Energy Solutions (US) LLC v Earth Science Laboratories, Inc

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Energy Solutions (US) LLC to registration of trade mark application number 2291713 (class 1) - KLEENBREAK - in the name of Earth Science Laboratories, Inc.

Delegate:

Anne Makrigiorgos

Representation:

Opponent: Phillips Ormonde Fitzpatrick

Applicant: Spruson & Ferguson

Decision:

2024 ATMO 112

Trade Marks Act 1995 (Cth) – opposition under s 52 – ss 42(b), 44 and 60 pursued – no ground of opposition established – trade mark to proceed to registration

Background

This decision concerns an opposition under s 52 of the Trade Marks Act 1995 (Cth)[1] by Energy Solutions (US) LLC (‘Opponent’) to registration of the following trade mark:
Trade mark number    2291713 (‘Application’)
Trade mark:                KLEENBREAK (‘Trade Mark’)
Applicant:                   Earth Science Laboratories, Inc (‘Applicant’)
Filing date                  5 August 2022
Specification:              Class 1: Chemicals used for water treatment; scale removing preparations, other than for household purposes; chemical products for preventing scale (‘Applicant’s Goods’)
[1] Unless otherwise stated, each reference to a regulation below is a reference to a regulation in the Trade Marks Regulations 1995 (Cth) and each reference to a section is a reference to a section of the Trade Marks Act 1995 (Cth).
The Trade Mark was examined and advertised as accepted for possible registration on 6 January 2023.
On 23 February 2023, the Opponent filed a Notice of Intention to Oppose the Application. On 23 March 2023, the Opponent filed its Statement of Grounds and Particulars (‘SGP’). The Applicant filed a Notice of Intention to Defend the opposition on 9 June 2023.
The Opponent filed Evidence in Support (‘EIS’) on 13 September 2023. The Applicant did not file any Evidence in Answer.
The parties were given the opportunity to request a hearing. Neither party requested a hearing, rather the Opponent requested a decision on the written record. Under reg 21.15(5)(d), as a delegate of the Registrar of Trade Marks, I have decided this matter on the information available to the Registrar, in this case being the SGP and the EIS.
Grounds and onus
The SGP nominates grounds of opposition under ss 42(b), 44 and 60.
The Opponent carries the burden of establishing one or more of the grounds of opposition[2] on the balance of probabilities.[3] The date at which the rights of the parties are assessed is 5 August 2022 (‘Relevant Date’), being the filing date of the Trade Mark and the priority date of the Trade Mark for the purposes of ss 44 and 60.
[2] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).
[3] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ).
Evidence and Summary
As its EIS, the Opponent filed a Declaration of Kari Harper, marketing and communications manager of the Opponent made on 12 September 2023 with Exhibits 1 to 12 (‘Harper’).
Much of Harper refers to the use and registration of the trade mark CLEARBREAK in the United States of America by the Opponent and its predecessors in title. Harper also claims that the Opponent is a wholly owned subsidiary of Solvay SA.
Harper provides details of the Opponent’s protected International Registration Designating Australia (‘IRDA’) (‘Opponent’s Mark’) which appear below:
IRDA number: 2060897
Trade mark:
Goods: Class 1: Chemical agents; demulsifying agents and emulsion breakers used in crude oil production
Priority date: 6 December 2019
Harper claims that the Opponent (or its predecessor in title) first used the Opponent’s Mark in Australia in August 2015 and continues to use the Opponent’s Mark, primarily in Queensland, in relation to demulsifying agents and emulsion breakers used in crude oil production (‘Used Goods’). Harper claims that the Used Goods are distributed to customers in Australia by the Opponent’s distributor, Brenntag Australia Pty Ltd, located in Victoria.
Harper claims the Opponent’s Mark has been used on product labelling and exhibits a Solvay brochure dated February 2023 entitled ‘Demulsifiers’ listing a number of goods under the Opponent’s Mark. I note this brochure does not showing any product labelling. I also note there is no evidence that the brochure was available in Australia. Rather the brochure provides the following contact details under the heading Asia Pacific:
