Geneva Marketing Pty Ltd v Johnson & Johnson, a New Jersey Corporation

[2011] ATMO 19

TRADE MARKS ACT 1995

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

Re:Opposition by Geneva Marketing Pty Ltd to registration of trade mark application 1180427(3, 5) - K-Y SENSUAL SILK - filed in the name of Johnson & Johnson, A New Jersey Corporation.

Delegate:

Claudia Murray

Representation:

Opponent Ms Julia Baird, Senior Counsel, instructed by Ms Jane Owen of Middletons, Sydney.

Applicant: Mr Sean McManis, assisted by Ms Michelle Cooper, of Shelston IP, Sydney.

Decision:

2011 ATMO 19

Section 52 opposition – section 60 ground established – because of reputation in opponent’s trade mark, use of applicant’s trade mark likely to deceive or cause confusion - registration refused – costs awarded against applicant.

Background

1.     Johnson & Johnson, A New Jersey Corporation (‘the applicant’) filed trade mark application number 1180427 on 5 June 2007 to register, as a trade mark, the plain words:

K-Y SENSUAL SILK

2.     The application was filed in respect of ‘Massage oils and personal lubricants’ in classes 3 and 5 of the International (Nice) Classification of Goods and Services.

3.     No grounds for rejection under the Trade Marks Act 1995 (‘the Act’) were raised against the application during examination. It was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 4 October 2007.

4.     On 20 November 2007, Geneva Marketing Pty Ltd (‘the opponent’) filed notice of opposition to registration of the trade mark. Eight grounds of opposition were listed in the notice.

5.     Evidence in support, answer and reply was duly served and filed, followed by a round of further evidence and response to further evidence. I heard the matter, as a delegate of the Registrar of Trade Marks, on 17 November 2010. Ms Julia Baird, Senior Counsel, instructed by Ms Jane Owen of Middletons, Sydney, represented the opponent. Mr Sean McManis, accompanied by Ms Michelle Cooper, both of Shelston IP, Sydney, represented the applicant.

Evidence

6.     The evidence in relation to this opposition comprises:

Evidence in Support

ØStatutory declaration of Angela Winifred Dale, with Exhibits AWD-1 to AWD-11, dated 13 March 2008.

Evidence in Answer

ØStatutory declaration of Michelle Allison Anita Cooper, with Exhibits MAAC-1 and MAAC-2, dated 15 January 2009.

ØStatutory declaration of Anne Christine Brown, with Exhibits ACB-1 to ACB-5, dated 13 March 2009.

ØStatutory declaration of Michelle Allison Anita Cooper, with Exhibits MAAC-3 to MAAC-5, dated 16 March 2009.

ØStatutory declaration of Anne Christine Brown, with Exhibits ACB-1 to ACB-14, dated 26 March 2009.

Evidence in Reply

ØStatutory declaration of Jane Margaret Frances Owen, with Exhibit JMFO-1, dated 21 December 2009.

Further Evidence (Opponent)

ØStatutory declaration of Jane Margaret Frances Owen, with Exhibits JMFO-3 to JMFO-6, dated 4 May 2010.

Response to Further Evidence (Applicant)

ØStatutory declaration of Michelle Allison Anita Cooper, with Exhibit MAAC-6, dated 15 July 2010.

ØStatutory declaration of Michelle Anne Forster with Exhibit MAF-1, dated 19 July 2010.

7.     The evidence shows that the applicant and the opponent both manufacture personal lubricant products. These products are sold in selected supermarkets, pharmacies, health food stores and adult shops. Ms Dale attests in her declaration that ‘SYLK’ branded personal lubricants were first sold in Australia by the opponent from about 2 May 1995. She also attests to a wide range of marketing and promotion throughout Australia of the product under the trade mark SYLK, including through print media, websites, shelf displays, sampling and through health and medical related conferences. Sales of this product, which is quite specialized and of small unit cost, were estimated at $1,000,000 in 2008.[1]

[1] Statutory declaration of Angela Winifred Dale dated 13 March 2008, paras 1-22.

8.     Ms Brown’s declaration describes the US applicant as ‘one of the world’s largest pharmaceutical companies’. Amongst many health care products the company offers for sale in Australia are personal lubricant products currently marketed as ‘K-Y’ brand jelly and warming liquid. Ms Brown explains a little of the history of the applicant’s choice of ‘K-Y SENSUAL SILK’ as the prospective new name for a product it decided to re-brand in 2004. That product was previously sold as ‘K-Y ULTRA GEL’ in this country and elsewhere. The newly-named ‘K-Y SENSUAL SILK’ personal lubricant product has been sold continuously in New Zealand since 2007, but the trade mark has remained unused in Australia to date.[2]

[2] Statutory declaration of Anne Christine Brown dated 13 March 2009, paras 4-17; Statutory declaration of Michelle Anne Forster dated 19 July 2010, paras 8 and 13.

