Hamilton v Stark
[2015] FCCA 3309
•14 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HAMILTON v STARK | [2015] FCCA 3309 |
| Catchwords: PRACTICE & PROCEDURE – Whether applicant is entitled to raise a further ground of opposition to the registration of the respondent’s mark not raised before the Registrar of Trade Marks – whether an appeal to this Court is limited by section 56 of the Trade Marks Act 1995 (Cth) to those grounds raised before the Registrar of Trade Marks – whether an appeal from a decision of the Registrar of Trade Marks is a hearing de novo. |
| Legislation: Trade Marks Act 1995 (Cth) ss.10, 43, 44, 55, 56, 60 Trade Practices Act 1974 (Cth) |
| Cases Cited: Pfizer Products Inc v Karam (2006) 70 IPR 599 Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411 Southern Cross Refrigerating Co v Toowoomba Foundry (1954) 91 CLR 592 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1987) 140 CLR 216 Totev v Star [2008] FCAFC 35 Harris vCaladine (1991) 172 CLR 84 Delfi Chocolate Manufacturing SA v Mars Australia Pty Limited [2015] FCA 1065 OshKosh B’Gosh inc v Koshito Confecciones CA (1995) 33 IPR 295 Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Ptd Ltd (2004) 61 IPR 212 Richard Hamilton Wines Pty Ltd v Ewell Investments Pty Ltd (1998) 39 IPR 591 Telstra Corp Limited v Yellownet Corp (1999) 44 IPR 415 Effem Foods Pty Ltd v Marks & Spencer (2000) 47 IPR 213 Quintessence Inc v Jovani Enterprises Pty Ltd (1994) IPR 28 IPR 365 Con Agra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 McCormick & Co Inc v McCormick (2000) 51 IPR 102 Seven Up Co v OT Ltd [1947] HCA 59; (1947) 75 CLR 203 |
| Applicant: | IAN BLAIR HAMILTON |
| Respondent: | PATTERSON STARK |
| File Number: | SYG 3191 of 2013 |
| Judgment of: | Judge Emmett |
| Hearing dates: | 9 February 2015 10 February 2015 |
| Date of Last Submission: | 20 February 2015 |
| Delivered at: | Sydney |
| Delivered on: | 14 December 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Nicholas Smith |
| Solicitors for the Applicant: | Wrothwell Garth Wall |
| Counsel for the Respondent: | Mr David Scully |
| Solicitors for the Respondent: | 1Place Patent Attorneys and Solicitors |
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 3191 of 2013
| IAN BLAIR HAMILTON |
Applicant
| PATTERSON STARK |
Respondent
Contents
A. Introduction
B. The applicant’s evidence
C. The respondent’s evidence
D. Relevant legislation
E. The decision of a delegate of the Registrar of Trade Marks
F. The Proceeding before this Court
(i) Does the Court have jurisdiction to consider a new ground not raised before the Registrar of Trade Marks?
(ii) Section 44 - Are the Trade Marks deceptively similar?
(iii) Section 60 – Have any of the ALKAWAY, ALKAPOD or ALKASTREAM marks acquired a reputation in Australia prior to 6 June 2012?
G. Conclusion
REASONS FOR JUDGMENT
A. Introduction
By Amended Notice of Appeal, filed on 19 June 2014, the applicant appeals from a decision of the Registrar of Trade Marks, dated 3 December 2013, accepting a trademark application in the name of the respondent to proceed to registration. The applicant seeks an order setting aside the decision of the Registrar of Trade Marks and an order that the trademark application “ALKAVIVA” in class 11 for apparatus for filtering water be refused.
The applicant owns a company known as ‘Ion Life Pty Ltd’ (“Ion Life”). Ion Life markets and sells alkaline related health products, including devices for filtering and alkalising water. The respondent is the founder and Chief Executive Officer of ‘Stark Healthcare Ltd’, based in New Zealand. The respondent has rights to distribute the products of AlkaViva LLC, a business based in the United States of America, in Australia. AlkaViva LLC specialises in the supply of appliances that produce alkaline water.
The applicant alleges that under s.44 of the Trade MarksAct 1995 (Cth) (“the Act”), the respondent’s trademark ALKAVIVA is substantially identical with, or deceptively similar to, the applicant’s registered trade marks ALKAWAY, ALKASTREAM and ALKAPOD (“the Applicant’s marks”). All the marks are in class 11 for apparatus for filtering water. The applicant’s trade marks were registered on 17 July 2009, 17 March 2011 and 19 May 2010, respectively.
