Effem Foods Pty Ltd v Marks and Spencer Plc

[1999] ATMO 88

TRADE MARKS ACT 1995

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

Re:      Opposition by EFFEM FOODS PTY LTD to registration of trade mark     application number 568804 in the name of MARKS AND SPENCER
           P.L.C. for the trade mark M&S

Background
Application number 568804 was filed by Marks and Spencer p.l.c. (the applicant), on 4 December 1991, to register the mark M&S, in class 2, in respect of:

"paints, varnishes, (other than insulating varnish); emulsions in the nature of paints".

Acceptance of the mark was advertised in the Australian Official Journal of Trade Marks of 30 May 1996, bearing the following endorsements:

It is a condition of registration that the trade mark will be used in close proximity to the applicant's registered trade marks MARKS & SPENCER, or ST MICHAEL;
and
Accepted under the provisions of section 41(5).

Pursuant to the provisions of s.243 of the Act, the applicant requested that twenty-three other applications, filed on the same day for an identical trade mark M&S, but in respect of goods or services in different classes, be linked to the present application.  The acceptance of all these applications had been advertised in the same Official Journal, supra, as this application.  The amalgamation of these applications, in classes 3, 4, 5, 8, 9, 11, 14, 16, 17, 18, 20, 21, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 and 33, into the application number 568804, was advertised in the Official Journal of 16 June 1996.  I will not set out the goods in each of the classes for reasons which will become apparent in my decision. 

Opposition to registration of the mark M&S for the goods specified in the amalgamated application was filed on 30 August 1996, by Effem Foods Pty Ltd (the opponent).  Of the ten grounds of opposition, at the hearing, the opponent chose to concentrate on the evidence and submissions in relation to the following:

• that the opposed mark is not capable of distinguishing the applicant's goods - s.41;

• that the opposed mark is substantially identical with or deceptively similar to the opponent's marks which have an earlier priority date - s.44;

• that the opposed mark is substantially identical with or deceptively similar to a mark which has acquired a reputation in Australia such that use of the opposed mark would be likely to deceive or cause confusion - s.60.

The opposition was heard by me in Sydney, as the delegate of the Registrar.  The opponent was represented by Mr Brett Doyle, a solicitor, of Baker & McKenzie, Sydney.  Mr Ben Fitzpatrick, also a solicitor, of Davies Collison Cave, Melbourne, appeared for the applicant. 

Evidence
A statutory declaration, with exhibits, by Ms Rhonda Anne Steele, the opponent's marketing property manager - Asia Pacific - forms the evidence in support.  Ms Steele states that the opponent is the owner of the mark M&M's, as well as various other marks incorporating M&M's in a stylized, label or character format, which feature the letter "M".  An exhibited status report shows the details of registration of these marks in Australia.  She says that the opponent is a member of the Mars, Incorporated group of companies holding numerous registrations or applications for the M&M's trade marks throughout the world.  Annexed to her declaration are exhibited brief details of those marks in the various countries, as well as a great number of samples of packaging of confectionery and the promotional material.  In relation to use of the opponent's marks in Australia, Ms Steele provides exhibits of the marks in use on confectionery, also examples of promotional and advertising material, including articles from newspapers and magazines, which refer to the opponent's marks.  In a further exhibit is given confidential information on the annual gross sales and advertising figures in relation to confectionery sold under the M&M's marks in Australia.  As far as she is aware, Ms Steele says, the opponent is the only manufacturer and seller of confectionery in Australia using a trade mark, which contains letters separated by an ampersand, and, certainly, is the only user of a mark comprising two letters, one of which is the letter "M". 

Derek Keith Hayes, director of the applicant company, has provided the evidence in answer in a statutory declaration and exhibits.  On briefly setting out the background of the company's business activities since its foundation, Mr Hayes gives estimated confidential sales value achieved by the opponent since 1990.  Turning to the subject mark, he says it has been used in all areas in the United Kingdom, including those he has listed in his declaration.  He states confidential turnover and advertising expenditure figures for all the goods sold in the United Kingdom for the years 1987 to 1997 and 1989 to 1992, respectively.  One of Mr Hayes' exhibits is copy of a statutory declaration and exhibits by Nigel Colne, an executive director of the applicant, to which Mr Hayes makes further references in relation to use of the opposed mark in the United Kingdom and Australia.  Mr Colne has exhibited lists of numbers of the principal marks registered by the applicant in the United Kingdom and of registrations and applications in Australia.  Mr Hayes notes the manner of use of the M&S mark, in particular in relation to foods, including confectionery, as well as sales and advertising figures, as evidenced by Mr Colne.  He refers to exhibits to his declaration containing copies of certificates of registration of the marks in the United Kingdom and a list of international trade mark registrations for the mark M&S.  He states that the applicant opened its first store in continental Europe in 1975.  By 1995, 29 stores were operating throughout Europe.  The applicant had also extended its activities into the Asia region, opening a store in Hong Kong in 1988, and further stores by 1994.  It has operated its stores through franchisees in other parts of Asia, 23 stores selling a comprehensive range of goods under the applicant's trade marks. 

