George Weston Foods Ltd v Manildra Flour Mills Pty Ltd

[1999] ATMO 41

TRADE MARKS ACT 1995

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

Re:Opposition by George Weston Foods Limited to an application under s92 in the name of Manildra Flour Mills Pty Ltd for the removal of trade mark registration no. 277.

Trade mark no. 277 is registered to George Weston Foods Limited ("the opponent").

The trade mark in question is as follows:

 

and the registration is for "flour, semolina, wheaten meal and other products of cereals".

On 13.11.97, Manildra Flour Mills Pty Ltd ("the applicant") applied to remove that trade mark from the register. The grounds relied on by the applicant are that the trade mark has not been used in the terms set out in s 92 of the Trade Marks Act 1995.  These provisions will become clearer below and do not need to be quoted at this stage.

Underpinning this removal application is the belief that the applicant is aggrieved by the fact that the registration serves to block the applicant's own pending application for registration.  I will come to the details of the applicant's own application later.

George Weston Foods Limited has opposed removal of its trade mark from the register.  I will refer to that company, from this point on, as "the opponent".  As per the regulations, the opponent served a copy of its evidence in support of the opposition, consisting of a declaration by Ian Timmis, the Company Secretary, on the applicant.  The applicant then served a copy of its evidence in answer, comprising the declaration of Brett Doyle, a solicitor, on the opponent.

In due course, the opponent requested that the matter be set down for a hearing.  I conducted that hearing as a delegate of the Registrar of Trade Marks.  Brett Doyle, a solicitor, of Baker and McKenzie, appeared for the applicant and Annette Freeman, also a solicitor, of the attorney firm of Spruson and Ferguson, appeared for the opponent. 

Nature of the dispute
The Trade Marks Act 1995 has streamlined the provisions for the removal of trade marks.  The starting point is that the opponent must act to save its registration.  Under s 100, there is an onus on it, as follows:

Burden on opponent to establish use of trade mark etc.

100.(1) In any proceedings relating to an opposed application, it is for the opponent to rebut:

(a)       any allegation made under paragraph 92(4)(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:

(i)to use the trade mark in Australia; or

(ii)to authorise the use of the trade mark in Australia; or

(iii)    to assign the trade mark to a body corporate for use by the body corporate in Australia;

in relation to the goods and/or services to which the opposed application relates (relevant goods and/or services); or

(b)       any allegation made under paragraph 92(4)(a) that the trade mark has not, at any time before the period of one month ending on the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services; or
(c)       any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.

(2) For the purposes of paragraph 1(b), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time before the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:

(a)       the opponent has established that the trade mark or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services before that period;

…

(3) For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:

(a)       the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during

that period;

Submissions
In opening her submission for the opponent, Ms Freeman conceded that the removal applicant had standing as a person aggrieved and was therefore entitled to make the application under s 92. Mr Doyle, for his part, conceded that there had been use, during the relevant period, of what he said was another and substantially different trade mark, in respect of noodle flour, sold by the opponent in 25 kg bags. He also conceded that, if I found that the mark used on the opponent's packaging amounted to use of the mark as registered, the question raised about intention to use, under s 92(4) (a), ceased to matter.

The issues with which I am concerned are therefore:

• how relevant is the trade mark that has been used, on the opponent's packaging, for noodle flour

• what, if anything, is to be done about the registration for the remaining goods.

I will approach this matter using these two headings.
How relevant is the trade mark that has been used for noodle flour?
The opponent took me to evidence that shows use, on the front, sides and ends of paper flour bags, of a trade mark as follows:

 

Ms Freeman submitted that this was use of the mark as registered and also of trade marks 727085 and 276453, with which I will deal presently.  She drew my attention to the ® symbol that appears just above and to the right of the ear of each kangaroo. 

She relied on Levi v Shah [1985] RPC 371 to establish her main argument, that use of a registered trade mark with other trade marks should be sufficient to protect the registered trade mark from removal. She noted that, in the precedent case, the two marks had been used one on top of the other, the tab that was the registered mark being always printed with the word LEVI'S. In the present case, the marks were used side by side, with the kangaroo device properly marked with the symbol ®. As a practical thing, she argued, any reasonable person would see the mark applied to the opponent's flour bags as being a use of the kangaroo device. It was there, unchanged, separate and clearly visible.

She also noted that s 100 provides that the opponent has rebutted the allegation of non-use if it shows use of the mark "with additions or alterations not substantially affecting its identity".

Mr Doyle, for his part, argued that the mark as used was not the registered mark, and that the opponent was forced to rely on s 7(1).  That provision reads as follows:

Use of trade mark

7.(1) If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.