Harper claims that advertising and promotion of the Used Goods under the Opponent’s Mark has essentially been through direct discussions with customers. No documentary evidence of any advertising or promotion in Australia is provided.
Harper provides a table of revenue claimed to be generated from the sale of the Used Goods in Australia from 2015 to 2022. I note the figures are expressed in terms of whole numbers in the hundred thousands prefaced by the words ‘in excess of’, which I consider indicates they are not the actual revenue figures. I also note that there is no indication of the cost of the Used Goods, nor the number of Used Goods sold and nor the number of customers.
Harper also provides copies of overseas registration certificates of the Opponent’s Mark.
Discussion and Reasons
Section 44/Reg 4.15A[4]
[4] Reg 4.15A is identical to s 44 but applies when the basis for the ground of opposition is an IRDA.
The relevant provisions of s 44 are reproduced below:
Identical etc. trade marks
(1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:
(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar goods or closely related services; or
(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.
Note 1:For deceptively similar see section 10.
Note 2:For similar goods see subsection 14(1).
Note 3:For priority date see section 12.
Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.
The SGP nominates the Opponent’s Mark as the basis for this ground of opposition claiming that the Trade Mark is substantially identical with or deceptively similar to the Opponent’s Mark.
I am satisfied that the priority date of the Opponent’s Mark is earlier than the Relevant Date and is in a name other than the Applicant.
The next consideration is whether the Trade Mark is substantially identical with or deceptively similar to the Opponent’s Mark.
Substantial Identity
The starting point of an analysis as to whether trade marks are substantially identical is the well-known dicta of Windeyer J in The Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (‘Shell’),[5] where his Honour stated:
In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.[6]
[5] [1963] 109 CLR 407 (‘Shell’).
[6] Ibid 415.
Thus, if a total impression of similarity emerges from a comparison between the two marks, the marks are substantially identical.
Whether there is substantial identity is a question of fact.[7] The comparison here is between and KLEENBREAK.
[7] Ibid.
I am not satisfied that the Trade Mark is substantially identical to the Opponent’s Mark. On a side by side comparison of the Trade Mark and the Opponent’s Mark there are clear differences which mean that a total impression of dissimilarity emerges. While the marks share the suffix BREAK, visually and aurally the differences between the prefix of the respective marks, KLEEN compared to CLEAR, operate to render the marks clearly different when compared as a whole.
I move then to consider whether the Trade Mark and the Opponent’s Mark are deceptively similar.
Deceptive Similarity
Section 10 provides a definition of deceptively similar being that “a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion”.
Justice Windeyer outlined the approach for the assessment of deceptive similarity in Shell. His Honour observed:
On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's [mark].[8]
[8] Shell (n 5) 416.
The High Court in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd[9] conveniently stated the relevant principles, which may be summarised as follows:
[9] [2023] HCA 8 (Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ).
(a)the resemblance between the two marks must be the cause of the likely deception or confusion;[10]
[10] Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd [2022] FCAFC 157, [69] (Yates, Abraham and Rofe JJ).
(b)in the trade mark comparison, the marks must be judged as a whole taking into account both their look and their sound;[11]
[11] Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536, 538 (Dixon, Williams and Kitto JJ).
(c)the marks should not be compared side by side;[12]
(d)the effect of spoken description must be considered; if a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods (or services), then similarities both of sound and of meaning may play an important part;[13]
