Guinness United Distillers & Vintners (Aust.) Ltd v Kingswood Distillery Pty Ltd

[2002] ATMO 78

TRADE MARKS ACT 1995

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

Re:Opposition by Guinness United Distillers & Vintners (Aust.) Ltd to registration of trade mark 779661(33) – LIMONSKY – in the name of Kingswood Distillery Pty Ltd. 

Background

In this matter, Kingswood Distillery Pty Ltd of Werrington, New South Wales, (‘Kingswood’) filed application on 27 November 1998 to register the trade mark LIMONSKY (“the opposed trade mark”) in respect of alcoholic beverages including liqueurs in Class 33 of the International (Nice) Classification of Goods and Services:

The application was accepted for registration and advertised as such in the Australian Official Journal of Trade Marks on 25 March 1999.  On 25 June 1999, after seeking and receiving an extension of time in which to do so, Guinness United Distillers & Vintners (Aust.) Ltd (‘Guinness’) served and filed Notice of Opposition.  The Notice cites various grounds of opposition but Guinness relied on those under sections 44(1), 60 and 43 of the Act at the hearing of the matter.

The hearing of the matter was before me, as a delegate of the Registrar of Trade Marks in Sydney on 22 July 2002.  Mr Perrignon of Counsel represented the applicant.  Ms Drummond, solicitor, of Freehills Carter Smith Beadle, represented the opponent.

The Evidence

The parties have served and filed evidence in support, evidence in answer and evidence in reply.  This comprises:

Declarant	Referred to as	Date Filed	Exhibits
Evidence in Support
John Carl Pollaers	Pollaers	22 March 2000	A – Y
Evidence in Answer
Graziella Prestipino	Prestipino 1	18 April 2002	A – G
Graziella Prestipino	Prestipino 2	28 September 2002	A – G
Evidence in Reply
Isabelle Schurer	Schurer	25 February 2002	A – G

Guinness is a major importer and manufacturer of alcoholic spirits and alcoholic beverages and has operated in Australia since 1930.  One of the drinks it sells is a fizzy, lemon flavoured, concoction, known in the trade as a ‘premix’ that, at the priority date, was made up out of vodka, wine, carbonated water, sugar, flavourings and preservatives.  This brew has an alcoholic content of 5% and was sold under the trade mark LEMON RUSKI which is frequently shortened, by Guinness and those purchasing the drink, to RUSKI.  (The formulation of the product changed, I gather, since the priority date to one that is more similar to that of Kingswood’s product).

The LEMON RUSKI product was launched in July 1997 and achieved remarkable sales, supported by extensive advertising on television, cinema, radio, outdoor advertisements and point of sale material.  I am satisfied that the trade marks RUSKI and LEMON RUSKI had an extensive reputation at the priority date.

Kingswood is an Australian manufacturer of spirituous drinks and is the successor in business to Prestipino Enterprises Pty Ltd which bought the Kingswood Distillery in Werrington from another company.  The Kingswood Distillery has operated since about 1938 and produced a vodka called DOMSK till 1989.  Subsequently, the Kingswood Distillery has produced a vodka under the trade mark STRONGANOFF.

In 1989, Kingswood, commenced manufacture of a premix similar to the Guinness product comprised of vodka, wine, carbonated water, sugar, flavourings and preservatives under the trade mark LIMONSKY on a label which incorporated much of its get up from the now unused DOMSK packaging.  The product has a lemon flavour.

Ms Prestipino, a director of Kingswood, attests that her father, a shareholder in the company, thought of the trade mark LIMONSKY for the product in the following way.  The Italian word for ‘lemon’ is LIMONE.  Whilst searching for an appropriate ending for the word, Mr Prestipino saw a sign containing the words SKY LIGHTS and liked it.  Ms Prestipinostates that it was not Mr Prestipino’s intention to create a word which sounded Russian.  I note that during the examination of this opposed application, the examiner was told by a person identified as ‘Grace’ that the word SKY was added to the ‘word’ LIMON to suggest ‘big’.  During her submissions, Ms Drummond submitted that these differing accounts were inconsistent and amounted to some discrepancy which might reflect adversely upon Kingswood.  I do not agree – the word SKY in the outdoor sign seen by Mr Prestipino might well have appealed to him because it suggested bigness.

