Federation of the Swiss Watch Industry FH v K-Swiss Inc [Sec=Unclassified]
[2009] ATMO 78
•7 October 2009
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Federation of the Swiss Watch Industry FH to registration of trade mark application 1129268(14) – K SWISS AND DEVICE - filed in the name of K-Swiss Inc.
Delegate:
Frances Aarnio
Representation:
Opponent: Caroline Baker of Freehills, Melbourne
Applicant: Ross McLean of Baker McKenzie, Sydney
Decision:
2009 ATMO 78
Section 52 opposition: s42(b), s43 and s61 grounds pursued – s43 and s61 grounds established – application can proceed with condition of registration – costs awarded against applicant.
Background
1. On 14 August 2006 K-Swiss Inc (‘the applicant’) applied under the Trade Marks Act 1995 (‘the Act’) to register the following trade mark:
Trade Mark No: 1129268
Applicant: K-Swiss Inc
Priority date: 14 August 2006
Goods: Horological and chronometric instruments; watches
Trade mark:
2. The application was examined, and on 14 December 2006, advertised as accepted for possible registration in the Australian Official Journal of Trade Marks.
3. On 22 February 2007 Federation of the Swiss Watch Industry FH (‘the opponent’) opposed registration of the trade mark, listing 16 grounds of opposition.
4. The matter came before me as a delegate of the Registrar of Trade Marks in Canberra on 21 April 2009. Caroline Baker of Freehills, Melbourne, represented the opponent by video conference and telephone; Ross McLean of Baker & McKenzie, Sydney, appeared in person for the applicant.
5. At the hearing, the opponent pursued only grounds under s 42(b), s 43 and s 61 of the Act.
6. The opponent has the onus of establishing a ground of opposition on the balance of probabilities.[1]
Evidence
Evidence in support
[1] Pfizer Products Inc v Karma [2006] FCA 1663 (‘Pfizer’).
The opponent’s Evidence in Support consists of two statutory declarations. The first declaration is that of Yves Bugmann dated 15 May 2007, with Exhibits YB1 to YB8. Mr Bugmann is Head of the Legal Department of the opponent, a trade association representing 90 per cent of Swiss watch manufacturers. He attests to Switzerland’s long association with quality watchmaking, the need for stringent controls around use of the term “Swiss” which has become a marker of quality in the industry, and the opponent’s mission to ensure Swiss denominations are used appropriately in connection with watches. Mr Bugmann also declares his belief that use of the opposed trade mark in relation to watches, horological and chronometric instruments is likely to mislead and confuse consumers who rely on the word “Swiss” as a marker of quality. Annexed to Mr Bugmann’s declaration are:
Øextracts from Swiss federal law governing the use of the word “Swiss” in relation to watches;
Ømaterial relating to the opponent’s trade investigations, including an investigation the opponent made into the applicant;
Ødetails of the opponent’s certification marks registered in the United States and Hong Kong for the words “Swiss” and “Swiss made”; and
Øcopies of registrations of the opposed trade mark in other jurisdictions, where the applicant has restricted its class 14 claim to goods of Swiss origin.
The second statutory declaration is that of Caroline Alexandra Baker dated 22 August 2007, with Exhibit CAB-1. Ms Baker is a solicitor employed by Freehills Patent and Trade Mark Attorneys. Her declaration brings into evidence the Trade Marks Office file relating to trade mark application 1129268, the opposed trade mark.
Evidence in answer
The applicant’s Evidence in Answer is the declaration of Steven Nichols dated 7 April 2008, with Annexures SN1 to SN16. Mr Nichols is Chief Executive Officer and President of the applicant, a position he has held since 1986. He declares that, because of the extensive use and reputation of the applicant’s trade mark throughout the world, members of the buying public would view the opposed trade mark as an indicator of the applicant company. In support, he provides brief details of:
· the origin of the K-SWISS mark;
·the worldwide reputation of the applicant,
·the applicant’s trade mark registrations in Australia and overseas;
·use of the K-SWISS trade mark in relation to watches, and
·use and promotion of the K-SWISS trade mark in Australia.
Evidence in reply
In reply, the opponent filed and served a second declaration of Yves Bugmann dated 14 July 2008. Commenting on the evidence in answer, Mr Bugmann provides details of an invalidity action filed by the opponent against the applicant’s European Community registration. He also outlines an incident which took place at Baselworld 2008, where, following the opponent’s complaint to that fair’s arbitrating panel, an exhibitor was required to withdraw from display all watches bearing the K-SWISS trade mark.
