Erbak-Uludag Mesrubatve Gida Sanayi Anonim Sirketi v Michael Rainbow and Yaser Yuksel

[2002] ATMO 82

TRADE MARKS ACT 1995

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

Re:Opposition by ERBAK-ULUDAG MESRUBATVE GIDA SANAYI ANONIM SIRKETI to registration of trade mark application 789859(32) - ULUDAG SONDUR ATESINI AND DEVICE - filed in the name of MICHAEL RAINBOW and YASAR YUKSEL.

DATE OF DECISION:

19 September 2002

DELEGATE:

Hearing Officer Claudia Murray

REPRESENTATION:

Opponent

Michael Kirov of Spruson & Ferguson, Patent and Trade Mark Attorneys

DECISION:

1. Section 52 Opposition: registration refused - s 55(a)

2. Costs awarded against applicants

Background

Michael Rainbow and Yasar Yuksel (the applicants) filed trade mark application no. 789859 on 31 March 1999. The subject of the application is the trade mark:

The application is in class 32 of the International (Nice) Classification of Goods and Services, for "Beers, mineral and aerated waters and other non-alcoholic drinks; fruit drinks and fruit juices; syrups and other preparations for making beverages".

The trade mark application was accepted for registration at the first report, and its acceptance was advertised in the Official Journal of Trade Marks on 14 October 1999. The following translation endorsements were applied to the application:

The applicant has advised that the Turkish word ULUDAG appearing in the trade mark may be translated into English as A NAME OF A MOUNTAIN IN TURKEY.

The applicant has advised that the Turkish words SONDUR ATESINI appearing in the trade mark may be translated into English as EXTINGUISH YOUR FIRE.

On 14 April 2000, after an extension of time, a notice of opposition to registration of the trade mark was filed by a Turkish company, Erbak-Uludag Mesrubatve Gida Sanayi Anonim Sirketi (the opponent). Six grounds of opposition were listed in the notice.

By 14 December 2001, the opponent's evidence in support had been served and filed. No evidence in answer, nor any other communication, was forthcoming from the applicants, but in due course, the opponent requested a hearing of the opposition. This came before me, as a delegate of the Registrar, in Canberra, on 3 July 2002. Mr Michael Kirov from Spruson and Ferguson, Patent and Trade Mark Attorneys, Sydney, represented the opponent. The applicants did not attend the hearing, and made no written submissions for my consideration.

The Evidence

The opponent's evidence in support comprises a statutory declaration, dated 17 November 2001, by Mehmet Hakki Erbak, President of the Board of Directors of the opponent. The declaration is accompanied by Exhibits 1-5.

Mr Erbak explains in his declaration that the opponent has used the trade mark ULUDAG, which comprises part of the subject trade mark, in many countries of the world since at least 1982 in relation to non-alcoholic and carbonated beverages including cola, soda and seltzer water, lemonade and orange drinks. The opponent has registrations for the ULUDAG trade mark in several countries of the world, and is the applicant for Australian trade mark no. 814357 for the mark ULUDAG in class 32. Exhibit 2 to Mr Erbak's declaration is a list of registration numbers for the trade mark in thirteen countries, including Germany, France, Spain and Egypt.

Mr Erbak also explains that his company has used what he describes as the "Fire Extinguisher Device", within a border showing the words SONDUR ATESINI, (both of which also appear in the subject trade mark), in relation to non-alcoholic beverages since at least 1997 in Australia and throughout the world. He declares that his company first exported non-alcoholic and carbonated beverages to Australia in 1997, and that those beverages were labelled with both the SONDUR ATESINI and Fire Extinguisher Device trade mark, and also the ULUDAG trade mark, as shown in the examples in Exhibit 3. An aspect of one of these examples is:

Although a little unclear in such a small representation, the example given in evidence, dated 13 July 1998, clearly shows an identical bottle/fire extinguisher device within a circular border featuring the words SONDUR ATESINI, to that which appears in the applicant's trade mark. The device can be described as that of a soft-drink bottle, featuring the word "uludag", and fitted with hose and trigger device, so as to give it the appearance of a fire extinguisher, as shown below:

According to Mr Erbak, the opponent does not advertise either of its trade marks in Australia, but relies on potential customers choosing its goods at the point of sale and subsequently recognising the brands. The annual value of sales made in Australia in the years 1997 to 2000 using this method is substantial.

Finally, Mr Erbak declares that the fire extinguisher device contained within the applicant's trade mark was created for the opponent by its advertising agency prior to the company's use of the trade mark in Australia in 1997. He attests to his belief that international copyright law would protect the device.

Grounds of Opposition

Mr Kirov began his submissions by advising me that the opponent would not be proceeding on the fourth ground listed in its notice of opposition. This ground related to the applicant's intention to use or authorise use of the trade mark in Australia, or to assign it to a body corporate to be used. The grounds left were those to be argued in terms of sections 42, 58 and 60 of the Trade Marks Act 1995 (the Act).