Dealings between the Parties

The launch of the product under the LIMONSKY trade mark was accompanied by letters to retailers and advertising in newspapers and on a radio station.  The latter advertisement drew a cease and desist letter from Guinness who took exception to the basis of a perceived comparison between their product and that of Kingswood.

Reasons

Section 43

Section 43 of the Act provides:

43  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.

T.G.I. Friday's Australia Pty Ltd v TGI Friday's Inc [2000] FCA 720 (31 May 2000) at paragraph 43 confirms that the connotation referred to within section 43 must be one which arises from the applied for trade mark itself – it is not to be determined from a comparison of trade marks.

Ms Drummond submitted that the opposed trade mark has a connotation of a lemon flavoured alcoholic drink and because of the strong association of the trade mark LEMON RUSKI with both a lemon flavoured drink and Guinness (the opponent), the opposed trade mark has a connotation which would deceive or cause confusion. 

I do not agree – the word LIMONSKY might suggest that the goods are, somehow, connected with lemons, but it is not immediately apparent from the trade mark what the goods are.  The goods suggested by the trade mark could as easily be, for example, lemon flavoured candies, washing detergent, lemon coloured wallpaper or even, following the SKY element in the trade mark, ultra-light aircraft.  Further, if the trade mark is considered contextually, in relation to the goods, any misdescription in the opposed trade mark is not apparent.  It is difficult to conclude, therefore, that the opposed trade mark does contain a misleading connotation.  Further, to conclude that, because of a similarity of the parties’ goods, the trade marks are also similar is, I consider, to put the cart before the horse and presuppose that Guinness has some sort of exclusivity in lemon flavoured alcoholic drinks: any confusion which might arise on this basis is because of a reason not intrinsic to the opposed trade mark.  Moreover, the process suggested by Ms Drummond, if pursued to its conclusion, necessarily culminates in a comparison of the trade marks which is not, in terms of TGI Friday’s, above, appropriate.  Finally, the products of both the applicant and the opponent contain lemon.  The application of the words, LIMON, or LEMON, in the trade marks of the parties are appropriate - they are an accurate description of an element of the beverages.  Therefore, there is no impropriety in their application.  Certainly, the use of the expression LIMON does not ascribe an attribute to the product that it does not have. 

Guinness has not established this ground of opposition.

Sections 44(1) and 60 - Discussion

These sections of the Act provide:

44  Identical etc. trade marks

(1)       Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:

(a)       the applicant’s trade mark is substantially identical with, or deceptively similar to:

(i)        a trade mark registered by another person in respect of similar goods or closely related services; or

(ii)       a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

(b)       the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

Note 1:   For deceptively similar see section 10.

Note 2:   For similar goods see subsection 14(1).

Note 3:   For priority date see section 12.

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

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.

Section 10 provides:

10  Definition of deceptively similar

For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

I have noted, above, that I am satisfied that the trade marks on which Guinness relies, RUSKI and LEMON RUSKI had a reputation in Australia at the priority date for the purposes of section 60.  Guinness relies, in terms of section 44, on its registered trade mark, 739530 (33) LEMON RUSKI which has a priority date which is earlier than that of the opposed trade mark and is in respect of the same goods.  At the hearing, Ms Drummond did not argue that the trade marks are substantially identical but submitted that the trade marks are deceptively similar.  The sole consideration in regard to both section 44 and 60 is whether the trade marks are deceptiviely similar.

A classical statement of the test for deceptive similarity is in the oft quoted words of Windeyer J in The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407 at 415:

On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's television exhibitions.

Windeyer J added, at 416, that "[the] deceptiveness that is contemplated must result from similarity; but the likelihood of deception must be judged not by the degree of similarity alone but, by the effect of that similarity in all the circumstances".

