FH Faulding Co Limited v Laboratoire Garnier & Cie

[2001] ATMO 2

TRADE MARKS ACT 1955

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

Re:Opposition by FH Faulding & Co Limited to registration of trade mark application 588201(3) - NEUTRALIA - filed in the name of Laboratoire Garnier & Cie.

Background

As provided for in the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act 1955 continue to govern this opposition.  Accordingly, unless otherwise specified, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.

This application was lodged by Laboratoire Garnier & Cie (Garnier) on 12 October 1992. The application claims a convention priority date of 13 April 1992, under section 109 of the Trade Marks Act 1955 which, in part, provides:

109. (1) Where a person has made an application for the registration of a trade mark in a Convention country and that person, or his legal representative or assignee, makes an application for the registration of the trade mark within 6 months after the date on which the application was made in the Convention country, the trade mark shall, if registered, be registered as of the date on which the application was made in the Convention country and that date shall, subject to sub-section (3), be deemed for the purposes of this Act to be the date of registration.

The application seeks registration of the trade mark appearing below in respect of:

All preparations in this class for the maintenance, care and embellishment of the hair and scalp, the beard and the moustache, eyebrows and eyelashes, the skin and nails; shampoos, hair lacquers; hair dyes and bleaches; preparations for waving and setting hair; essential oils, cosmetics, perfumery and beauty preparations in this class; toilet water and toilet soaps, dentifrices

 

The application was, following examination, accepted for registration and advertised as such in the Australian Official Journal of Trade Marks on 25 May 1995.  On 24 November 1995, after seeking and receiving extension of time in which to do so, FH Faulding & Co Limited (Faulding) lodged Notice of Opposition to the registration of the trade mark.  On 20 June 1996, after seeking, and receiving, extensions of time in which to do so, Faulding served and lodged its evidence in support of the opposition. 

After receiving many extensions of time in which to serve and lodge in evidence in answer, Garnier has not adduced such evidence.  The issue of Garnier's tardiness was the subject of a decision of a Delegate of the Registrar on 2 August 2000 where Garnier’s request for a further extension of time was formally refused by a Delegate of the Registrar.

Subsequently, both parties have been afforded the opportunity to be heard in the substantive matters of the opposition.  The parties have not availed themselves of this opportunity.  The issue has thus come to me under section 50 of the Act to decide as a Delegate of the Registrar of Trade Marks.

The evidence consists of a statutory declaration, with attachments, by Jo Adamo who is a Marketing Manager of Faulding Healthcare, a division of Faulding.  The declaration brings to my attention trade mark 156325(3) NEUTROGENA, registered in the name of Faulding.  As the trade marks are non-identical, the evidence must be viewed in the light of sections 28(a) and section 33 of the Act: Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495.

In 1979, Faulding started use in Australia of the trade mark NEUTROGENA on a range of cleansing and moisturising products – I gather that this use was initially on products placed onto the market through pharmacies.  Since then, the use has extended to include hair-care products, body and shower products, facial moisture and ‘suncare’ products and the products have, since 1994, been placed onto the market through supermarkets as well as pharmacy outlets.

The market for these products is seen as primarily female in the age-range 16-35.  The goods are promoted as having or projecting the following qualities and attributes: purity, mildness, gentleness, naturalness, being hypo-allergenic, un-fragranced, high quality, uncomplicated and credible.

The evidence brings my attention to the decision of the UK Court of Appeal in Neutrogena Corporation v Golden Limited trading as Garnier CHANF 95/0812/B, since reported as Neutrogena Corporation and Anr v Golden Limited and Anr [1996] RPC 473. There Lord Justice Morritt, with Lords Justice Kennedy and Ward agreeing, found that the trade marks NEUTRALIA and NEUTROGENA had been confused, the confusion had been substantial and that the effect of this on the goodwill of Neutrogena Corporation had been real. The Court also observed that the name NEUTRALIA, though not self-evidently deceptive, is and was liable to be confused with NEUTROGENA.