(e)the focus is upon the effect or impression produced on the mind of potential customers of the goods (or services) in relation to which the two marks are used and in the case of the registered mark, allowing for ‘imperfect recollection’;[14]
(f)the notional buyer is a person with no knowledge about any actual use of the registered mark, the actual business of the owner of the registered mark, the goods the owner produces, any acquired distinctiveness from the use of the marks prior to filing, or any reputation associated with the registered mark;[15]
(g)the correct approach is to compare the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all of the goods or services covered by the registration), with the impression that the notional buyer would have of notional and normal fair use of the opposed mark;[16]
(h)“deceived” implies the creation of an incorrect belief or mental impression; “causing confusion” may merely involve “perplexing or mixing up the minds” of potential customers;[17]
(i)the usual manner in which ordinary people behave must be the test of what confusion or deception may be expected, having regard to the character of the customers who would be likely to buy the goods in issue;[18]
(j)it is not necessary to establish actual probability of deception or confusion, but a mere possibility of confusion is not enough. There must be a real, tangible danger of deception or confusion occurring. It is enough if the notional buyer would entertain a reasonable doubt as to whether, due to the resemblance between the marks, the two products come from the same source. Put another way, there must be “a real likelihood that some people will wonder or be left in doubt about whether the two sets of products ... come from the same source”;[19]
(k)evidence of actual confusion is of great weight, but not essential, and lack of such evidence may also be relevant;[20] and
(l)any intention to deceive or cause confusion may be a relevant consideration but is not required.[21]
[12] Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641, 658 (Dixon and McTiernan JJ) (‘Woollen Mills’).
[13] Ibid.
[14] Ibid.
[15] C A Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42, 62 [43] (Ryan, Branson and Lehane JJ).
[16] Shell (n 5) 415.
[17] Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107, 122 [39] (Black CJ, Sundberg and Finkelstein JJ) quoting Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50, 62 (Richardson J).
[18] Campomar Sociedad Limited v Nike International Limited (2000) 202 CLR 45, 79 [83] (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ).
[19] Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020, [50(ii)] (French J) restating principles from Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 594-595 (Kitto J).
[20] Woollen Mills (n 12).
[21] Hashtag Burgers Pty Ltd v In-N-Out Burgers Inc (2020) 385 ALR 514, 533 [67] (Nicholas, Yates and Burley JJ) citing Woollen Mills (n 12).
The question is whether there is a real tangible risk that the result of the use of the Trade Mark will be that a reasonable person will be caused to wonder whether it might not be the case that chemical agents bearing the Trade Mark are from the same source as chemical agents bearing the Opponent’s Mark. To answer this question, I must estimate the impression that a person of ordinary intelligence and memory would have of the Trade Mark and of the Opponent’s Mark.
Visually, I consider that the Trade Mark has some structural similarities with the Opponent’s Mark, namely, both marks consist of ten letters and 2 syllables, each ends with the word BREAK, and each contains the second and third letters ‘le’. However, both marks begin with a different letter and a different first word, one being the common word CLEAR and the other being the invented word KLEEN. I consider that the first word KLEEN emerges as a striking and distinct visual element of the Trade Mark. Further, visually the trade marks and KLEENBREAK are in my view more likely to be perceived and remembered by consumers in their entirety.
Aurally, I consider that the Trade Mark and the Opponent’s Mark are appreciably different. Assuming the elements of the respective marks are pronounced as they are spelt, the differing element KLEEN would be pronounced as the common English word CLEAN. The prefixes of the respective marks play a particularly important role in creating an appreciably different aural effect. I cannot envisage any realistic circumstance where a consumer of ordinary intelligence would pronounce the two marks the same or in a manner that results in a readily perceptible aural similarity. KLEEN does not sound like CLEAR and neither KLEEN nor CLEAR lend themselves to mispronunciation.