In her submissions, Ms Drummond stressed the opponent’s position that the trade marks are aurally similar.  Ms Drummond submitted that the following principles apply and directed my attention to the words of Williams J in Sym Choon & Co Limited v Gordon Choons Nuts Limited (1949) 80 CLR 65 at 78:

The basic principle is that the proposed mark must be so unlike the rival mark that it is not reasonably probable that a purchaser who knows of the latter and has an imperfect recollection of it is likely to be confused.

Ms Drummond submitted that:

·     "[J]ust as the test of visual impression is not that of a side by side comparison, so the test of aural impression is not one of supposing that the two words are said one after the other": Gardenia Overseas Pte Limited v The Garden Co Ltd 29 IPR 485 at 493.

·     The weight to be given to the aural impressions of the marks will depend on the context in which the goods are sold. More weight will be given to the aural impression of the marks if "the name [of the product] will normally be spoken by the purchaser to the sales assistant": Companhia Souza Cruz Industria E Comercio v Rothmans of Pall Mall (Australia) Ltd (1998) 41 IPR 497

Ms Drummond drew my attention to the observations of the House of Lords in Aristoc Limited v Rysta Limited (1945) 62 RPC. In that case the House of Lords approved of the following statement by Luxmore J in the Court of Appeal (see at 73):

The answer to the question whether the sound of one word resembles too nearly the sound of another so as to bring the former within the limits of the Trade Marks Act 1938, s 12, must nearly always depend on first impression, for obviously a person who is familiar with both words will neither be deceived nor confused. It is the person who only knows the one word and has perhaps an imperfect recollection of it who is likely to be deceived or confused.  Little assistance, therefore, is to be obtained from a meticulous comparison of the two words letter by letter and syllable by syllable pronounced with the clarity to be expected from a teacher of elocution. The court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description, but also of the shop assistant ministering to that person's wants.

The verbal emphasis given to various parts of the marks, submitted Ms Drummond, must be considered. The beginning of words are very important for the purposes of distinction: London Lubricants (1920) Ltd's Appn (1925) 42 RPC 264 at 279.

Further, Ms Drummond submitted, consideration must also be given to circumstances in which goods are likely to be verbally requested and whether they are "often retailed in places of entertainment, such as hotels, clubs and the like, where there is considerable ambient noise". In such cases, "Any substantial similarity between the sound of brand names is likely to cause confusion": Companhia Souza Cruz Industria E Comercia v Rothmans of Pall Mall (Australia) Ltd (1998) 41 IPR 497 at 504 (comparison of FREE and FREEDOM for cigarettes). Regard may also be had to the tendency to slur particular words: Aristoc Limited v Rysta Limited (1945) 62 RPC 65 at 73.

Applying these principles to the present case, Ms Drummond submitted:

·     The beginning or first two syllables of the marks are extremely similar. The only difference being the vowels "e" and "i" which in this context are pronounced in a very similar manner. Further the meaning of this part of the Applicant's mark is the English word "lemon" It is widely recognised that "limone" and "lemon" have the same meaning and the marks can therefore also be seen as sharing the same "idea".

·     The final syllables of the marks are aurally identical though spelt differently. The harsh pronunciation of the letters "sk" emphasises the final syllable of each mark.

·     The LIMONSKY mark comprises both of the dominant aural elements of the LEMON RUSKI mark (the first word "LEMON" and the final syllable "SKI without any additional distinctive elements. The only part of the LEMON RUSKI mark absent from the LIMONSKY mark is the second last syllable - "m". As this syllable is not emphasised in the pronunciation of the word "RUSKI", it carries less importance when comparing the two marks.

·     When consideration is given to the context in which products bearing each mark are likely to be sold, the importance of these sirhilarities is increased.

·     The evidence of the Opponent shows that LEMON RUSKI products are sold in outlets such as bars and clubs where the product is consumed at the point of purchase. In these outlets, the goods will be purchased over the counter by verbal request. The Applicant's evidence shows that the Applicant promoted its Product to all licensed premises.

·     The high degree of ambient noise in such venues means the potential for confusion between LEMON RUSKI and LIMONSKY is considerable. Further, the words may be slurred or spoken quickly heightening the potential for confusion. The potential for confusion between LEMON RUSKI and LIMONSKY is certainly greater than for FREE and FREEDOM, for example. It is also at least equal to the potential confusion between ARISTOC and RYSTA.

