Eli Lilly and Company v Douglas Pharmaceuticals Limited
[2003] ATMO 45
•31 July 2003
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by ELI LILLY AND COMPANY to registration of trade mark application 840820(5) - CEFKOR - filed in the name of DOUGLAS PHARMACEUTICALS LIMITED.
Date of Decision: | 31 July 2003 |
Delegate: | Claudia Murray |
Representation: | Opponent Stephen Burley of Counsel, instructed by Clayton Utz, Lawyers Applicant Mr John O'Mahoney, of Collison & Co, Patent and Trade Mark Attorneys |
Decision: | 1. Section 52 Opposition: s 55(b) registration allowed, subject to a restriction of goods to "antibiotics available to the public only on prescription". 2. Costs awarded against applicant. |
Background
Douglas Pharmaceuticals Limited (the applicant) filed trade mark application number 840820 on 30 June 2000. The subject of the application is the plain word trade mark:
CEFKOR
The application was filed in class 5 of the International (Nice) Classification of Goods and Services, for "Pharmaceutical preparations". No grounds of rejection under the Trade Marks Act 1995 (the Act) were raised against the application, which was advertised accepted for registration in the Australian Official Journal of Trade Marks, on 15 February 2001.
On 3 May 2001, Eli Lilly and Company (the opponent) filed notice of opposition to registration of the trade mark. Nine grounds of opposition were listed in the notice.
The opponent's evidence in support, applicant's evidence in answer and opponent's evidence in reply was duly served and filed. At the end of the process, the matter came to a hearing before me, as a delegate of the Registrar, in Canberra, on 1 April 2003. Mr Stephen Burley of Counsel, instructed by Clayton Utz, Lawyers, of Sydney, represented the opponent in person. Written submissions were provided on behalf of the applicant by Mr John O'Mahoney, of Collison & Co, Patent and Trade Mark Attorneys, of Adelaide.
Evidence
Evidence in support
The opponent's evidence in support comprises a declaration by Michael Graham, MPS Therapeutic Manager of Eli Lilly Australia Pty Ltd (Eli Lilly Aust), dated 6 August 2001. Exhibits MG-A to MG-E accompany Mr Graham's declaration. Eli Lilly Aust markets pharmaceuticals in Australia for the opponent under its class 5 trade marks CECLOR, KEFLOR, KEFLIN, KEFLEX, KEFZOL, KEFROX, KEFTAB and KEFVET. All of these trade marks have priority dates earlier than that of the applicant's CEFKOR trade mark. Mr Graham describes the seven trade marks with a prefix "KEF" as a "family of marks" which has been used extensively by the opponent.
Mr Graham specifically refers to the opponents trade marks numbered 307740 and 723367, for the trade marks CECLOR and KEFLOR respectively. He says that these trade marks are used on a broad spectrum antibiotic, named cefaclor. He declares that the trade mark CECLOR was first used on cefaclor in the Australian market in 1981, and KEFLOR was first used in 1997, in respect of generic cefaclor.
Mr Graham explains that, according to the requirements of the Australian Pharmaceutical Manufacturers Association (APMA), of which his company is a member, promotion of the products sold under the trade marks is limited to physicians. The opponent promotes its goods via medical journals subscribed to by physicians, such as Australian Doctor, Medical Observer and the MIMS Guide, direct mail or direct promotion by sales representatives to physicians. Mr Graham observes it is also a requirement of the APMA that "all promotional material has the trade mark, brand name and generic name of the product clearly visible".
Mr Graham provides significant sales and advertising figures for the trade marks CECLOR and KEFLOR over the years 1998 to 2000. He declares his belief that the opponent's reputation in its various trade marks is so extensive that any use of the opposed trade mark on similar goods will automatically be considered to be use by the opponent. Use of the applicant's trade mark on the goods applied for will, he believes, result in deception and confusion in the marketplace as to the source of those goods.
Evidence in answer
The applicant's evidence in answer comprises a statutory declaration, dated 9 May 2002, by Roger Smart, Director of Regulatory Affairs of the applicant, which is a New Zealand company. Exhibits RS1 to RS4 accompany Mr Smart's declaration.