Further, as the difference between the trade marks occurs at the beginning of the respective trade marks, the words of Sargant J in London Lubricants (1920) Ltd’s Appn become relevant:
[T]he tendency of persons using the English language to slur the termination of words also has the effect necessarily that the beginning of words is accentuated in comparison, and in my judgment, the first syllable of a word is, as a rule, far the most important for the purpose of distinction.[22]
[22] (1925) 42 RPC 264, 279.
Conceptually, the Trade Mark is a combination of two common English words whereas the Opponent’s Mark is not. As a whole, and KLEENBREAK have different connotations and ideas, visually and aurally. connoting a clear or transparent break and KLEENBREAK connoting a clean or unstained break. Overall, I must observe the two trade marks in their entirety and doing so reveals differences in overall impression.
Finally, I consider that the Applicant’s Goods are specialised being chemical agents and are directed to particular markets depending on their intended use. Given that chemical agents can be hazardous and generally do not have universal uses, customers would typically adopt a relatively high degree of care and scrutiny, such that the particular visual, aural and conceptual differences in the current marks are likely to be noted by the consumer of the Applicant’s Goods and the goods of the Opponent’s Mark. As a result of the differences in sound, meaning and the visual appearance of the respective marks, it is unlikely that the use of the Trade Mark on the Applicant’s Goods will deceive or cause confusion because of any similarity it has to the Opponent’s Mark.
A consideration of deceptive similarity is not concerned with the mere possibility of deception or confusion between trade marks but a real, tangible danger of it occurring. After consideration of the differences in the respective marks, taken together, as a matter of impression and common sense they generate an overall visual, aural and conceptual impression of difference.
I am not satisfied that consumers viewing and KLEENBREAK would be caused to wonder whether the relevant goods originate from the same trade source, or that the trade marks are otherwise connected in some way. I find that there does not exist a real, tangible danger of deception or confusion between the two. The trade marks are not deceptively similar and this ground of opposition is not made out.
Section 60
Section 60 provides:
Trade mark similar to trade mark that has acquired a reputation in Australia
The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and
(b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.
Note:For priority date see section 12.
To establish this ground, the Opponent must demonstrate the existence of another trade mark which had acquired a reputation in Australia before the Relevant Date. The Opponent must then establish that because of this reputation, use of the Trade Mark would be likely to deceive or cause confusion.
In summary, the SGP claims that the Opponent and/or a predecessor in title has continuously used the Opponent’s Mark since 2015 throughout all states and territories of Australia in relation to the Used Goods.
The SGP also claims information not in evidence namely:
·the Used Goods bearing the Opponent’s Mark have been sold by the Opponent’s affiliates Solvay Interox Pty Ltd and Cytec Australia Holdings Pty Limited.
·the advertising and promotion of the Used Goods has generally been online at which differs from the Opponent’s evidence that advertising and promotion of the Used Goods has essentially been through direct discussions with customers given the nature of the goods.
In any event, these claims in the SGP have little if any probative value given their lack of dated documentary support.
Reputation
The meaning of reputation was considered by Kenny J in McCormick & Co Inc v McCormick (‘McCormick’) as referring to ‘the recognition of the [trade mark] by the public generally’.[23]
[23] [2000] FCA 1335, [81] (‘McCormick’).

