest, and that the title to the marks had been impeached by the generic use and therefore no discretion should be exercised by the Registrar in favour of the opponent.

In reply, Mr Hess stressed that the marks were not abandoned, nor was there any evidence of any blameworthy conduct on the part of the registered proprietor.  The issues raised in relation to sections 22 and 28 as well as the generic nature of the mark DUCO stemmed from a fundamental misconception of the proceedings.  These proceedings, he said, must be considered in accordance with section 23.  The applicant’s declarants, in fact, had shown continuous and continuing use of the mark DUCO over many years and its association with the division of the opponent’s company.  Mr Hess denied the claim that the word ‘DUCO had become generic.  In any event, he said, that was not relevant to the present proceedings. 

Under sub-section 23(1), the Registrar has residual discretion to refuse removal of a mark from the Register even though the applicant for removal has established a case for removal - Carl Zeiss Pty Ltd’s Appn (1969) 122 CLR 1. In Australian Law of Trade Marks, supra, the author says, at 275-276:

In Ritz Hotel v. Charles of the Ritz Ltd [(1988 12 IPR 417, at p 481], McLelland J. observed that the existence of the discretion ‘promotes the underlying policy of the Act by giving the court a sufficient degree of flexibility to give effect to public interest considerations’.

In relation to the alleged genericism of the word DUCO, Mr Lindsay declares that during 1980 to date he has known the term used purely as describing the paint finish on cars and, to substantiate his claim of its common use in that sense, he annexes to his declaration copies of newspaper articles and advertisements from the years 1995 and 1996, where the finish of cars is described, inter alia, as, for example: ‘blue duco’, ‘red duco’ ‘metallic duco’ ‘Senator Quartz duco’, ‘silver duco’ or ‘white duco’.  Most of the declarants who represent independent persons of the trade, identify the expression DUCO as paint or automotive paint and/or paint finish on the exterior of a motor car.

The word DUCO, which is defined in The Macquarie Dictionary, third edition, published recently, as: “1. a type of paint, especially as applied to the body work of a motor vehicle. 2. to spray or otherwise coat (a vehicle) with duco. [Trademark]” has not changed from the one to which the hearing officer referred in weighing her conclusions as to reputation of the mark DUCO in Avirone v ICI, supra.   The word signifies a proprietary name and similar definitions also appear in The Australian Reference Dictionary, Oxford University Press Australia, 1991, as well as in The Australian National Dictionary, Oxford University Press, 1988.  As noted earlier, in the said decision, the hearing officer found impressive reputation in the mark in respect of five of the opponent’s products, in particular as those goods are used in the automobile industry.  On evaluation of the available evidence, I have concluded that the opponent has not established an ongoing reputation in respect of all of those products, but I do not believe the applicant has succeeded in proving that the trade mark DUCO has become generic, particularly in respect of paints and lacquers, as submitted by Mr Fisher.  The reference to the word DUCO as a trade mark in the recognized dictionaries, the fact that two of the applicant’s declarants, Messrs Dabrowski and McMartin, are aware of the product acrylic paint being released under the mark DUCO and the statements of Mr Matthews that the product was released in 1994, together with the accompanying brochure describing and illustrating the “New range from a famous name”, throw considerable doubt on that proposition.  In addition, I note that, of the twenty-nine independent members of the trade, only nine of the persons who did not associate the word DUCO with any particular manufacturer indicated that to them the word denoted paint.  It is also significant that one of them comments “and I might add, Duco has become a generic term for paint within this industry.  Most dealers advertise cars using this term, i.e. gleaming red duco”, which, as I understand it, suggests confusion between use of the mark in relation to the actual product and the description of the colour or appearance of the finished work on a motor vehicle.  The remaining applicant’s evidence, including the newspaper articles and advertisements, show the word utilized in the latter sense.  This evidence, in my view, is not sufficient to support the contention that the word DUCO has become generic in the trade in respect of the product paint.  And in regard to generic names, I am also reminded of Mr Shanahan’s observation in Australian Law of Trade Marks, supra, at 125:

That the public uses the mark in the substantive form does not necessarily conclude this question, for as former Principal Assistant Registrar Ashton observed in the “Levi’s” case [Levi Strauss & Co v Amco Clothing Co Pty Ltd (1968) 38 AOJP 1581], the careless or humorous use of a trade mark does not necessarily render it generic, for people “may jocularly refer to a man’s hat as his ‘Stetson’, appreciating at all times that ‘Stetson’ is a famous trade mark”.  