Mr Hayes exhibits copies of press coverage of the applicant's announcement to commence its operations in Australia.  Another copy of an article from a Scottish paper in relation to the mark is attached to his declaration.  He says that the opponent had imported its products into Australia from 1974 to 1980, but trading had ceased due to the introduction of quotas.  However, some goods bearing the mark were imported subsequently.  He has estimated the value of these goods at their peak shipment periods.  According to Mr Hayes, in the near future the applicant plans to invest huge amounts into developing new stores and re-developing the existing ones. 

As the evidence in reply, the opponent has filed a statutory declaration by the same Ms Steele whose declaration comprises the evidence in support.  Commenting on Mr Hayes' declaration, Ms Steele says she can see no use demonstrated there of the applicant's mark, in connection with confectionery.  She had also noted that, on considering the evidence in support of acceptance of the mark, the examiner had observed that the mark did not appear to be used on any particular goods, but was displayed prominently on shop facades and plastic carry bags.  

Submissions and analysis
The opposed mark not capable of distinguishing the applicant's goods - s.41
Before commencing his submissions, Mr Doyle tendered a copy of a decision handed down in the United Kingdom Registry of Trade Marks concerning issues which, he said, were similar to those to be considered in relation to the matter in suit.  That decision concerns opposition, under the Trade Marks Act 1938 (as amended) and the Trade Marks Act 1994 of the United Kingdom, by the current opponent, to registration of the applicant's mark in respect of all the goods in classes 29 and 30.  

Directing his submissions to s.41 of the Act, Mr Doyle said that it appeared the applicant was attempting to lock up a two-letter combination mark for a broad range of goods.  It should be borne in mind that, even with a minimum amount of use, the mark could stay on the Register for different kinds of goods.  Such a broad registration would make it very difficult for other traders who may wish to adopt and use the letters MS on a very wide variety of goods.  Once a mark was registered, even minimal amount of its use would be sufficient to prevent a mark from being removed for non-use, whereas that same level of use may fall far short of maintaining its factual distinctiveness in the market place, he submitted.  In his opinion, it was important to note that the applicant's mark was accepted prior to Blount Inc v The Registrar of Trade Marks decision (1998) AIPC 91-408, when there was a general misconception of a presumption of registrability insofar as s.41 of the Act was concerned. Mr Doyle conceded, however, that the applicant's mark had a low level of adaptability to distinguish. Referring to the decision in the United Kingdom, he said that, even though the issues there had been decided under the Trade Marks Act 1938, the position regarding the concept of inherent adaptability had not changed between that Act and the Trade Marks Act 1995 in Australia.  The mark there had been found not to be adapted to distinguish and not suitable for registration in Part A of the Register.  Thus, he submitted, under s.41 of the 1995 Act, the applicant's mark would need a significant amount of use to reach the registrability barrier of being capable of distinguishing.  The evidence filed in the United Kingdom had not been sufficient to generate significant reputation of the mark.  In the present proceedings, it was obvious from Mr Hayes' declaration that most of the sales had occurred in the United Kingdom stores.  The sales figures should have been broken down in at least broad categories, because it was impossible to ascertain, for example, what percentage of the goods represented clothing, in respect of which most of the mark's use had occurred.  Moreover, the applicant's planned opening of a store in Australia had not yet been realized.  On perusing the applicant's evidence, one was left with an impression of global use of the mark and overwhelming sales in England, which suggested that any awareness of the mark in Australia must be almost non-existent, Mr Doyle said.  Whatever reputation the applicant was enjoying here, it would be in respect of the words MARKS & SPENCER, but the mark M&S would not be associated with it.  As to the limited sales of the goods in Australia, Mr Doyle submitted that the applicant had not shown how the goods were sold or, indeed, whether the goods bore the mark M&S.  In any event, any impact of such sales would have decayed by now.  Briefly commenting on Mr Colne's declaration, he considered the material there to be vague, indicating use of the mark on fascia boards, rather than on the particular goods covered by this application.  What was important here, Mr Doyle said, was not so much use of the mark, but its reputation and, although he had some misgivings about the comments of Jacobs J on use of a mark in British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281, his Honour had said that there seemed to exist the illogical assumption that use equalled reputation. That, Mr Doyle, said, was exactly the case here, and what the hearing officer had found in the United Kingdom decision. In the present case especially, it was essential to safeguard the public interest in relation to the broad statements of goods claimed by the applicant.

