Harry Moss v Audioline Pty Ltd

[1999] ATMO 9

TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS

RE: Opposition by Audioline Pty Ltd to the registration of trade mark number 475452 in the name of Harry Moss

History of the application
On 27 October 1987, Telephone Systems Inc Pty Ltd ("TSI"), an Australian company, filed the present application, seeking to register the trade mark AUDIOLINE in respect of "telecommunications equipment".  The application was filed under the then-current Trade Marks Act 1955.

During examination, the examiner concluded that the trade mark was not distinctive, in that it directly described the goods as being equipment used in the reproduction of sound.  The application lay pending for a very long time, due entirely to the lack of response from the applicant.  The 1955 act was repealed as of 1 January 1996 and, under the transitional provisions of the Trade Marks Act 1995, the new legislation commenced to govern the application. 

On 18.10.96 Harry Moss informed the Trade Marks Office ("TMO") that he was the new owner of the trade mark.  Mr Moss, a resident of England, relied on an assignment said to have been made in 1989.  The TMO accepted that there had been an assignment and recorded Mr Moss as the applicant.  In the decision which follows, any reference to "the applicant" will be a reference to Mr Moss unless a reference to TSI is clearly intended.

Mr Moss attended to the outstanding examiners' objections to the application.  Firstly, he filed a statement attesting to the intended use of the trade mark.  The statement that he filed was apparently made by an officer of TSI.

To gain acceptance of his application in the face of the examiner's objection, Mr Moss relied on the fact that the trade mark had been used by Moss Security Pty Ltd, a company associated with him.  Mr McDonnell, the managing director of that company, declared to use of the trade mark in relation to telephones, answering machines and car radio cassette players.

Also, to accord with the actual use made by Moss Securities, Mr Moss' attorneys requested the TMO amend the statement of goods from "telecommunications equipment" to "telephones, answering machines, car radios and parts and accessories for the aforesaid".  This the TMO did, and in that form the application was accepted. 

Opposition to registration
Registration of the application is now opposed by an Australian company, Audioline Pty Ltd ("the opponent").  Without going too deeply into the substance of the opposition at this stage, the opponent relies on its own claims of importation of speakers for car radios since 1985 and of car stereos commencing in 1988.  The opponent claims that it too has used the trade mark AUDIOLINE.

To support its position, the opponent relies on declarations by its director Richard Bouris and by Rick Goldberg, a lawyer.  Mr Bouris in turn refers to other evidence which forms part of his company's other dispute with Harry Moss.  That other dispute, I should explain, involves opposition by Mr Moss to the registration of trade mark application 543289, filed by Audioline Pty Ltd.  That other opposition is itself ready for hearing once the result of the present opposition is known.  It was not feasible to hear the two matters concurrently as there were simply too many variables in the fate of the present application.  These will become fixed only on final decision of the present matter.

In the present matter, Mr Bouris has, as is not unusual, said in his declaration that he also relies on evidence that is part of the other opposition.  That evidence has thus been properly brought into the present matter and I have carefully considered it, in full. 

Mr Moss relies on declarations by Kevin McDonnell, to whom I have already referred, and by Sean McManis, a lawyer.  Mr McDonnell's declarations go to sales of car radio cassette players and telephone answering machines by Moss Security Pty Ltd.

At the hearing the parties were represented by their respective legal advocates.  Sean McManis, a solicitor of the firm Baldwin Shelston Waters, appeared for the applicant, while Glenn McGowan of counsel, instructed by Madgwicks Solicitors, appeared for the opponent.

Issues for decision

The issues the opponent pursued at the hearing are the only ones on which I need to give my decision. Suffice it to say that all of them are based on grounds of opposition provided for in part 5 of the Trade Marks Act 1995. 

My decision will deal with the opposition under the following headings:

• improper allowance of an amendment of the application,

• defective claim to ownership and

• inherent unregistrability. 

Under each heading I will note the relevant provisions of the Trade Marks Act 1995.  For clarity, I will deal with the evidence under those various headings, in the context of the legislation and the arguments put to me.

Improper allowance of an amendment.
Amendment of an application is controlled by ss 64 and 65 of the 1995 act, which applied at the time of the amendment of the goods covered by the present application.  The relevant provision is s 65, which deals with amendment of the application at any time after the publication, by the TMO, of the details of the initial application.  The appropriate sub-section is s 65(5), which reads:

An amendment may be made to any other particular specified in the application unless the amendment would have the effect of extending the rights that (apart from the amendment) the applicant would have under the registration if it were granted.