Mr Smart explains that goods bearing the applicant's trade mark, CEFKOR, are marketed on its behalf in Australia by Douglas Pharmaceuticals Australia Limited, a wholly-owned subsidiary of the applicant. He declares that the trade mark was chosen because of its "distant similarity" in connection with the generic active ingredient of the product, being cefaclor. He gives sales and advertising figures for pharmaceutical preparations sold under the trade mark, which he says was first used in Australia around April 2001.
Mr Smart declares he believes the applicant's trade mark differs substantially from the opponent's trade marks both phonetically, visually and in their "overall theme". Further, and speaking from his experience as someone with a Master's degree in Pharmacy, and being a member of the Pharmaceutical Society of New Zealand, Mr Smart believes the purchasers of the goods in question are "particularly sophisticated", and capable of realising subtle differences between trade marks in the market. He concurs with the opponent's evidence that states that the advertising of pharmaceutical preparations is restricted to members of the medical profession, and says that pharmacists, doctors and nurses responsible for buying and/or prescribing or otherwise handling such goods:
...are buying products of extreme importance which can, if inappropriately administered, have fatal effects and, therefore, we would consider them to appreciate differences between trade marks where within letters making up the mark are different providing substantially for dissimilarities of appearance, oral pronunciation and aural reproduction.
Evidence in reply
The opponent's evidence in reply principally comprises a statutory declaration, dated 7 February 2003, by Gillian Wellock. Ms Wellock is the Anti-Infectives and Legacy Products Manager for Eli Lilly Aust. She provides a more comprehensive breakdown of the opponent's sales figures, and adds a little more explanation of the history of its CECLOR and KEFLOR trade marks. She explains that the CECLOR trade mark was the mark used for the opponent's original patented cefaclor antibiotic product, and that the opponent has continued to use the mark since the expiry of the patent, marketing (since 1997) a generic version of its product as KEFLOR.
Ms Wellock declares her belief that if a non-prescription product branded CEFKOR was available to members of the public, this could be a source of confusion to those who had used the CECLOR or KEFLOR products. Ms Wellock's declaration is accompanied by annexures A and B.
Completing the opponent's evidence in reply are four very similar declarations, three from registered pharmacists and one from a general practitioner. All four declarants attest to their belief that the trade marks CECLOR and CEFKOR are similar, and that this similarity may be a source of confusion to patients. They also declare a belief that the trade marks KEFLOR and CEFKOR "could be a similar source of confusion".
Grounds of opposition
At the hearing, Mr Burley indicated that the opponent only sought to press two of the original nine grounds of opposition listed in its notice. These were grounds under sections 44 and 60.
Section 44 - substantially identical or deceptively similar trade marks
Subsection 44(1), applied to the present circumstances, provides that an application for registration must be rejected if it is substantially identical, or deceptively similar, to another person's trade mark application or registration that has an earlier priority date, and covers similar goods. Like Mr Graham, Mr Burley referred to the opponent's larger family of eight trade marks, but he then focused on two specific registrations, which he argued should stand in the way of the applicant's trade mark, under the provisions of section 44:
| TM Number | Trade Mark | Priority Date | Class | Statement of Goods |
| 307740 | CECLOR | 1 June 1977 | 5 | Antibiotics available to the public only on prescription |
| 723367 | KEFLOR | 4 Dec 1996 | 5 | Antibiotics |
The parties are not in dispute over whether the opponent's trade mark registrations have an earlier priority than the subject application, or whether the goods covered in either case are similar goods. Mr Burley made no submissions contending that the trade marks in question are substantially identical. The single issue for determination here, then, is whether the applicant's trade mark CEFKOR is deceptively similar to either of the opponent's trade marks CECLOR or KEFLOR.