Mr Kirov then put it to me that there are two general considerations which apply in uncontested oppositions. Firstly, where the opponent had raised matters that required an answer, but the applicant had not responded, the Registrar was not to act as an advocate for the applicant. Secondly, if there was doubt as to whether the opposed mark would cause deception or confusion in the public's mind, that matter must be resolved against the applicant. He cited Camelot Design Industries Group Pty Ltd v Bernard Leser Publications Pty Ltd (1987) 9 IPR 596 and Eno v Dunn (1890) 7 RPC 311 in support of these contentions.

Section 42 - use of trade mark contrary to law

Section 42 of the Act provides:

An application for the registration of a trade mark must be rejected if:

(a) the trade mark contains or consists of scandalous matter; or

(b) its use would be contrary to law.

Submissions

Mr Kirov submitted that, in terms of subsection 42(b), the use of the opposed trade mark would breach both the opponent's copyright in the fire extinguisher device that appears in the mark, and also section 52 of the Trade Practices Act 1974 (the Trade Practices Act). He said that historically the Trade Marks Office has "excused itself" from making determinations at opposition under subsection 42(b). This was in the absence of a clear finding by a court of competent jurisdiction that a mark infringed the law, or where complex considerations of legal matters beyond those specifically set out in the (Trade Marks) Act were involved. However, in Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, (the Advantage-Rent-A-Car case) Madgwick J said:

However, in my opinion the fact that the existence of any contrariety to law is to be exercised in some circumstances by an administrative body and, in other circumstances, by a judicial body does not mean that the phrase "if its use would be contrary to law" should have an ambulatory meaning, depending upon what kind of tribunal is to apply it. Nor can any reticence on the part of an administrative decision-maker to express an opinion on a matter of law be encouraged. The idea that "contrary to law" in the context of judicial proceedings means contrary to all laws, whilst in the context of proceedings before the Registrar it means contrary to laws which are easy for the Registrar to determine or which are "clear cut", is not sustainable.

Mr Kirov argued that the present case was "on all fours" with the Advantage-Rent-A-Car case. He drew my attention to the fact that Turkey is a country to which the Copyright Act 1968 (the Copyright Act) applies. He submitted that the following points were all uncontested in evidence before the Registrar:

• The fire extinguisher device contained within the opposed trade mark is an "artistic work" in terms of paragraph 10(1)(a) of the Copyright Act.

• The fire extinguisher device is "original" in terms of subsection 32(1) - having been created for the opponent by its advertising agency in 1997, as attested to by its President of Board of Directors in evidence.

• The opposed trade mark substantially reproduces the device in which the opponent claims copyright.

Further, said Mr Kirov, use of the opposed trade mark would necessarily involve publishing it, which is the exclusive right of the copyright owner. Finally, he said the opponent has never authorised the applicants to use the device and therefore the applicant's use of it would be contrary to the Copyright Act and accordingly contrary to law, in terms of section 42 of the (Trade Marks) Act.

Discussion

I agree with Mr Kirov that this case has close parallels with the Advantage-Rent-A-Car case. At paragraph 16, Madgwick J summarised the manner in which the Copyright Act may protect citizens of foreign countries:

Section 32(1) of the Copyright Act provides that "copyright subsists in an original literary, dramatic, musical or artistic work that is unpublished and of which the author was a qualified person at the time when the work was made". A qualified person is defined in s 32(4) as an Australian citizen, an Australian protected person or a person resident in Australia. However, s 184(1)(c) allows for the provisions of the Copyright Act to apply to persons who are citizens of another country in the same manner that they apply to persons who are Australian, by the making of regulations. Regulation 4 of the Copyright (International Protection) Regulations 1969 does what is allowed by s 184(1)(c). Schedule 1, Part 1 of the Regulations lists the United States of America as one of the countries to whose citizens the protection of the Copyright Act applies.

Similarly, Schedule 1, Part 1 of the same regulations extends the protection of the Copyright Act to citizens of Turkey.

Madgwick J then went on to examine whether the trade mark he had to consider was an artistic work. An "artistic work" is defined in section 10(1)(a) of the Copyright Act to include "a painting, sculpture or drawing, engraving or photograph, whether the work is of artistic quality or not." Although he remarked that the trade mark before him was not what he would consider "particularly artistic", he went on (paragraphs 17-22):

[T]he authorities are clear that the threshold for what is an artistic work is low and, for copyright to subsist, the work does not need to be remarkably artistic: see Karo Step Trade Mark [1977] RPC 255 per Whitford J at 273, British Northrop Ltd v Texteam Blackburn Ltd (1974) RPC 57 per Megarry J at 68-69, Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111 per Pincus J at 114.