Grounds of opposition

9.     In its summary of submissions provided prior to the hearing, the opponent indicated that the grounds of opposition to be pursued were those under sections 44, 59, 60 and 62A. For completeness, I note that none of the other grounds listed in the notice of opposition have been made out. An opponent’s success in relation to a single ground of opposition usually renders unnecessary any further consideration of other grounds although, of course, those grounds would still be available to an opponent in the event of an appeal from a delegate’s decision. I propose to confine my deliberations here to the opponent’s ground of opposition under section 60.

Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

10.   The provisions of section 60 read[3]:

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.

[3] The subject trade mark application was filed after a significant amendment to section 60 came into force on 23 October 2006. Accordingly, the post amendment version of the section applies.

11.   To satisfy section 60, the opponent must demonstrate that, at the time of filing the opposed application (5 June 2007), there existed a reputation in another trade mark, such that use of the opposed trade mark for the goods covered by the application would likely cause a substantial or significant number of the public to be deceived or confused. The trade mark relied upon need not be subject of an application or registration in order to be relevant in terms of this section. Section 60 does not require the trade mark relied upon to be ‘deceptively similar’[4] to the opposed trade mark or that it has been used on similar goods or closely related services. Instead, the focus of the provision is squarely upon of deception or confusion of the public generated by the applicant’s proposed use of the trade mark in the face of the reputation of the trade mark(s) relied upon by an opponent. The reputation of a trade mark may develop in a variety of ways, and be influenced by the particular trading environment in which it has evolved.[5]

[4] As defined in section 10 of the Act.

[5] McCormick & Co v Mary McCormick (2001) 51 IPR 102, at 129.

12.   Ms Baird indicated that the opponent relied for the purposes of section 60 upon the opponent’s trade mark for the word ‘SYLK’. The trade mark had been used in Australia since 1995, and was the subject of the following trade mark registrations:

TM No.	Trade Mark	Filing Date	Class/Goods
985256	15 January 2004	5: Personal lubricant (natural)
1167035	(Series of trade marks)	20 March 2007	5: Personal lubricants

13.   I mention in passing that these trade marks were also relied upon by the opponent in relation to section 44, and Ms Baird argued under that section that the applicant’s trade mark was deceptively similar to them according to the accepted tests.[6] Ms Baird submitted that the applicant’s trade mark encompasses the whole of the SYLK trade mark and that its meaning remains intact in the applicant’s trade mark. To fully accept this premise, however, is to perhaps diminish what I find to be the very striking inclusion of the letter ‘Y’ in the opponent’s trade mark. In the event, section 60, as it is now framed, does not require me to make a conclusive finding upon this matter. Rather, I must consider whether I believe that the opponent has built a sufficient reputation in its trade mark, in what is undeniably a very specialized product field, such that the entry of the applicant’s trade mark into that same field would be likely to cause deception or confusion amongst customers.

[6] Australian Woollen Mills Ltd v F.S.Walton & Co Ltd, (1937) 58 CLR 641 at 658.

14.   Upon this point, Ms Baird submitted:

The Opponent’s evidence is that the [SYLK trade mark] has been used in Australia for approximately 15 years and that sales over that time have been significant… The length of time in which the [SYLK trade mark] has been in use in Australia, the extent of sales (approximately $1 million in 2008) and the regular and widespread promotion of the Opponent’s product under the [SYLK trade mark] attested to by Ms Dale, all establish that the [SYLK trade mark] before the Application Date in respect of personal lubricants had acquired a reputation in Australia, satisfying s 60(a) of the Act.

The applicable principles remain as set out in Southern Cross Refrigerating Co. v Toowoomba Foundry Pty Limited (1954) 91 CLR 592 per Kitto J at 594-5; save that the Opponent bears the onus:

(a) it is not necessary in order to find that a trade mark offends against the section to prove that there is an actual probability of deception leading to a passing off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of its occurring... it is sufficient if the result of the user of the mark will be that a 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;

(b) in considering the probability of deception, all the surrounding circumstances have to be taken into consideration;

(c) the rights of the parties are to be determined as at the date of the application; and

(d) the test is what the Applicant can do if it obtains registration.

The Opponent submits that because of the reputation of SYLK, the use of the [opposed trade mark] would be likely to deceive or cause confusion. As was observed in Berlei Hestia Industries Ltd v The Bali Company Inc (1973) 129 CLR 353, the question whether a mark is likely to confuse is not limited to whether there has been actual confusion in the use of the mark. The question is whether its use is likely to confuse. In the present case, the use of the distinctive word SILK in the [opposed trade mark] is such that its use would be likely to deceive or cause confusion in the face of the longstanding use and ensuing reputation of the [SYLK trade mark] in respect of the relevant goods.

The inclusion of the house mark K-Y in the [opposed trade mark] does not avoid a likelihood of deception or confusion. Rather, the use of the house mark merely suggests that this use of the phonetically similar mark SILK/SYLK is licensed to the user of the house mark K-Y, or that the owner of the [SYLK trade mark] is now associated with K-Y or the owner/user of the mark K-Y.