Further evidence
Further evidence was filed and served by the applicant. That evidence consisted of the declaration of Alf Mons Anderson dated 24 September 2008. Mr Anderson is a lawyer at Pretor Advokat AS, a law firm which is based in Norway and which acts on behalf of the applicant in relation to its European trade mark matters. Mr Anderson comments on the incident at Baselworld 2008, membership of the fair’s arbitrating panel, the panel’s relationship with the opponent, and the limitation of the panel’s authority.
Grounds of opposition
12. At the hearing, both parties referred to Verbrand Bayerischer Ausfuhrbrauerein Eingetragene Verein v Bavaria NV[2], a decision of the Registrar that was at the time on appeal before the Federal Court. Shortly after the opposition hearing, Bennett J issued her decision in the appeal case (see Bavaria NV v Bayerischer Brauerbund eV[3]). To give the parties an opportunity to address the findings of Bennett J as they may have related to the current opposition, I allowed the parties time after the hearing to make written submissions. Both parties provided additional submissions and I will refer to them, as well as the submissions they made at the hearing, as they are relevant.
[2] [2006] ATMO 53.
[3] [2009] FCA 428 (‘Bavaria NV’).
13. In its arguments, the opponent contended that the opposed trade mark should either be refused, or restricted to cover “timepieces of Swiss origin”.
Section 43
14. Section 43 reads:
Trade mark likely to deceive or cause confusion
An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.
15. The operation of this section of the Act has been considered in cases such as Pfizer[4] and more recently Bavaria NV[5]. In Pfizer, Gyles J said:
“Connotation” is a secondary meaning implied by the mark. The likelihood of deception or confusion must flow from the secondary meaning inherent in the mark itself. It is apparent that the underlying purpose of s 43 is a similar purpose to that lying behind ss 52, 53 and 55 of the Trade Practices Act 1974 (Cth). It is to prevent the public being deceived or confused as to the nature of the goods offered by reason of a secondary meaning connoted by the mark in question, rather than, for example, deception by reason of similarity with other marks (TGI Friday’s Australia Pty Ltd v TGI Friday’s Inc (2000) 100 FCR 358 at [43], McCorquodale v Masterton[6] at [25] - [26].
[4] [2006] FCA 163.
[5] [2009] FCA 428.
[6] [2004] FCA 1247.
16. To be successful under this ground of opposition, the opponent must establish, not only that the trade mark, or a sign contained in the trade mark, has a connotation, but also that, because of that connotation, the use of the trade mark in relation to the claimed goods will be likely to deceive or cause confusion.
17. The trade mark must be considered as a whole, but taking account of the impact of the various elements of the trade mark, including their relative size and prominence within the mark (See BavariaNV at [21] – [22]).
18. In Registrar of Trade Marks v Woolworths Limited [1999] FCA 1020) French J considered the application of criteria under the Trade Marks Act 1995 where an underlying policy is a presumption of registrability. He considered the case law on deception and confusion under earlier statutes can still be relied on, provided the change in law as to onus is borne in mind.
19. In considering whether there is a likelihood of deception or confusion, all surrounding circumstances must be considered. These include the circumstances in which the mark 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. A mere possibility of deception or confusion is not sufficient. There must be a real tangible danger of deception or confusion occurring. However, it is enough if the ordinary person entertains a reasonable doubt[7].
[7] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592.
The opponent’s submissions
20. The opponent submits that the opposed mark connotes the applicant’s timepieces are of Swiss origin. This is likely to lead to deception and/or confusion in the marketplace as the applicant’s goods are not restricted. In essence its reasons are:
· The word SWISS is prominent in the trade mark, constituting 90 per cent of the words.
· The letter K has no meaning of its own and, as such, does not counteract or alter the connotation of the word SWISS within the mark.
· The shield device, being suggestive of the Swiss coat of arms, serves to reinforce the connotation of Swiss origin.
· Watches are a Swiss icon and consumers still regard the word “Swiss” as a genuine indicator of origin and quality.
· The applicant’s reputation is at best limited to sports shoes. It has no reputation in Australia for timepieces. As was found by Assistant Commissioner Walden when deciding a similar case between the parties in New Zealand[8], a substantial number of the purchasing public will not be aware of the applicant. Because of the prominence of the SWISS element in the mark, they will be deceived or confused into thinking the applicant’s timepieces are of Swiss origin and have the characteristics of such goods.
The applicant’s submissions
[8] K-Swiss Inc v Federation of the Swiss Watch Industry FH [2008] NZIPOTM 37.
21. The applicant disagrees. Its arguments may be summarised as:
· The word element in the applicant’s mark is K-SWISS, and this, combined with the shield device, does not connote that the goods are from Switzerland or have the characteristics of a Swiss watch.