Mr Perrignon, for Kingswood, also directed my attention to the quote from Australian Woollen Mills, above, and submitted that as endorsed on the Register, the word "Lemon" in the trade mark LEMON RUSKI is entirely a descriptive word, which “will be altered to reflect the predominant flavour of the goods in relation to which the trade mark is used”.  The only distinctive word in the opponent's mark is the word “RUSKI”.  The proper comparison, says Mr Perrignon, is therefore between the element  “RUSKI” in the Guinness trade mark and the Kingswood trade mark, “LIMONSKY”.

Reasons

As observed by Heerey J in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 at 501:

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-op Ltd v New South Wales Dairy Corp (1990) 24 FCR 370; at 377; 16 IPR 289; at 296.

Further, the quotations from earlier case law on which Ms Drummond relies must now be read in the light of the caution in Registrar of Trade Marks v Woolworths [1999] FCA 1020 (29 July 1999) at paragraph 45:

The position now is that the Registrar and the Court at first instance would need to be satisfied that there was a reasonable likelihood of deception or confusion before denying acceptance of the application for registration.

My impression of the trade marks is that they while there are slight similarities between the trade marks, in total effect the trade marks are dissimilar.  The major area of similarity between the trade marks is at their beginning (the ‘words’ LEMON and LIMON), where some aural emphasis might lie as per London Lubricants, above; however, this element is to be to some large extent discounted in the comparison: Mond Staffordshire Refinery Co Ltd v Harlem (1929) 41 CLR 475 at 477; Coca-Cola Co (Canada) Ltd v Pepsi-Cola Co (Canada) Ltd (1942) 59 RPC 127.

Further, I believe, absent evidence to the contrary, that the most obvious way of pronouncing the opposed trade mark is LIMON-SKY and that this is the way in which most Australians will pronounce the opposed trade mark.  There are, in this obvious way of pronouncing the opposed trade mark, very obvious aural differences between it and the trade mark on which Guinness relies.  If I be wrong if this, and the element -SKY in the opposed trade mark is pronounced in the same way as is the word SKI, I have reservations as to whether Guinness can effectively claim a monopoly in an element that imparts a Russian ‘flavour’ to a trade mark which contains vodka:  Mond Staffordshire; Coca-Cola Co, above.

Additionally, the element RUSKI, in the Guinness trade mark, bears marked similarity to the word RUSSKI, meaning RUSSIAN.[1]  The element RUSKI in the Guinness trade mark is, because it stands as an entity in the Guinness trade mark and because of its resemblance to the word RUSSKI, likely to be perceived, recognised and recalled as a distinct constituent in the Guinness trade mark.

[1] Merriam-Webster Collegiate Dictionary.

I do not believe that the basis of comparison suggested by Ms Drummond of comparing the similarities and differences between the instant trade marks and those involved in other cases such as FREE/FREEDOM or ARISTOC and RYSTA and arriving at a conclusion on those basisi s appropriate: those issues were decided with reference to the trade marks in suit and in the context of trade in which they were used or proposed to be used.  The same principles and process are applicable in this matter.

I note Ms Drummond’s concerns regarding the allegedly high degree of ambient noise in bars and pubs where the goods are oftentimes bought.  However, having regard to the obvious differences in the trade marks, and the fact that the element LEMON/LIMON must be, to an extent, discounted for the purposes of comparison, I do not regard the issue as being one which would lead to confusion or deception to a degree greater than for any other trade marks.

Decision

As I am not satisfied that there is a reasonable likelihood of deception or confusion, Guinness has not established the grounds of opposition under sections 60 and 44.  Neither has Guinness established its ground under section 43.  For completeness, I note that Guinness has not established the other grounds specified in the Notice.  I direct that the application may proceed to registration one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued.

Costs

Cost may follow the event and I order that Guinness pay Kingswood’s costs in this matter at the scale in the regulations.

Ian Thompson
Hearing Officer

13 September 2002