The applicant also alleges that under s.60 of the Act the Registrar erred in finding that the applicant’s trade marks ALKAWAY, ALKASTREAM and ALKAPOD had not acquired a reputation in Australia and that therefore, the respondent’s mark would not be likely to deceive or cause confusion.
The parties agreed on a number of facts as contained in a Statement of Agreed Facts filed on 18 July 2014 and I make findings in accordance with the following facts:
“2. [The] Respondent sought to register the trademark ALKAVIVA in Class 11 for the following goods and services: Apparatus for water filtering; domestic water filtering apparatus; domestic water filtering units; drinking water filters; machines for water filtering (purifying); water filtering apparatus; water filtering apparatus for domestic use; water filtering apparatus for industrial use; water filters for industrial purposes (the ALKAVIVA Mark). The application was lodged on 6 June 2012.
3. On November 2012 the Applicant filed a Notice of Opposition with IP Australia pursuant to s52 of the Trade Marks Act. The grounds of Opposition were:
a. The ALKAVIVA Mark is similar to trade mark that has acquired a reputation in Australia – s60
b. The ALKAVIVA Mark is inherently likely to deceive or cause confusion – s43
4. On 3 December 2013, the Delegate of the Trade Marks Registrar issued his direction on the matter pursuant to s55 of the Trade Marks Act, finding that “The Opponent has failed to establish either of the grounds relied upon in the Notice of Opposition”.
5. On 20 December 2013 the Applicant filed an application before the Federal Circuit Court appealing the decision of the Delegate of the Trade Marks Registrar pursuant to s56 of the Trade Marks Act.
6. The Applicant owns a company known as Ion Life Ltd ACN 101 955 935.
7. The Applicant owns 3 trade marks in class 11, namely:
a. TM No: 1275894 for ALKAWAY in Class 11 for the following goods and services: Apparatus for filtering water registered from 5 December 2008 (the ALKAWAY Mark)
b. TM No: 1324958 for ALKAPOD in Class 11 for the following goods and services: Apparatus for filtering water registered from 14 October 2009 (the ALKAPOD mark)
c. TM No: 1375925 for ALKASTREAM in Class 11 for the following goods and services: Apparatus for water filtering registered from 4 August 2010 (the ALKASTREAM mark)
8. The ALKAVIVA Mark was not used in Australia at any time prior to the ALKAWAY, ALKASTREAM and ALKAPOD Marks.
9. Ion Life markets and sells alkaline related health products. The purpose of Ion Life’s products is to filter then process tap water to produce alkalised water (Alkaline Water).
10. Alkaline Water is water with a Ph level of greater than 7.
11. There is a significant community of people, including the applicant, that consider that the consumption of Alkaline Water has significant health benefits in slowing aging and preventing disease.
12. Alkaviva LLC distributes products that produce Alkaline Water.”
B. The applicant’s evidence
The applicant read three affidavits of the applicant. The first affidavit, sworn 19 December 2013, annexed the ALKAWAY and ALKAVIVA trade marks and made the following observations as to their characteristics:
“a. They both use the same colour scheme;
b. They both use internal capitalisation;
c. They both share an identical first syllable;
d. Both trade marks are used to sell water ionisers; and
e. Both marks share and are registered for the same small market niche of this specialty product (water filters and ionisers).”
It is common ground that the respondent’s business in New Zealand, AlkaViva LLC based in the United States of America, and the applicant’s company, Ion Life, represented and sold Enco Tech water ionisers. The applicant alleges that when AlkaViva LLC announced that they were expanding internationally, including into Australia, Enco Tech terminated the agreement with the applicant on the basis that the applicant was not selling enough product and that the respondent is now permitted to sell Enco Tech product under the name ALKAVIVA in Australia. The applicant alleges that there has been customer confusion because the applicant still sells filters to suit the Enco Tech product.
In his second affidavit, sworn on 30 April 2014, the applicant stated that since 2000, Ion Life has marketed and sold alkaline related health products. The purpose of the products is to filter and then process tap water to make the water more alkaline. The applicant stated that the use of such product produces significant health benefits.