Mr Doyle questioned the meaning of the first endorsement entered on the application, describing it as imprecise and likely to present problems.  If the words "close proximity" meant visible proximity, then what were the relative sizes of the respective components M&S, ST MICHAEL and MARKS & SPENCER?  He said that Ms Steele had given some instances of use of the applicant's mark where, while complying with the terms of the endorsement, it could be confused with the opponent's marks.  However, a much more serious difficulty was caused by its vagueness, because, when read in conjunction with the s.41(5) endorsement, it meant that the mark was neither distinctive, nor capable of distinguishing apart from the other two marks.  In his opinion, the applicant might be entitled to registration of the marks ST MICHAEL in combination with the letters M&S, or MARKS & SPENCER with the letters M&S, but not simply the letters M&S themselves.  In that regard, he said, the opposed mark was the type of "limping trade mark" referred to by Jacob J in British Sugar v James Robertson, supra, i.e. it required another trade mark to make it function as an effective badge of origin.  What was distinctive, or capable of becoming distinctive, should be the trade mark applied for, not the mark used in a particular way with other distinctive marks.  

Responding to Mr Doyle's submissions, Mr Fitzpatrick first commented on the decision in the United Kingdom.  He pointed out that the hearing officer in the United Kingdom Registry was in a position to consider the mark's registrability only in Part A of the Register, and that the endorsement on the present application was critical to the assessment of the mark's capacity to distinguish under s.41, as well as dealing with the s.44 issue.  Moreover, in the current proceedings, the matters needed to be decided in terms of the Australian Act. 

In relation to s.41, Mr Fitzpatrick submitted that the applicant had satisfied its onus under the provisions of s.41(5) by principally relying on the mark's reputation overseas, including the reputation in those countries which had a common law heritage and equivalent market conditions to those of Australia.   In support, he cited  Burger King Corp v Registrar of Trade Marks (1973) 128 CLR 417 and Application by Allergan (1996-1997) 37 IPR 638. He noted that s.41 did not refer to use of a mark in Australia. Whilst conceding that the declaratory evidence indicated the majority of the mark's use outside Australia, he referred to the newspaper articles featuring the mark and the fact that the goods had been previously sold in Australia under the mark, submitting that, in light of the world-wide notoriety of the applicant's marks, any reputation of the mark could not have been extinguished at the time of filing this application. He directed my attention to the applicant's expansion plans in Asia and Australia which, he said, were relevant factors for consideration of the mark in terms of s.41(5). In relation to the applicant's use of the mark on shop fascias, signboards or newspapers, Mr Fitzpatrick referred to s.7 for a definition of use of a mark and to s.9 for the statutory explanation of the term "applied in relation to". In this regard, Mr Doyle conceded use of the applicant's mark, but he did not think it extended to generating reputation for the broad range of goods nominated by the applicant.

Continuing his submissions on the applicant's evidence, Mr Fitzpatrick emphasized the extremely high turnover figures, the large amounts of money expended in promoting the mark and the exhibits, which, he said, indicated consistent use of the mark in relation to many diverse goods.  These goods also covered food, including chocolates.  In his view, it would be an onerous task to require evidence of use on each particular item.  It was also important to remember that the mark's registrability needed to be considered with reference to the condition expressed in the endorsement on the application.  Commenting on the opponent's criticism of the endorsement, Mr Fitzpatrick said that the interpretation of the present endorsement would not be an impossible task for the courts to construe.  The case law clearly indicated that the Registrar had the power to accept endorsements, as per Azochloramid Trade Mark [1974] RPC 655. In accordance with the statutory definition in s.7(2), that aural representation for the purposes of the Act was use of the mark, Mr Fitzpatrick put the proposition that the applicant's mark was phonetically equivalent to a three-letter mark 'M-N-S', which was to be considered when assessing the mark's capacity to distinguish, in conjunction with the evidence of use and the endorsement.