Further, Kenny J stated in McCormick that:
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 ... public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things.[24]
[24] Ibid [86].
The reputation in the other trade mark must be amongst a ‘significant or substantial’ number of Australian consumers but this is tempered by the nature of the relevant market.[25] Here the nature of the Used Goods can be characterised as chemical agents for use in crude oil production. Therefore, the relevant market is highly specialised. Meanwhile, the ‘existence and extent of reputation’ must be established as a matter of fact by the Opponent.[26]
[25] See, eg, Renaud Cointreau & Cie v Cordon Bleu International Ltee [2001] FCA 1170, [75] (Moore, Tamberlin and Goldberg JJ).
[26] ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159, [77] (Lockhart J).
In Rodney Jane Racing Pty Ltd v Monster Energy Company, it was observed that:
The reputation of a trade mark has quantitative and qualitative dimensions. The quantitative dimension concerns the breadth of the public that are likely to be aware of the mark, which can be evidenced by the quantum of sales, advertising and promotion of goods or services to which the mark is applied. The qualitative dimension concerns the image and values projected by the trade mark, which affects the esteem or favour in which the mark is held by the public generally.[27]
[27] [2019] FCA 923, [83] (O’Bryan J).
There are significant weaknesses and a lack of detail in the Opponent’s evidence. Of note is that there are examples of use of the Opponent’s Mark which are either post the Relevant Date or undated, bald unsupported assertions concerning advertising and marketing, no indication of how the Used Goods are sold in Australia, no indication of the nature of the Opponent’s customers and no indication regarding the number of Australian customers who have purchased the Used Goods.
The one detailed piece of evidence is revenue figure metrics but even then, these are non-specific revenue figures and the Opponent does not provide the cost of the Used Goods so as to indicate how significant or insignificant these revenue figures are.
Further, the evidence does not establish that the Opponent’s Mark has attracted an appreciable level of esteem in the market. Given the Opponent has been economical in the provision of its evidence, there is little on which I can objectively determine the existence or extent of any reputation in the Opponent’s Mark in Australia.
Therefore, the Opponent has not satisfied me as a matter of fact of any reputation in the Opponent’s Mark amongst a ‘significant or substantial’ number of Australian consumers of the Used Goods, let alone a reputation sufficient to enliven s 60.
As I have found that the Opponent’s Mark has not acquired a reputation in Australia before the Relevant Date, there is no need for me to consider the second limb of s 60 and the ground of opposition under s 60 has not been established.
Section 42(b)
Section 42(b) provides that a trade mark must be rejected if its use would be contrary to law.
The SGP claims that based on the Opponent’s reputation in the Opponent’s Mark in Australia, the use of the Trade Mark would be contrary to ss 18 and 29 of the Australian Consumer Law (‘ACL’) which forms Schedule 2 to the Competition and Consumer Act 2010 (Cth). Additionally, the SGP claims that use of the Trade Mark would amount to the common law tort of passing off.
ACL
Section 18 of the ACL concerns conduct or representations that have, or are likely to, mislead or deceive. Section 29 of the ACL concerns representations that are false or misleading. These are stricter requirements than s 60 which can be established if the use is likely to cause confusion or wonderment.[28]
[28] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 (Gibbs CJ); Monster Energy Company v Mixi Inc [2020] FCA 1398, [33] (Stewart J).
The claim that use of the Trade Mark would constitute misleading or deceptive conduct under the ACL relies on the Opponent establishing a reputation in the Opponent’s Mark. If there is no reputation, there can be no mistaken belief or assumption on the part of the consumer caused by use of the Trade Mark, and therefore such use cannot be misleading or deceptive.
I have already determined under s 60 that the evidence is insufficient to establish reputation in the Opponent’s Mark in Australia. Absent sufficient evidence of reputation, I am not satisfied that use of the Trade Mark would be contrary to law, and the ground under s 42(b) is not established.
Passing Off
Where use of a trade mark does not contravene s 18 of the ACL neither will it amount to the tort of passing off.
The relationship between passing off and s 52 of the now repealed Trade Practices Act 1974 (Cth) (‘TPA’) was addressed in Re Equity Access Pty Ltd v Westpac Banking Corporation:
The scope for the operation of s.52 will thus be broader than that involved in the tort of passing off so that in a case such as the present where the claim is for the protection of the reputation in a name against the use of that name by another, failure to succeed under s.52 or s.53 will invariably mean that proceedings for passing off would likewise fail.[29]
[29] [1989] FCA 506, [40] (Hill J).
Section 18 of the ACL is the equivalent of s 52 of the TPA.[30] The above comments are equally applicable to the relationship between s 18 of the ACL and the tort of passing off.
[30] Primary Health Care Limited v Commonwealth of Australia [2017] FCAFC 174, [410] (Rangiah J).
As I have found that s 18 of the ACL has not been contravened, it follows that use of the Trade Mark does not amount to passing off.
Decision
Section 55 relevantly provides:
Decision
(1)Unless subsection (3) applies to the proceedings, the Registrar must, at the end, decide:
(a)to refuse to register the trade mark; or
(b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;
having regard to the extent (if any) to which any ground on which the application was opposed has been established.
Note:For limitations see section 6.
The Opponent has not established a ground of opposition. Accordingly, trade mark number 2291713 may proceed to registration one month from the date of this decision.
If the Registrar is served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued and that the disposition of the application should otherwise be in accordance with the Court’s order or direction.
Costs
The Opponent sought an award of costs. Costs usually follow the event. Accordingly, I award costs against the Opponent in accordance with the amounts in Schedule 8 of the Regulations.
Anne Makrigiorgos
Hearing Officer
Delegate of the Registrar of Trade Marks
21 June 2024

[2024] ATMO 112

21 June 2024

Key Legal Topics

Areas of Law

Intellectual Property

Commercial Law

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Appeal