The applicant deposed that Ion Life conducts its business in Byron Bay in New South Wales, employs twelve staff, and over the past three years has had the following turnover:
a)2013: $2.29m
b)2012: $2.3m
c)2011: $2.186m
The applicant identified Ion Life’s products as follows:
“8. The largest part of Ion Life’s sales are for water filters/alkalisers. These are devices that attach to the kitchen tap and alkalise tap water. These vary in form from electronic devices to non-powered units but they all have the same function, namely to alkalise tap water. Ion Life introduced the water alkaliser in Australia in 2000 and has been very active in marketing and supporting the products since then. Ion Life also sells aligned and ancillary products such as alkaline supplements, alkaline sachets, alkaline greens, all with the prefix “Alka”. These products are marketed under the names Alkabalance, Alkabooster and AlkaSachets.
9. The Alkaway mark is used as the trading name of Ion Life and is applied to all its products.
10. The Alkastream Mark was applied to the model of water ionizer Ion Life sold and still supplies spares for. Ion Life sold 5000 AlkaStreams over 2 years including 1000 AlkaStreams to Water4Health Canada and 1000 AlkaStreams to Ion Life Germany. Since 2010 sale revenue from the AlkaStream has been $800,000. The AlkaStream was the first successful non-electric alkalizer on the wold market. As all buyers of the AlkaStream product are potentially repeat customers we need to maintain the brand awareness of AlkaStream being sold by Ion Life.
11. The AlkaPod Mark is applied to a portable water ionizer that is currently sold by Ion Life. Since 2010 Ion Life has sold over 1000 units worldwide for a turnover of $315,000. Ion Life has advertised the AlkaPod in its newsletters, in Living Now Magazine and on YouTube.
12. Ion Life also sells a number of other products, using the “alka” prefix, for which it has not applied for a trade mark. This includes:
a. AlkaBalance alkalizing drops. Since 2010 Ion Life has received $100,000 from the sale of AlkaBalance products.
b. AlkaBooster alkaline salts. Since 2010 Ion Life has received $87,000 from the sale of the AlkaBooster alkaline salts.
c. AlkaSachets alkaline greens. since 2010 Ion Life has received $112,000 from the sale of the AlkaSachets. ”
The applicant stated that the market for water filters in Australia is significant but that Ion Life only caters to a niche market for devices that filter and alkalise water. The applicant identified six competitors who supplied water ionisers to the Australian market, none of whom use the prefix “Alka” as part of their name or as part of the name of their products.
The applicant asserted that Ion Life has a customer database consisting of 40,433 people to whom it sends monthly emails which feature the ALKAWAY mark and often feature the ALKAPOD and ALKASTREAM marks.
The applicant also deposed as to the amount of advertising undertaken by Ion Life in respect of the applicant’s marks. The applicant further deposed that Ion Life has spent $15,000 in the last two years on the engagement of marketing consultants to build the reputation of the applicant’s trade marks and the ALKAWAY brand in particular. Ion Life also manages a Facebook page and maintains three websites, all of which use the ALKAWAY mark and many involve the use of the ALKAPOD and ALKASTREAM marks.
Ion Life retails its product directly to the public and through various retailers, including 140 GoVita health stores, 40 Healthy Life stores, 14 chiropractors, 14 gymnasiums and 9 wellness centres.
The applicant deposed that the nature of Ion Life’s business means that, in order to resupply their products, retail customers will often need to contact Ion Life directly to obtain accessories or supplies for their existing products and that the presence of the trademark ALKAVIVA on the search result for water alkalisers may lead to confusion. The applicant asserted that water alkalisers and water ionisers are a small market niche compared to water filters and that the respondent trades in the same niche as Ion Life. As such, the applicant alleges that the reputation and commercial value of the applicant’s trade marks will be at serious risk from the registration and use of the respondent’s mark ALKAVIVA.
C. The respondent’s evidence
In response, the respondent filed three affidavits.
The first is an affidavit of the respondent, affirmed on 27 May 2014. The respondent deposed that the business AlkaViva in New Zealand and Australia is a franchise distribution channel into Australia and New Zealand for AlkaViva LLC based in the United States of America and that the trademark ALKAVIVA is the brand for the AlkaViva LLC business that specialises in products that filter, alkalise and ionise water.
The respondent deposed that the “Viva” part of the mark comes from the Spanish or Italian meaning “Life”. The respondent deposed that the ALKAVIVA mark was conceived by AlkaViva LLC and without reference to the applicant’s business and his brands. The respondent identified various businesses on the internet who deal in alkalinity in connection with water or health products and who use the prefix “alka” in their name.