· The word SWISS is not differentiated or prominent in the opposed trade mark, but exists as part of the invented sign, K-SWISS. The element K- is critical to the way the mark would be perceived and remembered by consumers. As was the case in Bavaria NV, the additional elements in the opposed mark negate any geographical significance of the part word SWISS.
· The opponent has not provided any evidence to establish that in the context of the opposed trade mark the reference to Swiss will be seen as conveying an origin statement, or that the word Swiss has a reputation for watches among Australians. The reference to Swiss in the invented sign K-SWISS could suggest a link to Swiss people or Swiss heritage.
· The word element, K-SWISS is an invented sign. When invented signs appear in composite marks, they are generally seen as brand names. K-SWISS is a well-known brand of shoes, and those with knowledge of the applicant are unlikely to be confused.
Discussion
22. Having considered the opposed trade mark as a whole, I am satisfied that it connotes that the applicant’s goods are of Swiss origin or have the characteristics of Swiss timepieces.
23. The word SWISS is the element of the mark that immediately strikes the eye and the element of the mark that is likely to be taken away and remembered. SWISS is an English word in common parlance and Australians would be familiar with its use to denote geographical origin, heritage or the population of Switzerland. From my own knowledge, I am aware that Switzerland is promoted in Australia as a land of chocolate, watches, and banks. Swiss timepieces are advertised in Australian magazines and other media, often by high-profile actors or sports people. Australian consumers would, I think, be aware of Switzerland’s reputation as a producer of timepieces either through travel, study or common knowledge. The opponent has not produced evidence to show that Australian consumers would generally be aware of the exact standards for Swiss watches as set out by Swiss law. That said, however, I think consumers, being aware of Switzerland’s reputation as a producer of timepieces, are likely to have clear ideas as to the principal characteristic a Swiss timepiece is likely to possess, that of being made in Switzerland.
24. In the context of the claimed goods I am satisfied the word SWISS is likely to connote Swiss origin. I am not satisfied that the other elements in the opposed mark, namely the letter K and the shield device, are sufficient to dilute that connotation. The letter and word element may be seen by prospective buyers as a single hyphenated term, K-SWISS. But that would not necessarily be the case. The symbol appearing between the letter K and the word SWISS is not clearly a hyphen, but could just as easily be seen as a dot or point. In any event, the word SWISS appears as the dominant element.
25. The applicant has provided evidence that it has a reputation in Australia in relation to sports shoes and clothing. That evidence, however, is not sufficient to show that the applicant, or any of its trade marks, is so well-known that confusion is not likely to arise if the opposed trade mark is used in relation to the timepieces claimed under the opposed trade mark.
26. I consider it is likely that a significant number of members of the buying public would be confused into thinking that, or at least be caused to wonder whether or not, the applicant’s goods were of Swiss origin.
27. The opponent has established the s 43 ground of opposition.
Section 61
28. As the opposed trade mark was accepted for possible registration after 23 October 2006, s 61 as amended by the Trade Marks Amendment Act2006 applies:
Trade mark containing or consisting of a false geographical indication
(1) The registration of a trade mark in respect of particular goods (relevant goods) may be opposed on the ground that the trade mark contains or consists of a sign that is a geographical indication for goods (designated goods) originating in:
(a) a country, or in a region or locality in a country, other than the country in which the relevant goods originated; or
(b) a region or locality in the country in which the relevant goods originated other than the region or locality in which the relevant goods originated;
if the relevant goods are similar to the designated goods or the use of a trade mark in respect of the relevant goods would be likely to deceive or cause confusion.
(2) An opposition on a ground referred to in subsection (1) fails if the applicant establishes that:
(a) the relevant goods originated in the country, region or locality identified by the geographical indication; or
(b) the sign has ceased to be used as a geographical indication for the designated goods in the country in which the designated goods originated; or
(c) the applicant, or a predecessor in title of the applicant, used the sign in good faith in respect of the relevant goods, or applied in good faith for the registration of the trade mark in respect of the relevant goods, before:
(i) 1 January 1996; or
(ii) the day on which the sign was recognized as a geographical indication for the designated goods in their country of origin;
whichever is the later; or
(d) if the registration of the trade mark is being sought in respect of wine or spirits (relevant wine or spirits)—the sign is identical with the name that, on 1 January 1995, was in the country in which the relevant wine or spirits originated, the customary name of a variety of grapes used in the production of the relevant wine or spirits.
(3) An opposition on a ground referred to in subsection (1) also fails if the applicant establishes that:
(a) although the sign is a geographical indication for the designated goods, it is also a geographical indication for the relevant goods; and
(b) the applicant has not used, and does not intend to use, the trade mark in relation to the relevant goods in a way that is likely to deceive or confuse members of the public as to the origin of the relevant goods.
Note 1: for applicant, predecessor in title and geographical indication see section 6.