The next requirement for copyright to subsist in an artistic work is that the mark must be original. The concept of originality is also not a particularly rigorous one. What is required is that the creator of the work should not have copied it from some other work: see University of London Press Ltd v University Tutorial Press Ltd (1916) 2 Ch 601 at 608-610, and Victoria Park Racing & Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 per Dixon J at 511.

Although, in contested copyright cases in this court, whether or not a device such as the applicant's mark is in fact an artistic work and original could be debated, this is not such a case ... Accordingly, I am prepared to accept that the applicant's trade mark is an artistic work and is original for the purposes of the Copyright Act and that, therefore, copyright subsists in the applicant's trade mark.

Section 36 of the Copyright Act provides that the copyright in an artistic work is infringed if a person, who is not the owner of the copyright, does any act comprised in the copyright without the licence of the owner. Section 14 deems acts done in relation to a substantial part of the work to be done in relation to the whole of the work. Section 31(1)(b) provides that copyright in an artistic work gives the owner the exclusive right, amongst other things, to reproduce the work in a material form (subs(i)) and to publish the work (subs (ii)).

Accordingly, based on the evidence before the Court, in my opinion, use by the respondent of its trade mark would be contrary to the Copyright Act and accordingly contrary to law. Therefore, the ground for opposing the registration of a trade mark provided for by s 42(b) is made out by the applicant. It should however be noted, that this is but the expression of opinion upon a hypothesis and does not amount to a finding of any actual breach of the Copyright Act by the respondent.

Following the path cut by Justice Madgwick through the Copyright Act, I accept that the opponent's fire extinguisher device in this case is also an artistic work, in terms of that Act, that it is original, and that the copyright resides with the opponent, which commissioned its design. The applicant has put forward no evidence to refute any of the opponent's claims in this matter. In my opinion, as a reproduction of the opponent's device comprises the major part of the applicant's trade mark, use of that mark would be contrary to the Copyright Act. In coming to this "expression of opinion upon a hypothesis" about a supposed breach of the Copyright Act, it follows that I should find that the applicant's trade mark should be refused under subsection 42(b) of the Trade Marks Act because its use would be contrary to law. The opponent has therefore been successful under section 42.

I have already found the section 42 ground proven. However, Mr Kirov also raised additional arguments in terms of section 42 regarding whether use of the applicant's trade mark would also be in breach of section 52 of the Trade Practices Act.

Section 52 of the Trade Practices Act deals with misleading or deceptive conduct by corporations. It provides:

(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

While there are some exceptions to the requirement that the offending party be a corporation, none of those exceptions has been raised by Mr Kirov. On the face of it, conduct by the applicants, who are individuals, would not fall within the scope of section 52. However, even if their conduct could fall within the scope of that section, D R Shanahan, in Australian Law of Trade Marks and Passing Off, 1990, at page 456, says, "Misleading conduct does not merely cause confusion; it actually directs a person towards the wrong choice". Unlike the issue of copyright, which was referred to in the opponent's declaration, I have no supporting evidence of any kind before me relating to the applicants' engagement or likely engagement in misleading or deceptive conduct. I have only Mr Kirov's hearing submissions to consider. In light of this, and continuing to follow the lead of Madgwick J in this matter, I decline to pursue any further the superfluous question of a possible breach of the Trade Practices Act that might also invoke the section 42 opposition ground.

Section 58 - ownership of the trade mark

Section 58 of the Act provides:

The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

Note:    For applicant see section 6.

Submissions

Mr Kirov submitted that the opponent's evidence demonstrated that it had used a trade mark substantially identical to the applicant's mark as early as 1997. That is, well prior to the filing date, 31 March 1999, of application no. 789859. The use was on goods identical to, or the same kind of thing as the goods covered by the subject application. He argued that, for the purposes of the proprietorship question, the "beer" covered in that application should be viewed as the same kind of thing as the opponent's non-alcoholic and carbonated beverages. In support of this argument, Mr Kirov cited Application by Karachi Aerosol Co Ltd (1985) 6 IPR 33, where the risk of confusion between use of the same trade mark on "air fresheners, disinfectants, deodorants insecticides, bactericides, germicides" and "by products of citrus fruits" was found to be almost unavoidable. Further, said Mr Kirov, in that case "the opposition was successful given the Opponent had raised a substantial case for the Applicant to answer and the Applicant had raised no attempt to respond."

Discussion

To succeed under section 58, the opponent must demonstrate, via its evidence, that it has had use in Australia, prior to the filing date of the applicant's trade mark, of the same or of a substantially identical trade mark, for the same goods. The threshold test for ownership under section 58 is substantial identity between the trade marks. In Trade Mark Law in Australia, (2000) Elkington, Hall and Kell say of ownership disputes, at page 77:

The battle therefore is between the party who was first to file and an opponent who claims to have been first to use. In such cases the first user prevails. But this ground of opposition is tightly confined. The use must have been commercial use, as a trade mark, of the very mark applied for or one extremely close to it, and for the goods or services of application or "the same type of thing".