The respondent also read the affidavit of Lance Newman Scott, affirmed on 27 May 2014. Mr Scott’s affidavit annexed a copy of the decision of the Registrar of Trade Marks.
Additionally, the respondent read the affidavit of David Forsyth, affirmed on 29 May 2014. In his affidavit, Mr Forsyth deposed to being the chairman of AlkaViva LLC. Mr Forsyth further deposed that the AlkaViva business sells products through agents and distributors in approximately 30 countries.
Mr Forsyth largely corroborated the evidence of Mr Stark, the respondent. Mr Forsyth deposed that he had been personally involved in the branding of the AlkaViva business and that it had been conceived of completely independently from the applicant’s ALKAWAY mark. Mr Forsyth deposed that the component “alka” directly referred to the word alkaline and that “viva” derived from the Spanish or Italian language for “life”. Mr Forsyth deposed that the component “viva” connoted the anti-aging and health benefits of alkaline water.
Mr Forsyth also gave evidence that the visual identity for ALKAVIVA was a logical extension in both concept and execution from the respondent’s original branding and that the branding was in no way selected by reference to the applicant or his business. Both the respondent’s brand and the ALKAVIVA brand have circles depicting bubbles, a wavy line and shade through the centre of the name, which appears to depict a wave suggesting water.
Mr Forsyth deposed in his affidavit, affirmed on 29 May 2014, about the origin of the ALKAVIVA brand as follows:
“6. I have personally been involved in the branding of the AlkaViva Business. We conceived of the brand name AlkaViva completely independently from the Applicant’s Alka Way name. The component ALKA directly refers to the word “alkaline”, namely alkaline water produced from using AlkaViva’s supplied products. VIVA is derived from the Spanish (or Italian) language “life”. I understand that the word in use in a phrase can mean “long live’. The component VIVA connotes the anti-aging and general health benefits of alkaline water.
7. The visual identity for AlkaViva was developed in the fall of 2012 as a logical extension (in both concept and execution) from our original Ionways branding (developed in 2007). The branding was is no way selected by reference to the Applicant or his business.”
D. Relevant legislation
The applicant’s opposition to the registration of the mark ALKAVIVA by the respondent before the Registrar of Trade Marks was based on ss.43 and 60 of the Act. The applicant’s application before this Court is based on ss.44 and 60 of the Act.
Sections 43, 44 and 60 of the Act are as follows:
“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.
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.
(2) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of services (applicant's services) must be rejected if:
(a) it is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar services or closely related goods; or
(ii) a trade mark whose registration in respect of similar services or closely related goods 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 services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.
(3) If the Registrar in either case is satisfied:
(a) that there has been honest concurrent use of the 2 trade marks; or
(b) that, because of other circumstances, it is proper to do so;
the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.
(4) If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant's trade mark for a period:
(a) beginning before the priority date for the registration of the other trade mark in respect of:
(i) the similar goods or closely related services; or
(ii) the similar services or closely related goods; and
(b) ending on the priority date for the registration of the applicant's trade mark;
the Registrar may not reject the application because of the existence of the other trade mark.
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) 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.”
E. The decision of a delegate of the Registrar of Trade Marks
The Registrar of Trade Marks’ decision makes clear that the applicant opposed the registration of the respondent’s ALKAVIVA mark on grounds specified in s.43 and s.60 of the Act.
In relation to the s.43 ground, the Registrar of Trade Marks found as follows:
“17. There is nothing before me to show that the Applicant’s Trade Mark has a connotation which would result in the public being deceived or confused as to the nature of the goods or services on which it is being used as a trade mark. I find that the ground of opposition pursuant to s 43 is not established.”
In relation to the s.60 ground proposed by the applicant, the Registrar of Trade Marks summarised the applicant’s opposition to the mark and made findings as follows:
“23. The Opponent has declared:
a. I have been operating Ion Life Pty Ltd for a period of 11 years and since 2009 operating as Alkaway.
b. The trade mark has been registered for some time as Mr Stark is well aware.
c. The name ALKAVIVA is extremely close to Alkaway. So close for this not to be a coincidence and a deliberate attempt at confusing existing potential clients.
d. The business outlined in Class 11 is in the main for Water Ionisers, Alkalizers and associated water filtration equipment in both static and electronically.
e. In addition Alkaway (also trading and trademarked in NZ) market products with the Alka in the product name which is directly linked (sic) to our trademark…
24. The Applicant has submitted:
The Opponent has not provided any examples of use of his trade marks, evidence of market channels, sales figures, promotion and no evidence demonstrating resultant reputation.