Arguing that the trade marks in question are indeed deceptively similar, Mr Burley catalogued the visual similarities and similarities in pronunciation between the trade marks. He observed that invented words "commonly have a low degree of inherent distinctiveness - they are easily confused because they convey no particular meaning for a consumer to grasp onto". Further, he argued that the CEFKOR trade mark contains a collocation of letters that could appear to a consumer as a reversal or "jumbling" of the order of letters in the opponent's trade marks, magnifying the possibility of confusion. Mr Burley cited Aristoc Ltd v Rysta Ltd [1945] 62 RPC 65, Johnson & Johnson v Kalnin (1993) 26 IPR 435 and Upjohn Co v Elf Sanofi SA (1995) 32 IPR in support of these arguments. He also cited John Fitton & Co Ltd's Application (1949) 66 RPC 110, drawing my attention to the discussion of "contextual confusion" contained therein.
Mr O'Mahoney's response noted that the opponent's declarants commented on the possibility of confusion between the trade marks in terms of "could be" and "it may be possible". He cited Registrar of Trade Marks v Woolworths Limited 45 IPR 411 as authority for the principle that it is necessary to show real tangible danger of deception and confusion occurring and that a mere "may be" or "could be" is not enough. He also cited American Cynamid Company v Peter Vanas [2001] ATMO 11 (12 February 2001) where Hearing Officer Don Nancarrow found the trade marks CALPLATE and CALTRATE not to be deceptively similar, when used in relation to similar goods.
Mr O'Mahoney emphasised the points made in Mr Smart's declaration relating to the applicant's actual use of the trade mark, including the APMA requirement that the generic name of the product, cefaclor, appears on all packaging and promotional material. He also said:
The applicant has stated (see Roger Smart's declaration dated 9th May 2002 item 8) that the trade mark CEFKOR is applied to pharmaceutical products containing the generic active ingredient CEFACLOR. Following the APMA protocol, this trade mark for CEFKOR may only therefore be used for prescription only medicine. Exhibit RS3 included as part of the evidence in answer for the opposition, clearly shows that this is the case.
Hence, products bearing the trade mark CEFKOR provided by the applicant will be pharmaceuticals and not non prescription products, and therefore will not be available on shelves to be a source of confusion [to] members of the public, who may use CECLOR or KEFLOR.
I have carefully weighed the arguments for and against the existence of deceptive similarity between the trade marks in question. While it is true that, as the applicant has described, they have several noticeable differences when compared side-by-side, this is the test for substantial identity between marks, not deceptive similarity. (Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407, at 415.) Drawing not least on my own experience, I conclude that, in certain circumstances, the similarities between the trade marks could indeed lead to persons without a medical or pharmaceutical background being deceived or confused.
The reasons for the similarities between the trade marks lie in the common derivation of all three trade marks from the generic antibiotic name, "cefaclor". Mr O'Mahoney described the process of "selecting a trade mark close to the generic name to identify the proprietor's own preparation without displacing the original significance of the generic name" in his submissions. He said this is a "general practice" in the pharmaceutical trade, and drew my attention to Glaxo Group Ltd v Pathstream Ltd, (1987) 9 IPR 95, where it is discussed in some detail. In that case, the trade mark SALBUTAREMED was found to be distinguishable from the generic name "salbutamol". Mr Burley commented upon Mr Smart's explanation that the applicant's trade mark was chosen because of its "distant similarity" to cefaclor thus:
Further, it is a matter of curiosity that the applicant's choice of mark should be one that far more closely resembles the opponent's own established marks than the three syllable word "cefaclor" it was intended to resemble.
I do not necessarily agree with this observation. It seems to me that, given the constraints associated with the pharmaceutical naming practice I have described, it is hardly surprising that it frequently results in striking similarities between trade marks in that field. Under the previous legislation, this has resulted in refusal of registration of trade marks NUVELLE and APROVEL, in the face of prior registration of PROVELLE. (The Upjohn Co v Schering Aktiengesellschaft (1994) 29 IPR 434, and Upjohn Company v Elf Sanofi SA, supra.) In the latter case, Hearing Officer Terry Williams compared the trade marks APROVEL and PROVELLE, and found:
When the marks are looked at side by side, it may still seem unlikely that people, with ordinary levels of caution, will go wrong with both the end and the beginning of the marks. None the less, I think that this is precisely what will happen. In practice, marks are not always or often available for such side-by-side comparison. There is sufficient of both the look and the sound of the opponent's mark about the invented word adopted by the applicant. I do not believe that there is enough difference to prevent reasonable instances of confusion when one mark is encountered against a background of the imperfect recollection of the other. It follows from this, and to a lesser extent from the similarities of sound, that the two marks are deceptively similar.