As mentioned previously, Mr Hess sought to rely on sub-section 38(1) which involves the Registrar’s discretion in accepting use of associated registered trade marks or of marks with additions or alterations not substantially affecting the identity of the marks, as an equivalent for the use required to be proved in proceedings such as the present one.  In this regard, I have been referred to the opponent’s use of the marks DUCO on finishing glaze which is included in the opponent’s registrations numbers 46275 and 250625, the statements of goods of both of these registrations reading “polishing and cleaning preparations and materials included in this class, paint removing preparations”.  The opponent is justified in seeking the benefit of these provisions as far as it relates to the associated registered marks.  

Under sub-section 23(2) of the Act, the Registrar may refuse an application made under sub-section 23(1) in relation to any goods or services if there has been use of the mark in good faith on other goods or services that are “of the same description” or “closely related”.  This provision is for the purpose of the registered proprietor retaining protection of a mark so as to prevent the use by other traders of a conflicting mark in relation to products which the purchasers are likely to believe to emanate from the same source.  It does not apply where the applicant for removal has been permitted to register a substantially identical or deceptively similar mark under honest concurrent user in terms of section 34, or where the Registrar is of the opinion that such a registration might properly be permitted. 

In determining whether the goods in respect of which use of the marks DUCO have been demonstrated are goods of the same description as any of the other goods covered by the two registrations under consideration, I turn to Jellinek’s Appn (1946) 63 RPC 59, where Romer J set down the well-known factors for consideration: the nature of the goods, their uses and the trade outlets through which they are bought and sold. However, to a finding that the goods are of the same description it is not necessary for all these three factors to be present. Although I agree with Mr Fisher’s submission that even in closely related areas there may be doubt as to whether the goods are of the same description, given that a tinter is a coloured pigment which can be added to paint or lacquer in order to change or modify its colour, it seems to me that, in view of the similar nature of these products, their close relationship, their common use and trade channels, tinters are goods of the same description as lacquers and paints, including enamels and enamel paints, as well as metals in powder form, being an ingredient for paints. As use of the mark has been shown on putty, there does not seem to be any doubt that this item and wood filler are also goods of the same description. Hence, members of the purchasing public would expect the goods to originate from the same manufacturer. In these circumstances, the provisions of sub-section 23(2) should apply to those goods.

In the exhibited data sheet to Mr Matthews’ declaration, the products for general purpose “acrylic lacquer system” are listed: ‘DUCO primer filler’, ‘DUCO flat black’, ‘DUCO tinter’, ‘DUCO solid colour’, ‘DUCO metallic colour’, ‘DUCO clearcoat’, ‘DUCO thinner”.  The copy of a brochure ‘Guide to Automotive Paint Refinishing’, which explains the various steps in the refinishing process, indicates use of these products.  Given that these goods serve as a link in a progressive process which is aimed at achieving the same end result, I consider these goods to be closely related and in support I refer to Zenith Radio Corp’s Appn (1951) 68 RPC 160. While I have not been able to find any references in the opponent’s evidence in relation to the items varnishes, pyroxylin finishes, preservatives against rust and deterioration of wood and metals in foil for painters and decorators, which are embraced in the present registrations, I believe that, in general terms, the nature and purpose of these goods are sufficiently similar to those appearing in the said data sheet.

Having regard to the above comments and conclusions, it follows that, should the DUCO marks be adopted by any other trader for use in relation to the goods now specified in the opponent’s registrations, such an act would likely result in considerable deception or confusion on the part of the prospective buyers of such goods.  For the sake of public interest, therefore, and taking into account the past reputation of the opponent’s marks in respect of surface coatings, I have decided to exercise residual discretion in the matter by allowing the opponent’s marks to remain registered in respect of all the goods as they are registered. 

Conclusion
In summary, I have found that the applicant for removal has the necessary standing as a person aggrieved and that it has established a prima facie case for removal of the registered marks.  Use of the marks in terms of para 23(1)(b) of the Act has been shown by the opponent in respect of putty, finishing glaze and tinter.  In the exercise of the discretion provided by sub-section 23(1) of the Act, however, I refuse removal of the marks of registrations numbers 44667 and 250626 from the Register.  

The opponent having succeeded in these proceedings is entitled to costs and I so award them.

Vija Zars
Hearing Officer
30 January 1998