Mr Doyle argued that this meant that, first of all, the opponent must satisfy me affirmatively that the discretion in s 7(1) should be exercised in its favour.  He noted that there was a clear legislative intention that unused marks should be removed.  He noted the decision of Taylor J in Farmer & Co v Anthony Hordern & Son Ltd (1964) 111 CLR 163: "It is for the respondent in an application such as this to satisfy the Court affirmatively that some reason exists justifying the exercise of the discretion".

He noted too that the provisions of s 38(2) of the former legislation, the Trade Marks Act 1955 did not completely carry over into the new legislation.  The older provision reads, in its entirety:

Use of trade marks whether associated or otherwise
38. (1) Where, under this Act, use of a trade mark is required to be proved for any purpose, the Registrar or a prescribed court may, if and so far as he or it thinks right, accept use of an associated registered trade mark or of the trade mark with additions or alterations not substantially affecting the identity of the trade mark, as an equivalent for the use required to be proved.
(2) The use of the whole of a registered trade mark shall, for the purposes of this Act, be deemed to be also a use of any registered trade mark, being a part thereof, registered in the name of the same proprietor.

Mr Doyle argued that the omission of a provision as powerful as s 38(2) was to be taken as deliberate.

However, the discretion to which Mr Doyle has referred, while it exists under s 7(1), does not exist under s 7(4).  This reads: "use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods)".

Nor does it exist under s 100.  If the opponent has used the mark with additions or alterations that do not substantially affect its identity then under the latter provision it "is taken to have rebutted the allegation" that the mark is unused. 

In the present matter, I do not think the question of addition or alteration arises. For all that the deeming provision of s 38(2) of the 1955 act is not analogous to s 100(2)(a) and 100(3)(a) of the new act, the ultimate question is still one of fact: has the mark been used.

Mr Doyle argued that, when looked at from the business point of view, the trade marks, as registered and as appearing on the flour bag, were substantially quite different.  Use of one could not be automatically counted as use of the other.  He drew support for this from the views of an examiner of trade marks in the Trade Marks Office.  He noted the evidence about the examination of the applicant's own pending application, number 749010.  That application is for a series of trade marks, as follows:

 

The opponent has also applied for registration of a trade mark, number 727085.  For obvious reasons, it does not incorporate the ® symbol, but it is otherwise identical to the device used on the flour bags and is as follows:

 

727085:

Trade mark registrations 727085 and 277, the present mark, had both been cited by the examiner as being deceptively similar to 749010.  However, at a subsequent report, the examiner had agreed that 727085 was not an appropriate basis for an objection. 

Mr Doyle argued that it was not possible that the trade mark on the packaging amounted to a use of registration 277 if the examiner was correct.

I cannot accept this line of reasoning.  The question before me is not the one that confronts the examiner.  My question is: does what is printed on the flour bags count as use of the trade mark no 277?  For all that trade mark number 277 is, superficially at least, just a part of a larger composite mark, I can give weight to the presence, in the "composite" on the flour bags, of the two ® symbols. 

The examiner is faced with a different question: are certain trade marks, looked at as wholes, deceptively similar to the two-kangaroo device that the present applicant is seeking to register.  It may well be that, for the purpose of comparing earlier registrations with the pending application, the examiner gives quite a lot of weight to the size of the kangaroo device and to the fact that kangaroos are not particularly rare as parts of marks.  I do not need to go into such issues at all.

My conclusion is that the opponent's kangaroo device trade mark, the subject of this decision, has been used.  As Ms Freeman argued, this is simply a case where it has been used with other trade marks, much as in KELLOGGS NUTRI-GRAIN.  I appreciate Mr Doyle's argument that the position would be clear if the kangaroos on the flour bag were more widely separated from the lozenge device.  However, I think matters are still clear enough.  Nor do I say that the other parts of the device on the flour bag are necessarily going to be seen as a house mark.  The point is that, however they are seen, the kangaroo mark, registered as number 277, is in use.

In the current case, in the mark applied to the bags in question, the kangaroo is marked with the symbol ®, not just once but twice.  This can have no purpose except to put anyone who cares to look on notice that the kangaroo device is a registered trade mark.  Its positioning on the label does not in any way dilute its significance.  Both visually and aurally, it is there - a kangaroo device or an A1 device depending on how it is seen or described - albeit there are other trade marks also in use.