On considering the submissions presented by the parties, it appears to be common ground that the applicant's mark M&S does possess some degree, albeit small, of inherent adaptation to distinguish, thus it is for me to determine whether the applicant has satisfied the provisions of s.41(5) of the Act, which read as follows:

41.(5)  If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:
(a)      the Registrar is to consider whether, because of the combined effect of the following:

(i)          the extent to which the trade mark is inherently adapted to distinguish the

designated goods or services;

(ii)  the use, or intended use, of the trade mark by the applicant;

(iii) any other circumstances;

the trade mark does or will distinguish the designated goods or services as

being those of the applicant; and

(b)if the Registrar is then satisfied that the trade mark does or will so

distinguish the designated goods or services - the trade mark is taken to be

capable of distinguishing the applicant's goods or services from the goods

or services of other persons; and

(c)if the Registrar is not satisfied that the trade mark does or will so

distinguish the designated goods or services - the trade mark is taken not

to be capable of distinguishing the applicant's goods or services from the

goods or services of other persons.

Pursuant to paragraph (a) of the section, I must assess whether, given the combined effect of (i), (ii) and (iii) above, the applicant's mark is entitled to registration for the goods specified in the application.  In evaluating the evidence of use of the mark under s.41(5), consideration may be given to use before or after the filing of an application for its registration.  

Since there is a general tendency by persons to use letters, or initials in the course of their trading activities, including use in relation to goods or services, an applicant, who seeks registration of a trade mark consisting of letters, bears a heavy onus in proving that such a mark distinguishes its goods from those of other traders - Registrar of Trade Marks v W. and G. du Cros Ltd  (1913) 30 RPC 660 and Ford-Werke A.G's Appn (1955) 72 RPC 191. This is particularly so where the letters are represented in a plain type, without any embellishment, as in the present case, where the mark consists of two upper case letters joined by a common place ampersand. According to the applicant's evidence, apart from importing and selling its goods in Australia between 1974 and 1980 and between 1984 and 1988, no other sales have occurred here. Mr Hayes has stated that, during the latter period, the applicant imported toiletries and cosmetics for the Target store of the Coles Myer Group, but does not say what the other products were. The total sales value of the applicant's goods is expressed in terms of the 1996 prices and could be described as reasonable. In the absence of further sales in Australia, the applicant has relied on use of the mark in the United Kingdom, as well as in other countries, and the intended use of the mark in Australia on opening of the applicant's stores. In particular, relying on the Burger King v Registrar, supra, it has sought assistance to establish the mark's registrability from use of the mark in the countries with market conditions similar to those existing in Australia. 

From the evidence contained in the declarations by Messrs Hayes and Colne, one gains sufficient information regarding the applicant's trading activities in the United Kingdom so as to form an impression of a well established business with its stores operating throughout the United Kingdom.  The annual turnover of sales between 1987 and 1997 is staggering, calculated to run into many millions of dollars.  According to Mr Hayes, the applicant sells almost every type of consumer product, including clothing and textiles, footwear, food, beverages, stationery, books, toiletries, cosmetics, furniture and home furnishings, ceramics and glassware, kitchen ware, bedding and decorating materials.  The applicant has secured registration in Australia of its marks ST MICHAEL and MARKS & SPENCER.  Use of the mark M&S had commenced in at least 1970, initially being displayed on the shop fronts and fascias.  There is no indication as to what extent, and how long, the mark was used in relation to the different categories of goods.  This deficiency was subjected to severe criticism by the opponent.  However, Mr Colne's exhibits show the mark prominently displayed on the fascias along with the mark MARKS & SPENCER, on copies of customer magazines, in-store publicity leaflets, promotional literature, all these featuring a variety of products, as well as on a photocopied carrier bag.   

A copy of the annual report and financial statements for 1995, which bears a reference to the mark M&S, attests to the applicant's extensive business operations and high operating profits in the United Kingdom, Europe, North America and Asia.  Besides registrations of the mark in its home country, a long list shows registrations in different classes in many other countries throughout the world.  To illustrate use of the mark in Asia, Mr Hayes has annexed to his declaration copy of a declaration by Colin L Buchanan.  This declaration details use of the mark in the applicant's stores in Hong Kong and provides relevant information as to the mode of use of the mark and the actual goods sold under the mark.  The applicant retails its goods under the marks MARKS & SPENCER, M&S and ST MICHAEL, which

"are used contiguously with each other as the various brand names under which the goods recited herein are advertised and sold to the public.  The trade marks are used at shop fronts, on containers of goods, on labels and tags attached to goods, for packaging materials in the form of wrapping paper and carrying bags, and in promotional materials and business literature."

The list of goods sold in the applicant's seven stores in Hong Kong, which is included in the declaration, covers a diverse range of goods falling in most of the classes of the present application and is not exhaustive.  The listed goods are of the type that would generally be available in a typical department store and would support the applicant's claim of selling a vast range of products.  The sales figures of the goods from 1989 to 1992, which have been categorized on a departmental basis, i.e. ladies' wear, lingerie, men's wear, children's wear, footwear, home furnishings, gifts and foods, show a sound turnover.    