So, applying the relevant test set out in Shell Co. (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407, I must first decide whether the trade mark used by the opponent is substantially identical to the trade mark subject of the current application. The test in question is put by Windeyer J (at page 414) in this way:

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.

The opponent's labels (reproduced above) show that prior to the relevant date, the opponent used the word ULUDAG and the circular SONDUR ATESINI and fire extinguisher device on its packaging in combination with other material that does not appear in the applicant's trade mark. However, in comparing the essential features of both trade marks it is clear to me that "in a real sense a claim to proprietorship of the one extends to the other." (Carnival Cruise Lines Inc v Sitmar Cruises Ltd, 31 IPR 375, at page 391. See also the recent decision of a delegate of the Registrar in New Tel Communications Pty Ltd v New Tel Limited (formerly Transom International Limited) [2002] ATMO 48 (31 May 2002).)

The opponent's success under section 58 also depends on being able to demonstrate commercial use of its trade mark, prior to the filing date of the opposed application, on the goods or services of the application, or "the same kind of thing" (Re Hicks' Trade Mark (1897) 22 VLR 636). The evidence before me demonstrates that the opponent has indeed made such use of its trade mark, at least in respect of non-alcoholic and carbonated beverages. While these are clearly the same kind of thing as most of the goods specified in the subject trade mark application, "beer", being an alcoholic beverage, is not so easily caught by that description.

Mr Kirov's arguments under section 58 were brief, and essentially came down to his earliest statements that the Registrar should not act as an advocate for the applicant, and that any doubt in relation to deception and confusion between trade marks should be resolved against it. I do not find this entirely satisfactory. The cases he quoted in support of these arguments were decided under the Trade Marks Act 1955. Under that Act, the applicant for registration bore the onus, both under 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), cites (at 66,320) two of the same cases relied on by Mr Kirov as specific examples of the situation under the old Act, now reversed:

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.)

Notwithstanding the above, because of my finding in relation to the section 42 issue, it is a moot point whether I decide that the opponent has succeeded in relation to the ownership ground in relation to most, or all, the goods covered by the opposed application. There would be no benefit to the applicant of my differentiating the goods in such a way, as the opposition has succeeded against the whole application on the section 42 ground. Accordingly, I simply find here that the opposition has also been successful on the section 58 ground.

Section 60 - trade mark with a reputation in Australia

Section 60 provides:

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.

Note 1:        For deceptively similar see section 10.

Note 2:        For priority date see section 12.

Submissions

Mr Kirov submitted that the opponent's evidence clearly showed its considerable use of its ULUDAG, SONDUR ATESINI and fire extinguisher device trade marks, both in Australia and throughout the world prior to the date of filing of the applicants' trade mark. He reminded me that the opponent's ULUDAG trade mark has been registered in a wide range of countries since 1982, and that sales of soft drink under its trade marks in this country prior to the date of filing of the applicant's trade mark were substantial and increasing. Mr Kirov argued that I should assess the opponent's reputation as proven, by taking into account:

• the relatively low cost of non-alcoholic and carbonated beverages,

• the nature and habits of the typical consumer of such goods, and

• the strong possibility that many might be of Turkish birth or descent with knowledge of the brand from its long use overseas.

Discussion

I accept Mr Kirov's arguments upon the issue of the opponent's reputation. The sales figures for its use of its trade marks in this country are significant, particularly when you take into account the fact that the opponent does not advertise its goods, but relies upon consumers' recognition of the trade marks at the point of sale. I have no doubt that the success of this selling strategy must depend, at least in part, on the recognition by members of the Turkish community in Australia of a "tried and true" trade mark with a relatively long history in their country of origin. I have already found that the trade marks used together by the opponent prior to the filing date of the applicants' trade mark are not only deceptively similar, but substantially identical to that composite trade mark, such that ownership resides with the opponent. It therefore follows that, as at the date of filing the applicant's trade mark, deception and confusion of a significant number of people would certainly result from use of that trade mark for the goods specified in that application, in the face of the opponent's trade mark. Accordingly, I find the opposition has been successful on the section 60 ground.

Decision

Section 55 of the Act provides:

Unless the proceedings are discontinued or dismissed, 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.

I have found the opposition to be successful on all the grounds canvassed at the hearing. Therefore, subject to any appeal from my decision, I refuse to register trade mark application number 789859.

Costs

The successful opponent has sought and is entitled to its costs in this matter. Accordingly, I award costs, according to the official scale, against the unsuccessful trade mark applicants, Michael Rainbow and Yasar Yuksel.

Claudia Murray

Hearing Officer

Trade Marks Hearings

20 September 2002