The decision of the Court of Appeal shows that the product sold under the NEUTRALIA trade mark is hypo-allergenic and placed onto the market in containers very similar to those in which the NEUTROGENA products are placed onto the market.

Faulding have also put into evidence examples of the packaging of their goods sold under the trade mark NEUTROGENICS.

I am conscious that the applicant has not answered the evidence that I have briefly discussed above and therefore does not, apparently, cavil with it.  As the Chief Assistant Registrar observed in Camelot Design Industries Group Pty Ltd v Bernard Leser Publications Pty Ltd (1987) 9 IPR 596, at page 598:

By not responding in any way to the opposition proceedings the applicant renders its application more susceptible to refusal, since it is not appropriate that the Registrar act as advocate on its behalf.  However, it is appropriate that I consider the opponent’s case to the extent of finding whether or not there are matters for the applicant to answer.  If there are, and the applicant has not answered them, the matter must be resolved in favour of the opponent.

I will focus in these reasons on those headings of opposition that I believe might have been argued on the evidence that I have at hand: these headings are under subsections 28(a) and 33(1).

Section 33

Inasmuch as it is relevant to these proceedings, section 33 of the Act provides:

33. (1) Subject to this Act, a trade mark is not capable of registration by a person in respect of goods if it is substantially identical with or deceptively similar to a trade mark which is registered, or is the subject of an application for registration, by another person in respect of the same goods, of goods of the same description as those goods or of services that are closely related to those goods, unless the date of registration of the first-mentioned trade mark is, or will be, earlier than the date of registration of the second-mentioned trade mark.

Given that the trade marks are non-identical; that the goods are, in essence, the same goods; and, that the date of the registration of the registration on which Faulding relies is earlier than that would be of this application, what I am to decide here is whether the trade marks are deceptively similar.

The words ‘deceptively similar’ are defined within section 6 of the Act as meaning:

(3) For the purposes of this Act, a trade mark shall be deemed to be deceptively similar to another trade mark if it so nearly resembles that other trade mark as to be likely to deceive or cause confusion.

The issue is one under the superseded Trade Marks Act 1955 which differs from the current Trade Marks Act 1995 in that the onus is here on the applicant to show that the use of the proposed trade mark will not confuse or deceive.  In the words of French J in Registrar of Trade Marks v Woolworths [1999] FCA 1020 at para 2:

In this regard there has been an important change in the law in that the onus is no longer, as it used to be, on an applicant to establish registrability of the proposed mark.

As this matter continues under the superseded Act, I am to decide this matter according to what the law was.  The applicant is in petitorio and if there is a reasonable likelihood of the public being deceived by the registration and use of his proposed mark, the application should be refused: Eno v Dunn (1890) 15 AC 252.

Concerning deceptive similarity, in Australian Woollen Mills v. F.S. Walton & Co. Ltd (1937) 58 CLR 641 at 658, in a joint judgement, Dixon and McTiernan JJ stated:

In deciding this question, the marks ought not, of course, to be compared side by side.  An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought.  The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same.  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, their similarities both of sound and of meaning may play an important part.  The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.  Potential buyers of goods are not to be credited with any high perception or habitual caution.  On the other hand, exceptional carelessness or stupidity may be disregarded.  The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard.  Evidence of actual cases of deception, if forthcoming, is of great weight.

Other matters which have to be taken into consideration were stated by Lord Parker (then Parker J) in Re Application by the Pianotist Co Ltd (1906) 1A IPR 379 at 380; 23 RPC 774 at 777), where he said:

You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion -- that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods -- then you may refuse the registration, or, rather, you must refuse the registration in that case.