It is for the applicant to establish that it is entitled to its registration. In any other case, where there is a reasonable likelihood of deception, the established law says that I must refuse to register the application. This I do.
Under the Trade Marks Act 1955, the applicant for registration bore the onus, both in examination and in opposition proceedings, of demonstrating that its trade mark qualified for registration. That onus has shifted under the Trade Marks Act 1995. Lahore, Patents, Trade Marks and Related Rights (2001), paragraph 66,320:
Under the 1955 Act it was well established that in opposition proceedings the onus of proof lay with the applicant. The opponent needed only to establish that there were matters for the applicant to answer. (Re Appn by Karachi Aerosol Co Ltd(1985) 6 IPR 33 at 34; Camelot Design Industries Group Pty Ltd v Bernard Leser Publications Pty Ltd(1987) 9 IPR 596 at 598.) A “reversed” onus of proof operates under the 1995 Act. The applicant is entitled to acceptance unless grounds for opposition are established — “[t]he onus is on the opponent to convince the registrar of the validity of the grounds of opposition that they have cited." (Trade Marks Office Draft Manual of Practice and Procedure, Part 46.)
The opponent's evidence includes no examples of actual occurrences of persons being deceived or confused. Instead, it includes a very small number of declarations from pharmacists, and one declaration from a doctor, attesting to the belief that the use of the applicant's trade mark would likely be a source of confusion, to patients, given its similarity to both of the opponent's trade marks. And, as Mr O'Mahoney submitted:
Each declarant indicates that in the opinion of the person providing the Statutory Declaration, CEFKOR is confusingly similar to CECLOR and further CEFKOR is confusingly similar to KEFLOR.
Taking these two statements together means that CECLOR is confusingly similar to KEFLOR.
It is important that the Hearing Officer is aware that these two marks CECLOR and KEFLOR, co-exist in the relevant pharmaceutical market place here in Australia. We would argue that if CECLOR and KEFLOR are not confusingly similar, surely then CEFKOR cannot be confusingly similar to either CECLOR or KEFLOR.
Rather, I believe that the highly regulated nature of that marketplace, and the specialised knowledge of the professionals it targets, allows the co-existence of many trade marks which the general public might consider confusingly similar, but which do not deceive or confuse the people who have to deal with them. Both parties to this opposition have described in some detail the constraints placed upon them by the APMA in the labelling and advertising of their goods. These clearly assist professionals in differentiating between products, and are an added safeguard against their being deceived or confused, despite their natural caution, by trade marks with similar derivations.
An ordinary member of the public, who receives a prescription for medication from a doctor and takes it to a pharmacist to be dispensed, depends upon the expert knowledge of both for the provision of the correct substance that will cure his or her ills. Patients are familiar with the practice of substitution by pharmacists of "generics" for proprietary medications. They are unlikely to be particularly familiar with the trade names of many prescription pharmaceuticals in the first instance, as manufacturers of prescription medication are not permitted to advertise their products to the general public. They are not likely to be deceived and confused by similar trade marks applied to medications with the same ingredients, when in any case, their access to these medications is strictly controlled by professionals. Patients are not the target audience for such trade marks.
In Registrar of Trade Marks v Woolworths Limited, supra at 428, French J summarises the essential elements for determining deceptive similarity between trade marks, first set out in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. Two of the essential elements he describes are related to the surrounding circumstances in which the trade marks are used:
(iii) In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.
...
(v) The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. 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.
In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v The Bali Company Inc (1973) 129 CLR 353 at 362:
"...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion."
I have discussed, above, the surrounding circumstances in which the relevant goods will be bought and sold, and the character of the probable acquirers of those goods. However, I also need to address the second of French J's points quoted above, and take into account the full scope of the applicant's statement of goods, in determining whether its trade mark is deceptively similar to those of the opponent. The statement covers "Pharmaceutical preparations". Reference to the 3rd edition of The Macquarie Dictionary, 2000, provides a definition of such goods as prepared, manufactured, or compounded items, especially medicines, sold at a pharmacy. While this does not seem an especially broad range of goods, it still, as the opponent has noted, includes items that might be purchased "over the counter" from a pharmacy by ordinary members of the public. I believe that here there is potential for deception and confusion of ordinary people, if, knowing of the opponent's trade marks used in relation to antibiotics, they are faced with the applicant's trade mark, available without prescription, and applied to a substance that has no antibiotic properties.