Note 2: For originate (in relation to wine only) see section 15.
29. Section 6 defines geographical indication as:
geographical indication, in relation to goods originating in a particular country or in a region or locality that country, means a sign recognized in that country as a sign indicating that the goods;
(a) originated in that country, region or locality; and
(b) have a quality, reputation or other characteristic attributable to their geographical origin.
30. The opponent submits that the use of the applicant’s mark would contravene s 61 because the opposed trade mark contains the word SWISS, which is a recognized geographical indication as per the 1971 Swiss Ordinance Governing Use of the Appellation Switzerland or Swiss for Watches, which is annexed to the first Bugmann declaration at Exhibit YB-1. The designated goods are identical to those covered by the opposed trade mark (the relevant goods).
31. The applicant disputes this, arguing, in similar terms to its argument under s 43, that the sign contained in the opposed mark is K-SWISS. The sign K-SWISS is not a geographical indication.
32. However, the applicant submits, if it is found that the opposed mark contains the sign SWISS, the opposition should fail under s 61(3) as the applicant has not used, and does not intend to use, the trade mark in a way that is likely to deceive or cause confusion as to the origin of the goods.
33. As I have indicated in relation to the opposition ground under s 43, as they appear in the opposed trade mark, the letter K and the word SWISS may be seen either as a single hyphenated term, or two elements separated by a dot or point. In either case, the word SWISS appears as the dominant element. I am therefore satisfied the mark contains the word SWISS. I am also satisfied, having regard to the evidence provided by way of the first Bugmann declaration, that SWISS is a geographical indication for watches (the designated goods), which are goods identical, or similar to, horological and chronometic instruments; watches covered by the opposed trade mark (the relevant goods).
34. Under s 61(3) the opposition fails if the applicant establishes:
· That, although the sign is a geographical indication for the designated goods, it is also a geographical indication for the relevant goods; and
· that the applicant has not used, and does not intend to use, the opposed trade mark in a way that is likely to deceive or confuse members of the public as to the origin of those goods.
35. The applicant has not established that the sign, SWISS, is a geographical indication for the relevant goods. It has therefore not established a defence in terms of s 61(3).
36. On balance, I am satisfied the opponent has made out the s 61 ground of opposition.
Section 42(b)
37. Section 42(b) provides:
Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
…
(b) its use would be contrary to law.38. Here, the opponent contends that registration of the opposed mark would be contrary to ss 52 and 53 of the Trade Practices Act 1974 (Cth) (‘the TPA’).
39. Section 52 of the TPA reads:
a corporation shall not in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
40. In S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd[9] the Full Federal Court at 587-588 summarised the principles to be applied in determining whether a breach of s 52 of the TPA has occurred. I have found the opposed mark is likely to cause confusion in terms of s 43. On the material before me, however, I am unable to be satisfied that the applicant’s use of its trade mark would amount to misleading and deceptive conduct as envisaged by s 52 of the TPA.
[9] (1998) 43 IPR 581.
41. Section 53 of the TPA deals with false or misleading representations and reads:
A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:
(a) falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;
(aa) falsely represent that services are of a particular standard, quality, value or grade;
(b) falsely represent that goods are new;
(bb) falsely represent that a particular person has agreed to acquire goods or services;
(c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;
(d) represent that the corporation has a sponsorship, approval or affiliation it does not have;
(e) make a false or misleading representation with respect to the price of goods or services;
(ea) make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods;
(eb) make a false or misleading representation concerning the place of origin of goods;
(f) make a false or misleading representation concerning the need for any goods or services; or
(g) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.
42. The opponent has provided no evidence to show that the applicant has made representations that it had some affiliation, sponsorship or approval that it did not have. There is no evidence that the applicant has represented its goods as having characteristics they do not have, or that it has made false representations concerning their place of origin. I am not satisfied that the applicant has breached any of the provisions set out above.
43. The s 42(b) ground of opposition is not established.
Decision
44. Section 55 states:
Decision
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.
45. I am satisfied the opponent has established the s 43 and s 61 grounds of opposition. I am also satisfied the application may proceed to registration subject to the following endorsement as a condition of registration:
It is a condition of registration that the trade mark will only be used in accord with the Swiss Federal Council Ordinance governing use of the appellation Switzerland or Swiss for Watches.
46. I direct that, after one month from the date of this decision, the application may proceed to registration with the condition set out above. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until either the appeal has been discontinued or, otherwise, the court orders that registration proceed.
Costs
47. Both parties requested their costs. I am satisfied that the opponent has been successful. Therefore, I award costs against the applicant at the official scale.
Frances Aarnio
Hearing officer
Trade Marks Hearings
7 October 2009
7
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