Thus, the market context of the comparison is important.  People take more care in purchasing goods which are expensive than they do when purchasing goods which are cheap: - LANCER- Trade Mark Application [1987] FPC 303 [LANCER versus LANCIA for cars].  The purchase of goods in a supermarket is more hurried than in a boutique that sells clothes: see, for example, Re: Stuart Alexander And Co. (Interstate) Pty. Limited and Douwe Egberts Koninklijke Tabaksfabriek-Koffiebranderijen-Theehandel N.V. And: Blenders Pty. Limited (1981) 53 FLR 307 No. G117 of 1981 [the 'Apothecary Jars' case].

The context of the comparison is here either supermarkets or pharmacies.  Both in supermarkets and pharmacies the selection and purchase of goods is now by self-selection from shelves, usually without benefit of help from a shop assistant.  It is unlikely, then, the products could be confused because of any phonetic similarity between them which could result in a sales assistant behind a counter confusing the products sold under the trade marks: Aristoc Ltd v Rysta Ltd 1B IPR 467.

However, there were several reported instances of confusion or deception created by the commonality of the element NEUTR- in the evidence in Neutrogena Corporation v Golden Limited, above.  Some of these instances of actual deception or confusion arose when customers attempted to self-select the opponent's goods from the shelves of pharmacies and selected the wrong ones.  Other instances arose when some television viewers, seeing an objectionable advertisement featuring the trade mark NEUTRALIA, telephoned either the regulatory body to complain of the conduct of the owner of the NEUTROGENA trade mark or, indeed, phoned the owner of the NEUTROGENA trade mark, to complain of the visual content of the advertisement.  Other instances of confusion between the trade  marks were detected amongst a team of market researchers who had themselves been hired to detect instances of confusion between the trade marks. 

Some instances appear to fall into the category commonly known as contextual confusion, as in Re: John Fitton & Co Ltd's Application (1949) 66 RPC 110, at 113 where the Assistant-Comptroller observed:

With reference to the nature of the confusion alleged the evidence furnished on behalf of the Opponents by their trade declarants is directed not so much towards showing that the two marks "Jests" and "Easyjests" might themselves be confused either visually or orally, as towards establishing that confusion would result, owing to the presence of the common element "Jest" in each mark, in traders and the public being induced to believe that the two sets of goods sold under the marks emanated from one and the same trade source.

Other confusion seems to have arisen through the similarity of the first letters of the trade mark – much the same principle as referred to in London Lubricants (1920) Ltd's Appn (1925) 42 RPC 264 where Sargant LJ commented on the importance of prefixes when comparing trade marks.

There is no evidence before me that suggests that the element NEUTR is in any way common to the trade and thus that element should not be discounted or read down in the comparison: Coca Cola Co of Canada Ltd v Pepsi Cola of Canada Ltd [1942] 1 All ER 615.

I think that, when closely considered, these trade marks obviously have differences.  However, when shopping for items within supermarkets or pharmacies, the purchase is not one which is closely considered and is frequently dictated by impression.  In The Kettle Chip Company Pty Ltd v Apand Pty Ltd (1993) 46 FCR 152, Burchett J at 161 said:

In general, and more particularly in the case of an item likely to be purchased for a small price without long consideration, the comparison which must be made is between the impression of the applicant's goods retained in a customer's mind and the impression made by the sort of consideration he is likely to give to the respondent's product before purchasing it.

I think that, under the circumstances I have outlined, the purchase of the goods in question through supermarkets or pharmacies, the impression given by the trade marks is quite similar – they, on general impression, start with the letters NEUTR and end with the letter A.  They are both ‘invented’ words.  They both have the look of a Latin derivation. 

On the basis of the evidence that Faulding has led, I therefore believe that there is a reasonable chance that the trade mark NEUTRALIA will deceive or case confusion.  Garnier has not rebutted this evidence or in any way disputed it and I must therefore find that the opposition succeeds in terms of section 33(1) of the Act.

Section 28(a)

Section 28(a) of the Act provides:

Scandalous and improper marks

28. A mark-

(a) the use of which would be likely to deceive or cause confusion;

(b) the use of which would be contrary to law;

(c) which comprises or contains scandalous matter; or

(d) which would otherwise be not entitled to protection in a court of justice,

shall not be registered as a trade mark.