I agree with these submissions by the Applicant. The evidence provided by the Opponent contains nothing substantial in respect of the reputation which may or may not have been acquired by any of its trade marks. A bald statement that the Opponent has ‘since 2009 been operating as Alkaway’ does little, if anything, to evidence that Alkaway, or any of the Opponent’s other trade marks, has acquired a reputation. The Opponent has discussed at length the similarities between its trade marks beginning with ‘alka’. However, unless the evidence provided can show that a trade mark has acquired at least a modicum of reputation, an examination of any similarities that might exist between the trade marks is unnecessary.
25. The Opponent’s evidence falls well short of that required to satisfy me that at the Priority Date any of the Opponent’s trade marks, or any other trade mark, has acquired a reputation in Australia such that use of the Applicant’s Trade Mark would be likely to deceive or cause confusion. Accordingly, the Opponent has failed to establish the ground of opposition pursuant to s 60.”
F. The proceeding before this Court
As stated above, the applicant now relies on the ground specified in s.44 of the Act, as well as the ground specified in s.60 of the Act. The s.44 ground was not raised before the Registrar of Trade Marks. That issue is dealt with immediately below prior to considering the applicant’s opposition pursuant to ss.44 and 60 of the Act to the registration of the respondent’s mark.
Does the Court have jurisdiction to consider a new ground not raised before the Registrar of Trade Marks?
The respondent contends that, pursuant to ss.55 and 56 of the Act, the Court has no jurisdiction to consider the applicant’s present opposition under s.44 of the Act.
The respondent submits that an appeal to this Court is limited under s.56 of the Act to the decision of the Registrar of Trade Marks pursuant to s.55 of the Act.
Relevantly, ss.55 and 56 of the Act are as follows:
“55 Decision
(1) Unless subsection (3) applies to the proceedings, 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.
56 Appeal
The applicant or the opponent may appeal to the Federal Court or the Federal Circuit Court from a decision of the Registrar under section 55.”
Whilst s.55 of the Act states that the Registrar of Trade Marks must make its decision on any ground on which the application was opposed, the respondent urges a narrow construction on the effect of ss.55 and 56 of the Act such that it is not open on appeal for the applicant to raise a new ground under s.44 of the Act.
The applicant relied only on s.43 before the Registrar of Trade Marks. In considering whether the goods or services are likely to deceive or cause confusion because of some connotation that the trade mark or a sign contained in the trade mark has, as stated above, the Registrar of Trade Marks concluded that the respondent’s trademark ALKAVIVA does not have a connotation within it which would result in the public being deceived or confused as to the nature of the goods or services in respect of which it is being used as a trade mark. The Registrar of Trade Marks referred to Pfizer Products Inc v Karam (2006) 70 IPR 599 at [6]-[26], where Gyles J noted that the purpose of s.43 of the Act is to prevent the public from being deceived or confused as to the nature of the goods offered by reason of the secondary meaning connoted by the mark in question, rather than, for example, deception by reason of similarity with other marks (see [53]).
In considering s.43 of the Act, it was therefore not necessary for the Registrar of Trade Marks to consider whether the respondent’s trademark ALKAVIVA was substantially identical with or deceptively similar to the applicant’s trade marks ALKAWAY, ALKASTREAM and ALKAPOD.
The respondent concedes that the s.44 ground is based on the same factual matrix and involves some of the same considerations as the grounds under ss.43 and 60 of the Act. The applicant’s complaint essentially is that the trademark of the respondent is deceptively similar to the trademark of the applicant. The respondent concedes that the goods are similar and that the applicant’s products have an earlier priority date.
Section 56 of the Act provides for an appeal to this Court from the decision of the Registrar of Trade Marks. There are three types of appeal; an appeal de novo, an appeal by way of rehearing and an appeal stricto sensu. In considering the nature of an appeal from a decision of a Court Registrar to make a sequestration order, the Federal Court of Australia in Totev v Star [2008] FCAFC 35 at [12] –[14] distilled the relevant principles relating to the nature of appeals as identified by the High Court of Australia in Harris vCaladine (1991) 172 CLR 84 as follows:
“12. A hearing de novo is different from an appeal stricto sensu and is different from an appeal by way of rehearing. In the case of an appeal stricto sensu, the question would be whether, upon the material before the registrar, the conclusion reached by the registrar was correct. In an appeal by way of rehearing, the appellate court would rehear the matter as at the date of the appeal, but on the evidence called before the registrar, subject to a power to receive further evidence where appropriate: the rights of the parties would be determined by reference to the circumstances, including the law, as they existed at the time of rehearing (Harris v Caladine at 125). In each case any question concerning the exercise of discretion would be subject to the restrictions imposed on an appellate court in reviewing the exercise of a discretion (see House v The King [1936] HCA 40; (1936) 55 CLR 499).