Accordingly, I find the opponent's ground of opposition under section 44 to be successful, while the applicant's goods remain as "pharmaceutical preparations". However, if the applicant is prepared to restrict its goods to "antibiotics available to the public only on prescription", then I believe in those circumstances of use, (which simply reflect the reality of the regulated marketplace), the trade marks will not be deceptively similar. In that instance, subject to there being no other successful ground of opposition, the trade mark may proceed to registration.
Section 60 - trade mark with a reputation in Australia
To satisfy section 60, an opponent must demonstrate that, at the time of filing of the opposed application, it had a reputation in a substantially identical or deceptively similar trade mark, such that use of the applicant's trade mark would likely cause the public to be deceived or confused. The opponent's trade mark need not be subject of an application or registration, in order to be able to be relied upon under this section.
Mr Burley focused on the opponent's registered trade mark CECLOR, in pressing this ground of opposition. He cited his earlier arguments (in terms of section 44) upon the issue of deceptive similarity between the trade marks, and relied upon the opponent's evidence of its use of the trade mark over twenty years, prior to the filing of the applicant's trade mark. Mr O'Mahoney also relied upon his arguments in terms of section 44 that the trade marks in question were not deceptively similar.
I have found that, in certain circumstances, the trade marks CEFKOR and CECLOR are deceptively similar. Therefore, I must consider whether the second criterion under section 60 is satisfied by the opponent's trade mark; that is, whether that trade mark, at the relevant date, had a significant reputation. Kenny J in McCormick & Co v Mary McCormick (2001) 51 IPR 102, at page 129, quoted with approval a discussion, by Hearing Officer Iain Thompson in an earlier matter, of ways in which reputation in a trade mark can be developed. Clearly, an opponent's reputation can accrue from a variety of sources. However, as Kenny J continues (supra):
In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product.
I do not believe the opponent has met its burden of proof in relation to this criterion. I have already found that the medical community, although undoubtedly much more familiar than the general public with the opponent's trade mark CECLOR, will not find the trade marks in question to be deceptively similar. Accordingly, although the opponent's trade mark may well have developed a significant reputation within this very specialised group, use of the applicant's trade mark in the face of it is unlikely to lead to deception or confusion. Therefore, in order for the opponent to have been successful under section 60, it must have demonstrated an established reputation for the CECLOR trade mark in the community as a whole. This it has failed to do.
It seems to me that the very manner in which the opponent's goods are regulated in the marketplace militates against anything but a very gradual development of the requisite level of reputation necessary for success under section 60. When:
a manufacturer has been the exclusive provider of a prescription medication, under patent, for many years,
promotion of that medication is restricted to a certain segment of the public only, and
whenever a trade mark is used in relation to the medication, it is always closely accompanied by the closely related generic name of its active ingredient,
it is hard to see how the development of that trade mark's reputation in Australia could ever be otherwise than a lengthy process.
I find the opponent's ground of opposition under section 60 to be unsuccessful.
Decision
I find that the opponent has established a single ground of opposition under subsection 44(1). I further find that this ground does not apply in relation to "antibiotics available to the public only on prescription", which is a subset of the applicant's goods. My decision in relation to the applicant's trade mark as it stands must be to refuse registration. However, provided that the applicant, within fourteen days of the date of this decision, consents to restrict its specification of goods to "antibiotics available to the public only on prescription", the trade mark may then proceed to registration one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued.
Costs
Both parties have sought a favourable award of costs. It is usual for costs to follow the event, and the opponent has already been either wholly or at least significantly successful. I therefore award costs, according to the official scale, against the applicant Douglas Pharmaceuticals Limited.
Claudia Murray
Hearing Officer
Trade Marks Hearings
31 July 2003