I doubt that the article from the little known publication in Australia, Scottish Daily Record and Sunday Mail International, which mentions the M&S mark, would have had a reasonable exposure, even among the emigrants from the United Kingdom, as suggested by Mr Hayes.  However, some recognition of the applicant's mark would have been generated by the articles in the Australian press, evidenced by Mr Hayes: the article in The Australian Financial Review of October 1996, and two other unidentified articles, which serve to illustrate the applicant's intention to resume use of the mark in Australia, with specific reference to the mark M&S.   

Notwithstanding this, it is clear that, for a mark possessing a spark of inherent adaptability to distinguish, the demonstrated limited past use in Australia, which occurred some time ago, and only some indication of a proposal to open the applicant's locations here, are far from sufficient in satisfying the provisions of s.41(5) of the Act.  Even if this factor was considered together with the undisputable reputation of the mark in the comparable jurisdictions to Australia's, and its use in other countries, the applicant would have fallen short of establishing that the mark does, in fact, distinguish the goods of this application, had the applicant not undertaken the existing condition of registration of the subject mark to the effect that it is to be used in conjunction with one of the marks registered for the respective goods, or services, and known in Australia.  Pursuant to s.33(2) of the Act, the Registrar may accept an application subject to conditions or limitations.  The imposed condition in relation to the present application restricts the mode of use of the applicant's mark so that the mark will appear on the goods near a mark which has been found to be capable of distinguishing and has become familiar to the Australian consumers.  This significant factor, together with use of the mark in the relevant jurisdictions, the numerous international and United Kingdom registrations of the mark, as well as some exposure of it in this country, has led me to conclude that the applicant has fulfilled the requirement of "the combined effect" of the three criteria stipulated under s 41(5).  I agree with Mr Fitzpatrick that the acceptance of the applicant's mark can be distinguished from the circumstances which applied to the case in the United Kingdom, where registrability of the mark was considered under the more stringent provisions for a Part A registration and, apparently, no equivalent conditions of registration were contemplated.  

It follows therefore that the opponent must fail on this ground of its opposition.

It is proposed to combine the submissions the parties made in relation to the ss 44 and 60 grounds under one heading.  These will also include written submissions, made upon my request after the hearing, on the question of "similar goods" under the marks, in terms of s.44, which had not been addressed at the hearing.  My analysis of the relevant issues will follow. 

Whether the mark is similar to a mark which has acquired a reputation - s.60
In relation to this ground of opposition, Mr Doyle first compared the opponent's marks, M&M's, and the applicant's mark, with reference to the tests in Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641 and Pianotist Co's Appn (1906) 23 RPC 774. Although Mr Doyle did not mention numbers of the marks he had in mind, I understand the marks to be at least of registrations 389692 and 551254, given those marks comprise or contain the elements M&M's and carry priority dates. He noted that, on the verbal, as well as visual comparisons, the opposed mark consisted of the exact combination of letters of the applicant's mark, but with an additional letter "M", so that, although slightly differently configured, the opposed mark was contained within the mark used by the opponent and covered by the opponent's registrations. It was not possible to ignore the terminating letter "s" in the opponent's registered marks, therefore the only difference between the marks was the additional letter "M" in the opponent's mark. He considered circumstances such as a poorly lit store, orders taken by telephone, poor telephone connections, or English spoken with a heavy accent, as possible causes of confusion between the marks. He noted that the marks lacked an idea which could be used to differentiate them, i.e. in the sense that the words "camel" and "caramel" each expressed a definite idea. Furthermore, the opponent's products appealed to children and, while children were usually adapt in distinguishing all sorts of things with which they were familiar, they did not have the perceptive abilities of adults. Mr Doyle said that, even if people recognized a product under an M&S mark as being different from that bearing an M&M's mark, they might think that it was a supermarket chain that was trying to produce a look-alike, or a generic product. Moreover, often the goods were located at check-out sales points, which attracted the impulse buyer, he said.

Mr Fitzpatrick considered the marks in question to possess sufficient differences for them to be either substantially identical or deceptively similar.  In his opinion, the apostrophe and the letter "s" in the opponent's marks M&M's indicated a possessive or, more likely, a plural form.  There were also noticeable changes in pronouncing the "S" in the marks in that it became a much harder sound in the M&S mark than in the M&M's mark, where it was pronounced more as a "z" than "s".  Had the applicant's mark consisted of a very similar combination to the opponent's mark, for example, the letters "M" and "N", in his opinion, there could be a claim based on confusion.