13. In the case of a hearing de novo, however, the judge reviewing the order begins afresh and exercises for himself or herself any discretion exercised by the registrar. The parties commence the proceeding again, subject to any rules concerning the use of evidence adduced before the registrar. The hearing de novo involves the exercise of the original jurisdiction and the petitioner, in the case of a bankruptcy petition, must start again, call witnesses and make out the petitioner’s case (Harris v Caladine at 124).
14. Because the hearing of an application for review of a sequestration order is a hearing de novo, it would not be sufficient for the reviewing judge to be satisfied that the registrar made no error and simply to dismiss the application for review. The judge who hears the review application must hear the petition afresh and must be satisfied as to the matters referred to in s 52 of the Bankruptcy Act. Thus, the reviewing judge must herself or himself be satisfied with the proof of:
• the matters stated in the petition;
• the service of the petition; and
• the fact that the debt or debts on which the petitioning creditor relies is or are still owing.
The reviewing judge must also exercise afresh the discretions conferred by s 52(2).”
In a recent decision of the Federal Court of Australia, published in October 2015, in Delfi Chocolate Manufacturing SA v Mars Australia Pty Limited [2015] FCA 1065, Jessup J made clear that an appeal from a decision of the Registrar of Trade Marks is in the nature of an appeal de novo. His Honour stated at [3] as follows:
“3. Both appeals are in the nature of appeals de novo to be heard and determined in the original jurisdiction of the court. The question which confronts the court, therefore, is the same question as was dealt with by the delegate, namely, whether the applicant’s mark should be registered having regard to the extent to which any ground on which the application was opposed by the respondent has been established. The respondent’s grounds are the same as those taken before the delegate, namely, those available under ss 44(1) and 60 of the Act.”
In order to succeed under s.60 of the Act, a ground which was addressed by the Registrar of Trade Marks, it will be necessary for the applicant to show first that he had established a reputation in the goods and second, whether the trademark would be likely to deceive or cause confusion. In determining the second matter under s.60 of the Act, it is necessary to consider similar evidence to that required pursuant to s.44 of the Act in considering whether the respondent’s trademark ALKAVIVA is substantially identical with or deceptively similar to the applicant’s marks, ALKWAWAY, ALKASTREAM and ALKAPOD.
It is common ground that substantially the same evidence would need to be considered for the applicant to succeed under either s.44 or s.60 of the Act.
Accordingly, even if leave was required to raise the new ground under s.44 of the Act, almost the same evidence would need to be established and considered in considering the appeal in respect of the Registrar of Trademark’s decision on the ground under s.60 of the Act. Moreover the respondent does not assert any prejudice or unfairness if leave was to be given to raise the new ground under s.44 of the Act. In the circumstances, were leave necessary, I would grant it.
However, for the reasons above, the hearing before this Court is a hearing de novo and no jurisdictional issue arises as to the applicant’s new contentions in relation to s.44 of the Act.
Section 44 - Are the Trade Marks deceptively similar?
Pursuant to s.10 of the Act, the applicant must establish that the respondent’s mark, ALKAVIVA, so nearly resembles any of the applicant’s marks ALKAWAY, ALKAPOD and ALKASTREAM, that its use is likely to deceive or cause confusion.
Where a trader adopts a series of trade marks with a common element, such as the applicant has done here with ALKAWAY, ALKAPOD and ALKASTREAM, another trademark containing that element could be regarded by purchasers as indicating products from the same trade source. However, where the common element is descriptive, rather than distinctive, the value of the mark is diminished. This is even more so where there are many other marks registered with the same prefix (See OshKosh B’Gosh Inc v Koshito Confecciones CA (1995) 33 IPR 295).
It is common ground that there are a significant number of people in the community who consider that the consumption of alkaline water provides health benefits. The respondent contends that “alka” is a word which is generally accepted to be a shortening of alkaline and has direct application in ordinary language to the parties’ products.