The legal principles relevant to the expression 'likely to deceive or cause confusion' were summarised by Heerey J in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495; at 501-2 and quoted with approval by the Full Bench in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1998) 45 IPR 393:

(i) The opponent bears the initial onus of establishing a reputation in its mark sufficient to found an objection under s 28: Arthur Fairest Ltd's Application (1951) 68 RPC 197.

(ii) However, once this onus is discharged the burden shifts to the party seeking registration: Eno v Dunn (1890) 15 App Cas 252; at 261; IB IPR 490; Jafferjee v Scarlett (1937) 57 CLR 115; at 119.

(iii) The rights of the parties are to be determined as at the date of application for registration : Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592; at 594.

(iv) The onus is on the party seeking registration to satisfy the court that there is no reasonable possibility of deception or confusion: Southern Cross (at 594-5).

(v) In order to defeat the application for registration it is not necessary for the opponent to establish that there is an actual probability of deception which will amount to a passing-off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of it occurring - it is sufficient that the result of the user of the mark will be that a substantial number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough that the ordinary person entertains a reasonable doubt: Southern Cross (at 594-5, 608); Kendall Co v Mulsyn Paint & Chemicals (1963) 109 CLR 300; at 305.

(vi) In considering the issue of deception all the surrounding circumstances must be taken into consideration. The factors to be considered include the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold and the character of the probable purchaser of the goods: Jafferjee v Scarlett (at 120).

(vii) A probability of confusion, if it is real, is sufficient even though the confusion may be unlikely to persist up to the point of, and be a factor in, inducing actual sales: Southern Cross (at 495). There may be confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived: Re Hack's Application (1941) 58 RPC 91; at 103-4.

(viii) It is not enough for the party seeking registration to negative the likelihood of confusion in relation to the actual trade carried on by the opponent at the time of the registration and to the manner in which the latter then uses his mark. The applicant must also take into account all legitimate uses which the opponent may reasonably make of his mark within the ambit of his registration: Reckitt & Colman (Australia) Ltd v Boden (1945) 70 CLR 84; at 94; Southern Cross (at 608).

(ix) The question whether the use of a mark is likely to deceive or cause confusion is in the end a question of impression and common sense; it is a "jury question" in which the judge is entitled to give effect to his or her own opinion as to the likelihood of deception or confusion: Murray Goulburn Co-operative Ltd v New South Wales Dairy Corp (1990) 24 FCR 370; at 377; 16 IPR 289.

At the convention priority date of this application, Faulding had been using the trade mark NEUTROGENA in Australia for some thirteen years and the trade mark had been quite successful.  In the year that this application was made, the sales were in the order of three million dollars and some $500,000 was spent by Faulding advertising the product sold under the trade mark.  I would conclude that Faulding has ‘discharged the initial onus of establishing a reputation in its mark sufficient to found an objection under s 28.’

The goods on which Faulding had used the trade mark at the time this application was lodged (and the convention date) were cleansing and moisturising preparations and haircare preparations.  While it is not essential in terms of sub-paragraph 28(a), that (in order for an opposition under this head to succeed), the goods be either the same, or of the same description, I have previously noted that they are.  I have also noted that the trade marks are deceptively similar.  Any potential for confusion and deception is therefore greater than it would be if there was not a nexus between the goods.

The burden thus shifts to Garnier: Eno v Dunn (1890) 15 App Cas 252; at 261; IB IPR 490; Jafferjee v Scarlett (1937) 57 CLR 115; at 119.

As Garnier have led no evidence in response, nor made any submission, they have failed to discharge the onus now on them and I must conclude that the opposition also succeeds in terms of sub-paragraph 28(a).

I therefore refuse to register application 588201, subject to any appeal from my decision.

Costs

Neither party made any submission as to costs and I make no award.

Ian Thompson
Hearing Officer

09 January 2000