To the extent that the opponent relied on its other registered marks, Mr Fitzpatrick continued, those marks were even further distinguished because of the highly stylized letter form, or the devices in the marks.  Considering the opponent's argument in relation to section 44, Mr Fitzpatrick said it appeared that the opponent was seeking a monopoly of the letter "M" with an ampersand, and that this combination with another letter would infringe registration of the opponent's marks.  With reference to Jafferjee v Scarlett (1937) 57 CLR 115, where it was indicated that one must look at the idea of the mark, Mr Fitzpatrick reiterated his earlier submission on the opponent's mark being a possessive or pluralisation. Concerning the circumstances under which confusion of the marks could arise, as asserted by the opponent, he said that it was not realistic for the Registrar to assess the likelihood of confusion in such scenarios. An assessment as to deceptive similarity should be made by reference to the fact that, in the present case, the applicant's mark was to be used in a particular manner.

Section 60 reads as follows:

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

(a)it is substantially identical with, or deceptively similar to, a trade mark that,

before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had 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.

Concerning this issue, if, in terms of the principles applicable to s.44, I determine the applicant's mark to be substantially identical or deceptively similar to the opponent's marks bearing a priority date, I will then turn to the matter of deciding whether use of the applicant's mark, in a fair and reasonable manner, would be likely to deceive or confuse a substantial number of purchasers, given the reputation of the opponent's marks.  In this regard, I refer to Smith Hayden's Application (1946) 63 RPC 97 and Southern Cross Refrigerating Co v Toowoomba Foundry Pty Limited (1954) 91 CLR 592. However, the provisions of s.44 would only operate in instances where any applications or registrations of the marks, found to be substantially identical or deceptively similar, also claimed similar goods or closely related services.

Considering first the issue of section 44, on the side by side comparison of the opponent's marks, particularly those consisting of the plain letters and an ampersand - M&M's - which are the closest in character to the applicant's mark, the obvious additional letter "M", the apostrophe and the lower case letter "s" are sufficiently different particulars to conclude the marks not to be substantially identical.  In light of the well-known tests in relation to the rules of comparison, however, I find the applicant's mark to be deceptively similar to the opponent's marks of registrations 389692 and 551254.  The first of these marks consists of the letters M&M's.  The other is a composite mark shown here:  

Both marks were registered before the filing of the present application.

Given the impression that potential purchasers are likely to gain from the marks, when the marks are not displayed together for close inspection, pursuant to the criteria enunciated in Australian Woollen Mills v Walton, supra, I believe their structure, as well as the sound of the marks, to be too similar to avoid any possibility of confusion.  The applicant's mark and the mark of registration 389692 are essentially composed of a combination of the same letters and an ampersand.  Their resemblance is enhanced by sharing exactly the same first letter and the ampersand.  If there are some visual discernible differences in the grammatical construction of the marks, such as the possessive or pluralisation in the opponent's marks, these, in my view, are too insignificant to convey two distinct ideas to be captured in the persons' memory so as to eliminate the likely instances of confusion.  The mark of registration 551254 may express some vague idea, but the letters M&M's are so strikingly rendered that the word LAND in the mark could be overlooked.  For these reasons, regard must be had to those customers who may not have the ability to remember the exact number of letters in the marks or their sequence, or that one of the marks also includes a word, but may have a recollection that the marks contained the letters "M" and "S" and the ampersand symbol - Rysta Ltd's Appn (1943) 60 RPC 87. I have not discounted the fact that the applicant's mark will appear in the vicinity of the marks MARKS & SPENCER or ST MICHAEL, but I envisage the circumstances where the subject mark is prominently displayed on the goods with the applicant's word marks appearing in small letters, thus diminishing the impact of the trade mark significance, or a connection with the applicant. Such a situation was mentioned by Ms Steele in her second declaration.

While I concede the difference in pronunciation between the letter "S" in the marks, advanced by Mr Fitzpatrick, I think these nuances would be obvious only if the marks were uttered in a normal and clear manner.  However, as alluded to by Mr Doyle, I must also take into account the possibility of indistinct, or distorted sounds in telephone communications, as considered in Taylors Elliots and Australian Drug Pty Ltd's Appn (1938) 8 AOJP 2211, and the fact that it is usual for English speakers to accentuate the beginning of words [or combination of letters] with the result that their termination is slurred - London Lubricants (1920) Ltd's Appn (1925) 42 RPC 264. These factors are particularly important in the present case, where the initial sounds of the marks are identical.