The applicant submits that it is insufficient to show that “Alka” is common to the trade. The applicant submits that even if the term “Alka” is common to the trade, this does not prevent a finding of deceptive similarity. I accept that the Court must look at the marks as a whole to determine whether issues would cause a number of persons to wonder whether it might or might not be the case that the alkalising and ionising products of the respondent are closely related to the products of the applicant such that they come from the same source. It is accepted that it is enough that the ordinary person entertains an ordinary doubt (Registrar of Trade Marks v Woolworths (1994) 45 IPR 411, 428, citing Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry (1954) 91 CLR 592).
The applicant submits that a consumer aware of ALKAWAY as the applicant’s trademark and ALKASTREAM and ALKAPOD as they applied to the applicant’s product would see the mark “ALKAVIVA” and would entertain a reasonable doubt as to whether the product was related to the applicant’s marks.
The applicant submits that “Alka” is not a descriptive word and, rather, it is a distinctive element.
The respondent contends that the only common component is the prefix “Alka” and that the prefix “Alka” is descriptive and does not distinguish the applicant’s marks. The respondent relies on the use by others of the “Alka” component elsewhere in the Trade Marks Register and in the Australian market place. The respondent also contends that on a proper comparison of the whole of the marks, there is no near resemblance either visually, phonetically or conceptually.
I accept the affidavit evidence of the respondent that “alka” or “alkaline” are terms that are already in use in relation to alkalising products in Australia and elsewhere. In my view, in the context of the sale of water alkalisers, “alka” is not a distinctive element and is a common word in the industry.
In the circumstances, I find that “Alka” is not a made up word and is an accepted abbreviation of alkaline.
I find that the component “alka” is the only relevant similarity between the respondent’s mark and any of the applicant’s marks. The respondent’s suffix “Viva” has no visual or aural similarity to the applicant’s suffixes “way”, “pod” or “stream”. Further, I find that “Viva”, being a Spanish word meaning “life” does not have any conceptual similarity to the applicant’s suffixes. I also find that the word “Viva” does not have any conceptual similarity to the applicant’s marks. Further, the applicant’s marks are three syllables, whereas ALKAVIVA is four syllables.
Further, I accept the evidence of Mr Forsyth and the respondent that the ALKAVIVA trademark evolved without any reference to the applicant’s business or his trade marks ALKAWAWAY, ALKAPOD or ALKASTREAM.
I also accept Mr Forsyth’s evidence that the business name ALKAVIVA for New Zealand and Australia is a franchise distribution channel into New Zealand and Australia for a business based in the United States of America, AlkaViva LLC, and that the AlkaViva business was originally branded Ionways and commenced business in the United States and Canada in 2007 and now distributes to approximately 30 countries.
I also accept Mr Forsyth’s evidence that the AlkaViva business subsequently became aware that the applicant registered the Ionways trademark in Australia and that the applicant’s agent in New Zealand registered the Ionways trademark in New Zealand. I accept the evidence of Mr Forsyth and the respondent that the decision to change the business name to ALKAVIVA from Ionways was in part because it was a name more descriptive of the business and because they believed ALKAVIVA had a more universal appeal, especially in Latin countries, and in part because the applicant had obtained a trademark for Ionways in Australia.
I accept Mr Forsyth’s evidence that the ALKAPOD brand was first sold to the AlkaViva business from a company in China, being unrelated to the applicant, and that the AlkaViva business commenced use of the ALKAPOD mark, selling over 5,000 alkaliser/ioniser units under the ALKAPOD brand since 2009.
I also accept that the applicant’s ALKASTREAM product was superseded by a product rebranded as ‘Ultrastream’ by the applicant. I accept Mr Forsyth’s evidence that the AlkaViva business decided to manufacture their own product instead of rebranding the non-exclusive product from China.
It is well acknowledged that there is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name that may be equally applicable to any business of a like kind. In such circumstances, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public (see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1987) 140 CLR 216 at [22], per Stephen J (“Hornsby Building Information Centre”)). Whilst Hornsby Building Information Centre was a case under to the then Trade Practices Act 1974 (Cth) and not a case under the Act, I find the principle referred to by Stephen J at [22] to be an appropriately relevant principle in the case before this Court.