Further, the risk of deception or confusion is significantly heightened by the personal nature of the relevant goods. Should there be any possibility of embarrassment or public expression of the intimate circumstances in which the relevant goods are likely to be used, it is reasonable that the customer’s analysis of the depiction of the trade marks is unlikely to be extensive. Thus, in the face of the reputation of the [SYLK trade mark], the use of the [opposed trade mark] is likely to suggest an association or a licensing that does not exist. Any separate reputation accruing to K-Y is likely to reinforce the deception of association/licensing.

15.   Mr McManis made detailed submissions in response. Concluding his arguments, he said:

The Applicant submits that the ground of opposition based on s60 has not been made out. A sufficient reputation in the mark SYLK in Australia has not been established. A likelihood of deception or confusion with the notional use of the trade mark K-Y SENSUAL SILK has not been established. Further, we note that actual use of a particular form of the trade mark K-Y SENSUAL SILK, being a form that is likely to have emphasised SILK more than what is likely to be used on Australia (as seen in the latest draft packaging annexed to the Forster Declaration as Confidential Exhibit MAF-1) in a similar, neighbouring market with similar market conditions to Australia was considered in related New Zealand proceedings and was found not likely to result in confusion.

16.   The ‘related New Zealand proceedings’ to which Mr McManis referred dealt with unsuccessful infringement, invalidity and revocation actions taken by Geneva Marketing (1998) Limited against the applicant in the High Court of New Zealand[7] and subsequently appealed to its Court of Appeal.[8] As Ms Baird pointed out, there are many points of divergence between the circumstances of those cases and that to be decided here. However, there are also some relevant points to be considered, including that the judges apparently had before them the trade mark, as depicted below, which was actually in use at the time in New Zealand:[9]

[7] Geneva Marketing (1998) Ltd v Johnson & Johnson and others HC AK CIV 2007-404-2431 [2008] NZHC 1546 (2 October 2008)

[8] Geneva Marketing (1998) Limited v Johnson & Johnson and others [2009] NZCA 591 (18 December 2009)

[9] Statutory declaration of Jane Margaret Frances Owen dated 4 May 2010, Exhibit JMFO-5.

17.   The opponent has directed a significant part of its energies during these opposition proceedings towards trying to establish whether it is the applicant’s intention to also launch its product in Australia using the above trade mark. These efforts have proved fruitless, as while the applicant’s representative has attested that it definitely intends to use the trade mark in Australia, the final decisions on product packaging and ‘the specific graphical representation of the trade mark K-Y SENSUAL SILK have not yet been made’.[10] It is relevant to note the comparisons made by the New Zealand Appeals Court judges between the opponent’s SYLK trade mark and the trade mark, shown in paragraph 16 above, as actually used by the applicant in New Zealand. Given the evidence before me, it appears a similar usage by the applicant in Australia is at the very least a strong possibility and would be encompassed, I believe, by the plain words representation applied for here. They said:

Does use of the sign Silk when used as part of the K-Y Sensual Silk trade mark have a tendency to deceive or confuse?

The issue is far from easy. Indeed we see it as closely balanced.

…

Sylk and Silk are visually very similar and aurally identical. And, contrary to what the [Primary] Judge indicated…we think that they represent the same idea. That this is so is illustrated by the fact that the packaging of the competing products both contain the words silky smooth (albeit that this also indicates the obviousness of that underlying idea). Although the word Silk is almost always displayed with the remainder of Johnson & Johnson’s registered trade mark, its font-size is larger than that of the other words. As well, it does not always appear as part of a continuous phrase.

…

Allowing for imperfect customer recollection and the reality that not all consumers will be repeat purchasers, confusion on the part of at least some customers is inevitable, at least to some degree. The real question is whether the extent of the confusion (in terms of the number of customers likely to be confused) is sufficiently significant to engage the relevant statutory provisions.[11]

[10] Statutory declaration of Michelle Anne Forster dated 19 July 2010, para 13.

[11] Geneva Marketing (1998) limited v Johnson & Johnson and others [2009] op. cit., paras 29-33.

18.   While the New Zealand courts may have answered that question in the negative in relation to the relevant statutory provisions dealing with infringement, invalidity and revocation across the Tasman, the opponent has persuaded me that the answer in this jurisdiction is in the affirmative. There is a real, tangible danger that, if faced with the applicant’s trade mark in use on massage oils and personal lubricants, many previous customers familiar with the opponent’s well-established, long-used trade mark for identical or similar goods would very likely be caused to wonder whether there was a connection of some kind between the two. This conclusion is sufficient for the opponent’s success under section 60.

Decision

19. Subsection 55(1) of the Act provides:

(1)      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.

20.   The onus is upon an opponent to establish one or more grounds of opposition, according to the balance of probabilities.[12] The opponent has succeeded in relation to the ground it pressed under section 60. I therefore refuse to register trade mark application 1180427.

[12] Pfizer Products Inc v Karam (2006) 70 IPR 599; Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 82 IPR 13 (at [22] to [26]).

Costs

21. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs, according to the official scale set out in Schedule 8 of the Trade Marks Regulations 1995, against the unsuccessful trade mark applicant, Johnson & Johnson.

Claudia Murray

Hearing Officer

Trade Marks Hearings

28 February 2011