While being aware of the usual manner in which ordinary persons purchase their goods, I must be mindful of the fact that confectionery, the goods of particular concern to the opponent in the present proceedings, are not the expensive items selected with great care or discernment, but often attract children or distracted purchasers, as was submitted by Mr Doyle.

The opponent's marks referred to above are registered in class 30, in respect of "confectionery".  The applicant seeks registration of the subject mark also in class 30, for the following goods:

"Coffee, coffee substitutes, coffee essences and coffee extracts, tea, cocoa, rice, tapioca, sago, flour and preparations made from cereals or from flour; bread, biscuits (other than biscuits for animals), cakes, pastry, pasta, pasta products and pastry products, chocolate, chocolates, non-medicated confectionery, ice-cream, water ices and frozen confections, honey, treacle, yeast, baking powder, salt, mustard, pepper, vinegar, sauces (other than salad dressing), spices, beverages included in class 30 and preparations therefor, puddings, desserts, prepared meals and prepared snacks and fillings all included in class 30". 

For the present mark to offend against the provisions of s.44, the marks concerned need to be not only substantially identical or deceptively similar, but the goods must also be similar, i.e., pursuant to s.14, the same or of the same description.  The tests on this matter, adopted in Southern Cross v Toowoomba Foundry, supra, have been set down in John Crowther & Sons (Milnsbridge) Ltd's Appn (1948) 65 RPC 369 at 372 and are well known. Having regard to the nature and characteristics of the goods, their purpose, origins, sources of manufacture, trade channels and persons likely to specialise in their manufacture, and given that no single consideration is conclusive in itself, it seems to me that the majority of the goods in question are not similar.

What is inferred from the term "confectionery" by the broader community is not clear.  In The Macquarie Dictionary, third edition, the word is defined as "1. confections or sweets collectively.  2. the work or business of a confectioner.  3. A confectioner's shop."  While not directly deciding the question, Needham J in Rowntree plc v Rollbits Pty Ltd and Another (1988) 10 IPR 539, which was under appeal against the Registrar's decision, appears to have accepted an expert's view that there are four broad categories of confectionery. Essentially it is "a manufactured food product comprising various different ingredients. It is characterised by its high sugar content and low water activity." From further elucidation of these categories, it appears that the term "confectionery" would also embrace chocolate confectionery, products such as cakes, biscuits and pastries if these products contain a significant portion of either sugar or chocolate confectionery and "health food" bars with chocolate and high sugar content. Having referred to the various authorities in relation to the question of goods of the same description, at 545-546 his Honour said:

"In the present case, there is one factor which might not commonly exist; the plaintiff's goods are "confectionery"; the defendant's goods, to which the trade mark might be fairly and honestly applied, are not confectionery.  Nevertheless, the articles are each food, and food of a casual type; they will be sold in similar outlets to similar kinds of purchasers.  As the defendant proposes to use chocolate fillings and coatings, some of the goods will incorporate similar characteristics." 

His Honour appears to have drawn this conclusion having the benefit of inspecting the evidence as to the nature of both parties' goods.  Evidence had also been presented  to the effect that the goods would be sold in the same trade outlets.  Moreover, it was found that the defendant proposed to use toppings, coatings, fillings and stuffings made of toffee, chocolate or other sweet flavourings in manufacturing its products.  As I read it, Needham J was mainly concerned with those defendant's food products which were in the nature of savoury snack food, containing various ingredients that would conflict with the broad description of "confectionery".  In my opinion, he did not consider the question of whether other goods belonging in class 30 were of the same description.  Adopting this view, in order to complete my consideration under s.44, I find that only the goods which are confectionery and chocolate, or those containing chocolate and/or confectionery, are the same goods or goods of the same description as the goods encompassed in the opponent's registrations 389692 and 551254..

Ms Steele's declaration and exhibits demonstrate very substantial sales in Australia of confectionery under the marks M&M's before the filing day of the present application, which is the relevant date for assessing the reputation - Southern Cross v Toowoomba Foundry, supra.  Similarly, the opponent has spent considerable sums on advertising the products in the corresponding period.  Its claim of extensive advertising and promotion of the goods by various means, including electronic and print media, are adequately supported by a large number of relevant exhibits.  In addition, Ms Steele states, the opponent had been a sponsor of the Olympic games and sports games, for example, in Barcelona in 1992, in Sarajevo in 1984 and at the South East Asia games in 1983.   During the television and media coverage of these sports events, the opponent had been able to promote its M&M's marks.    