I have already said that the opponent disputes the allowance of an amendment from "telecommunications equipment" to "telephones, answering machines, car radios and parts and accessories for the aforesaid".  The opponent has therefore relied on s 65(5) to support its opposition under s 62(a):  "the application, or a document filed in support of the application, was amended contrary to this Act." 

Both sides made extensive reference to this issue.  For the opponent, Mr McGowan relied on the fact that that radio communications and telecommunications are administered under separate pieces of Commonwealth legislation.  By way of evidence, the opponent has relied on extracts from a publication by the Law Book Company, "The Laws of Australia".  From this, it appears that telecommunications and "radiocommunications" (sic) are dealt with under separate pieces of Commonwealth legislation.  A radiocommunications receiver or transmitter is any receiver or transmitter of radio emissions, "other than a line within the meaning of the Telecommunications Act 1991".  Telecommunications, under the legislation, includes both guided and unguided transmissions.  It includes voice telephony by wire, optical fibre, radio communication and microwave links. 

The evidence goes on to show that "Telecommunications services are provided over telecommunications networks".  These include both the physical parts or facilities used and more mundane items such as antennae, holes, pits and poles.  Networks are installed, maintained and operated by "network operators", and only licensed carriers may establish certain kinds of network.  I would, however, have more faith in the opponent's evidence if the exhibit in question, exhibit RJB31, a single page, did not end in the middle of a sentence that begins "The main objectives of telecommunications…".

In the opponent's evidence in support, I also note that Mr Bouris, a director of the opponent company, has declared that his work in selling audio equipment requires him to keep abreast of government regulations.  He gives his opinion that a car radio is not an item of telecommunications equipment.  He declares that this is because they are not used with a telecommunications network or in connection with a telecommunications service.

Mr McGowan, at the hearing, argued that some of the present goods specified in the application rendered any involvement of a "network operator" completely anomalous.  In his view "telecommunications equipment" simply did not include car audio equipment, yet the latter were at the very heart of Mr Moss' interests.  He asked how it could be said that a car speaker, attached only to a car cassette player and not connected to a radio, had anything in common with a telephone.

Mr McManis, however, argued that the matter was to be looked at in a more practical way.  As he approached the matter, common usage is that telecommunications is a broader term, of which radio communications is a subset.  The applicant's evidence includes a variety of extracts, in relation to the word telecommunications, from dictionaries.  These are as follows. 

Dictionary	Definition
Webster's Third New International Dictionary	"communication at a distance (as by cable, radio, telegraph, telephone or television)
McGraw Hill Dictionary of Scientific and Technical Terms, second edition, 1978	"communication over long distances
New Shorter Oxford English Dictionary	"communication over a distance, esp by cable, telegraph, telephone, or broadcasting.
Macquarie Dictionary, second revision, (1987)	"the science or technology of telegraphic or telephonic communications by line or radio transmission"

From these, the matter is not entirely clear.  Arguably, telecommunications can include both broadcasting and television.  Certainly, that sits well with the Shorter Oxford definition.  On the other hand, Macquarie suggests a more limited meaning, restricting its definition to simply telegraphic or telephonic communications, albeit these may be carried by radio. 

The Australian source, the Macquarie Dictionary, thus agrees with the Law Book Company extract relied on by the opponent.  That exhibit relates to the term as used in Commonwealth legislation.  The applicant did not raise the incompleteness of the extract as a problem and I think I can give full face value to it.  Those two exhibits match the opinion of Mr Bouris.  While he is not an independent expert, I am entitled to have some regard to his declared opinions, in an area where technical expertise is relevant.

That being so, I am satisfied that a car radio is not a piece of telecommunications equipment. 

Even more so, I think Mr McGowan was right to say that car audio speakers are not telecommunications equipment.  Nor are the sorts of amplifiers that, while able to be connected to a radio, are really intended to drive expensive and powerful in-car stereo systems at high volume.  The two latter items, however, are within the scope of "accessories for the aforesaid".

For the moment, let me simply flag the fact that the application was improperly amended and refers to goods that should not be there.  After I have looked at the other grounds, I will consider the effect of this finding, and others, in concluding my decision.

Invalid claim to ownership
This ground of opposition is provided for under s 58.  The 1995 act puts the matter in plain English: the registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.  Usually, such questions go to the making of the application at a time when the original applicant was alleged to be not the owner at common law.  There is that element here also.  However, given the subsequent involvement of Mr Moss, some preliminary points need to be established. I will deal with them as sub-issues of the ownership question.

ownership and the assignment matter

"Applicant" means, in terms of s 6, "the person in whose name the application is for the time being proceeding".  That is now Mr Moss.  He claims to be, to quote s 107, "the person to whom it (the trade mark) has been assigned or transmitted".  Mr Moss therefore made an application under s 107 for the assignment to be recorded.  He relied on the provisions of s 108(2), which says:

On and after the day on which the Registrar records the particulars of the assignment or transmission, the person to whom the trade mark has been assigned or transmitted is taken, for the purposes of this Act, to be the applicant for the registration of the trade mark.