I note Mr Doyle's reference to the decision of Wilcox J in Woolworths Limited v Registrar of Trade Marks (1998) AIPC 91-449 at 37,679: "In comparing marks it is not legitimate to ignore a major element in one of them". However, that judgement turned on the question of deceptive similarity, not on the more factual one of the use or non-use of a particular trade mark. The latter question should, in my opinion, allow a careful examination of all of the elements in use. When that is done here, the symbol ®, carefully used for an obvious purpose, must tip the scale.

I do not think it matters to this conclusion that the lozenge shapes above and below the word KANGAROO are separately registered as a trade mark, under the number 276453.  Ms Freeman relied on this as an established fact but, as Mr Doyle noted, the terms of that registration are not in evidence.  I have ignored the existence of the registration in reaching my decision although I make no comment on the merit of Mr Doyle's argument.

Having decided that the registered trade mark has in fact been used, albeit only for noodle flour, I go on to consider the second question.

What is to be done about the registration for the remaining goods?
I have already found that the mark has been used for one line of goods covered by the registration. This means that I have found the ground relied on under s 92(4)(b) to have been established for the remaining goods. For them, the mark is unused.

This situation is dealt with by s 101, the relevant subsections being the first and third.

Determination of opposed application—general

101.(1) Subject to subsection (3) and to section 102, if:

(a)       the proceedings relating to an opposed application have not been discontinued or dismissed; and
(b)       the Registrar is satisfied that the grounds on which the application was made have been established;

the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.

…

(3) If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.

This is simply a positive statement about the existence of a discretion similar to that under s 23 of the previous legislation.  Both representatives accepted that the discretion exists though they differed about whether it should be exercised.

Mr Doyle argued strongly that such an exercise was inappropriate.  Given both the minimal use and the use as a part of another registered trade mark, it was inappropriate, he said, to leave the mark on the register in respect of any goods other than noodle flour.

Ms Freeman countered that there were public policy issues that argued for leaving the registration in place.  She argued that this case was comparable to the The Ritz Hotel v Charles of the Ritz (1988) 12 IPR 417:

the three marks in question were, and still remain, distinctive of goods from that source (or its successors in business) then it would be potentially conducive to public confusion, and tend to undermine the policy of the act, to remove the existing monopoly by expunging the entries of those marks or removing them from the Register. 

Again, she noted J Lyons and Coy Ltd's Appn [1959] RPC 120, at page 130:

The Tribunal, bearing in mind all the circumstances of the case, will have to ask itself the question, whether the grant of the application would unfairly or unjustly restrict or invade the statutory monopoly acquired for its trade mark by the registered proprietor.

In her submission, the proprietor had adopted the trade mark for noodle flour in July 1997 and had therefore not abandoned it, given its continued use to date.  As she put it, "There is nothing to suggest that the registered proprietor's property in its trade mark should be taken from it and nothing suggests that the public interest demands that this be done.  We submit that the public interest is certainly in favour of allowing the registered proprietor to continue to use its properly registered trade mark.  It would not be in the public interest to expunge the registration for goods other than flour, as use by another on closely related goods such as other cereal products may be productive of confusion."

However, I believe this submission starts from the wrong premise.  As McLelland J noted in Ritz, supra, at p 482,

The proper approach under both ss 22(1) and 23(1) is that if the condition of the exercise of the court's power has been established, the entry of the mark should be expunged, or the mark should be removed, as the case may be, unless sufficient reason appears for leaving it there: cf (application by) Carl Zeiss at 122 CLR 1 at 11, Astronaut Trade Mark at [1972] RPC 655 at 672.

As Mr Doyle pointed out, the present terms of the registration are broad.  They include "products of cereals", which he asserted could include breakfast cereal.  Whatever it includes, the opponent has used the trade mark only briefly, not extensively in dollar terms, and only on "noodle flour", a narrow and apparently specialised range of goods that is not sold through ordinary grocery outlets.  There is no evidence to suggest that anyone will be disadvantaged - other than the opponent - and no suggestion of particular disadvantage even there, if the goods are restricted back to precisely those on which the mark has been used.

Accordingly, I order that the trade mark be removed for all goods except noodle flour.

Costs
Mr Doyle submitted that, even if only partial removal was ordered, the applicant was entitled to its costs.

In my view, the opponent has neither been shown to have been unreasonable in its actions nor guilty of unduly escalating costs, even though its registration will now be severely restricted.  Both parties took the matter seriously and there was no open offer of a compromise at any stage.  Each has ultimately had a significant success in the opposition.  Accordingly, my decision is that neither side should be granted an award of costs at the expense of the other.

T. Williams
Hearing Officer
30 April 1999