The only goods in respect of which the applicant's mark had been used in Australia in the 1970's and 1980's are specified as toiletries and cosmetics.  If chocolates or confectionery were imported and sold under the subject mark during the only period of the applicant's trading activities here, then the applicant has failed to show such use of its mark.  The reliance on the mark's reputation in the United Kingdom and other countries cannot assist the applicant's case in this regard, as the applicant's evidence provides no separate sales value for these goods, despite chocolate products appearing in the exhibits as being sold in the applicant's stores, nor is there any indication of a spill-over into Australia of any alleged reputation.  However, the disclosure of such figures would only have been the first step in the applicant's onus towards satisfying the Registrar of no reasonable probability of confusion of the marks - Southern Cross, supra. 

Given the sixteen years of use of the opponent's M&M's marks in Australia in respect of confectionery, the impressive turnover of these goods and the exposure of the marks by advertising and promotion through the popular media and sponsorship, I believe the reputation attaching to the opponent's marks, in relation to confectionery, to be considerable.  On the other hand, no use of its mark on confectionery, not to mention any reputation, can be adduced from the applicant's evidence.  Given the close resemblance of the applicant's and the opponent's marks, there is a strong likelihood that, if the potential purchasers were to encounter the mark M&S applied to confectionery, or similar goods identified earlier, at least a sizeable number of them would be caused to wonder whether those products shared a common origin, or whether there was a trade link between the opponent and the applicant, as per Southern Cross v Toowoomba Foundry, supra.

It has been submitted by the opponent that the opponent has used its marks in relation to other goods than confectionery, that it has extended the range of goods to include games, toys, badges, clothes, watches and bags.  From the exhibits of Ms Steele's declaration as to use of the opponent's marks in Australia, it appears that the marks were used for the purposes of publicising the opponent's sponsorship of the Olympic Games and promoting the opponent's brand chocolates.  This is exemplified in the catalogue on the 1992 Olympic Premiums Collection, where the premiums are said to be:

"… for you to use to involve and motivate associates, or to use with trade and consumers to gain increased sales of our brands.
…
These premiums have been selected to give you excellent quality and value.  You will note the inclusion of items from world-leading manufacturers such as ADIDASâ and BAUSCH and LOMBâ." 

It is further reinforced by the article in the Herald-Sun newspaper of 25 July 1992 announcing that:

"…
And now the Herald-Sun, Victoria's Olympic newspaper, has joined Mars, the official Olympic snack food, to kick off the 1992 Games with a fantastic competition.

On Monday… M&M characters will hand out FREE fun-size Mars Bars and 60g packs of M&Ms … to people buying or carrying a copy of the Herald Sun. 

…
As a bonus to readers, the Herald Sun has 50 super M&M sports bags to give away, crammed full of fun-size Mars Bars and M&Ms."  

No evidence has been produced by the opponent that, given the undisputed renown of the opponent's marks M&M's in respect of confectionery, such reputation would lead a respectable proportion of members of the purchasing public to associate with the opponent any other goods than confectionery in the way contemplated in Southern Cross v Toowoomba Foundry, supra.  

For the reasons outlined above, I find the opponent has succeeded in establishing a case in terms of section 60 of the Act as far as it relates to confectionery and similar goods.   

Conclusion
Having considered the grounds of opposition upon which the opponent chose to rely, I have found it has failed in relation to the s.41 ground.  As to the grounds based on ss.44 and 60, I have found the applicant's mark to be deceptively similar to the opponent's marks of registrations 389692 and 551254 were it to be used on confectionery and chocolate, or goods which contain those substances.  In relation to the s.60 ground, the opponent has established reputation of a deceptively similar mark in respect of "confectionery".  Having regard to that reputation, I am not satisfied, however, that use of the applicant's mark would be likely to deceive or cause confusion if the applicant used its mark in relation to other goods than confectionery, or goods which I regard as "similar", as discussed in relation to the s.44 ground.

In view of my findings, under the provisions of s.55, I have decided that the mark of application 568804 could proceed to registration if the applicant were to delete from the statement of goods, in class 30, the items "chocolate", "chocolates" and "non-medicated confectionery" and to add to the statement of goods the following qualification: "but excluding any products in this class containing, coated with or flavoured with chocolate and/or confectionery".  I allow one month from the date of this decision, and subject to any appeal from the decision, for the applicant to request the proposed amendments to its application.  Should the applicant decline to amend the application as suggested, I will refuse registration of the application.

Costs
As the opponent has only partially succeeded in its opposition, I think it reasonable for each party to cover its own costs. 

Vija Zars
Hearing Officer

30 August 1999