On the evidence before me in the area of alkaline water health products, whether they be alkaline water or methods of achieving that outcome, “Alka” is a descriptive word. I do not accept that it is a distinctive element, and therefore the cases relied on by the applicant to that effect I do not find to be of assistance to the applicant (see Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Ptd Ltd (2004) 61 IPR 212; Richard Hamilton Wines Pty Ltd v Ewell Investments Pty Ltd (1998) 39 IPR 591; Telstra Corp Limited v Yellownet Corp (1999) 44 IPR 415; Effem Foods Pty Ltd v Marks & Spencer (2000) 47 IPR 213; and Quintessence Inc v Jovani Enterprises Pty Ltd (1994) IPR 28 IPR 365).
Further, I find that the suffix “viva” is a descriptive term and the prefix “Alka” is similarly descriptive. In the applicant’s trade marks ALKAWAY, ALKAPOD and ALKASTREAM, the suffixes, “way”, “pod” and “stream” are not descriptive, whereas the prefix “Alka” is.
In conclusion, I am not satisfied that the resemblance between the applicant’s trade marks ALKWAY, ALKAPOD and ALKASTREAM and the respondent’s ALKAVIVA trademark is such that the ALKAVIVA trademark is “likely to deceive or cause confusion” (see Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411).
(iii) Section 60 – Have any of the ALKAWAY, ALKAPOD or ALKASTREAM marks acquired a reputation in Australia prior to 6 June 2012?
Section 12 of the Act provides that the priority date of a mark is the day that would be the date of the registration of the trademark in respect of those goods or services, if the trademark were registered. It is common ground that the priority date for the ALKAVIVA mark is 6 June 2012. In the circumstances, it is necessary for the applicant to show that the reputation of its trade marks as of this date was such that trademark ALKAVIVA would be likely to deceive or cause confusion.
On the evidence before me, I find that the applicant’s trademark ALKASTREAM is no longer actively marketed by the applicant in that the applicant is not seeking to grow that brand, having changed the name to Ultrastream. That conduct, to my mind, suggests that the applicant was not invested in the prefix “Alka” and certainly had not acquired sufficient reputation in that mark to suggest any potential confusion in the market place as a result of the introduction of the ALKAVIVA mark.
Accordingly, the registration of the mark ALKAVIVA would not be likely to deceive or cause confusion.
I accept that reputation within the jurisdiction may be proved by a variety of means, including advertisements, sales figures, advertising expenditure and other promotions (see Con Agra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193; McCormick & Co Inc v McCormick (2000) 51 IPR 102).
The applicant’s company Ion Life has been trading in the market since 2000 and under the ALKAWAY brand since 2008. I accept that the ALKAWAY mark is applied to all the products that Ion Life sells and that Ion Life was responsible for introducing new water alkalisers into the Australian market in 2000. I accept that Ion Life has an annual turnover in 2011 and 2012 of around $2m.
The ALKAPOD trademark is applied to a portable water ioniser sold by Ion Life. I accept that 1,000 units have been sold with a turnover of around $315,000. I accept that Ion Life sends monthly emails to its customer database of over 40,000 people and advertises in various magazines and has an active online presence on YouTube, Facebook and Google.
However, reputation is more than merely prior use or prior sales. The applicant’s trademark needs to be recognised to be “associated in the minds of the Australian public” with the goods (see Seven Up Co v OT Ltd [1947] HCA 59; (1947) 75 CLR 203).
In order for the applicant to succeed, the Court must be satisfied that consumers associate the prefix of “Alka” with the goods marketed and produced by Ion Life. I am not so persuaded on the evidence and material before me. In particular, I have regard to the fact that ALKASTREAM was recently discontinued and rebadged as Ultrastream.
Moreover, even accepting that water filtration systems that alkalise water are a niche market and, even if the ALKAWAY, ALKAPOD and ALKASTREAM marks have a reputation, I am not satisfied that the use of the ALKAVIVA mark would be likely to deceive or cause confusion. There is no evidence before me as to why it is that the applicant determined the names ALKAWAY, ALKASTREAM and ALKAPOD, whereas there is evidence before me of the reason behind the creation of the ALKAVIVA mark.
In circumstances where I have found that “Alka” is descriptive of products relating to alkaline water, it is not likely that the applicant’s suffixes “way”, “pod” and “stream”, even if they had a reputation, the advent of the use of the ALKAVIVA mark would be likely to deceive or cause confusion.
G. Conclusion
Accordingly, the proceeding before this Court should be dismissed.
I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of Judge Emmett
Associate:
Date: 14 December 2015
0
12
0