An application under s 107 must be in an approved form and be supported by a prescribed document, as set out in regulation 10.1, to establish the title of the assignee or of the person to whom the trade mark has been transmitted.  There has never been a dispute with the form in which Mr Moss made his application though Mr McGowan was highly critical of the documentation of the assignment.  I turn, therefore, to that question.

The TMO does not have a properly executed deed of assignment for this trade mark.  That is not unusual and, as Mr McManis argued at the hearing, where a proper case is made the TMO can be persuaded that title has passed without seeing the original document.

In the present case, Mr Moss declared, on 4.12.96, that the trade mark was assigned to him by TSI on 7.4.89.  He supports that with a copy of an another document, ("the substitute deed").  That in turn refers to an earlier deed.  The earlier deed is said to have been executed by the assignor on 7.4.89 and to have assigned the trade mark from TSI to Mr Moss as of that date.  It is said that, as the earlier deed was lost "before it could be executed by the assignee", the parties have agreed to execute the substitute deed.  Thus, the substitute deed was intended to replace the lost deed of 7.4.89.

What was filed at the TMO is an incomplete copy of the substitute deed, taken at some time before execution by Mr Moss.  Since it is Mr Moss who now wishes to rely on the substitute deed, and since he has declared that the substitute deed was executed, the lack of his own signature on the substitute deed is not fatal.  As to the assignors, the substitute deed was to be executed under common seal.  It bears two signatures, those of a director and the company secretary.  However, in the copy, there is no sign of the common seal.

To add to the picture, Mr Moss' attorneys have, during the opposition process, found a copy of the original deed.  The newly-found copy was apparently made by his former attorneys at a time when the deed was to be sent to Mr Moss for execution.  From that copy, it seems that the common seal of TSI was affixed to a deed made on 7.4.89.  The deed is signed by Stan Kron who, on the face of the document, was the company secretary of TSI, and by Karen Rubin, a director.

Mr McGowan was critical of the carelessness with which the original deed and the substitute deed were handled by Mr Moss.  He said that this defied belief.  He also suggested that the deed itself was, in its various iterations, of questionable authenticity. 

The opponent's evidence, according to Mr McGowan, shows that Mr Kron was not at the relevant time the company secretary.  That evidence comes from the Australian Securities Commission.  Mr McManis attempted to explain this by reference to a gap in the records.  It is possible there is some confusion in the records, and it is certainly clear that there were two companies, with different Australian Company Numbers, both named Telephone Systems Inc Pty Ltd.  They appear, from the names of the directors, to be very closely related.  I have no particular expertise in understanding or resolving apparent contradictions or discrepancies in such records.  I am therefore at a loss to know what is actually established by the exhibit in question, or if they are definitive.  Finally, in the declaration of which they form part, there is little to show that the search that found two apparently related TSI companies was exhaustive.

Accordingly, while I agree with Mr McManis that the TMO is not the appropriate authority for determining questions of company law, those questions seem to have arisen in this case.  The parties, subject to appeal, will simply have to accept my best attempt to resolve these apparently complex questions on the basis of the limited information available to me.

As I read exhibit RJB 27, both of the companies so named went into receivership in 1991 and have been deregistered.  Mr Kron was secretary of one of the two from 29.9.77 to 16.8.86 and of the other from 28.9.83 to 30.6.86.  Fairly obviously, he was not, at least prima facie, secretary of either company when the deed was executed.  However, whatever the status of Mr Kron, it is clear that Karen Rubin was a director of both companies from 2.3.89 to 24.6.93, and of one of them for a longer period. 

Taking the various documents together, it is fairly clear that there was an original agreement to assign the trade mark to Mr Moss, and that this culminated in the substitute deed.  I am satisfied that a deed was executed on behalf of TSI.  It seems to be common ground between TSI and Mr Moss that they intended to assign the trade mark.  For all that there are procedural problems with the way they have attempted to do so, I am satisfied that the parties agreed to make the assignment and that the documentation is sufficient, barely, to establish this.  On the present evidence, I reject the suggestion that the paperwork documenting the assignment was bogus.

The opponent claims that, even so, the original application by TSI was still not properly assigned to Mr Moss.  The opponent argues this on several fronts:

• at no stage did the original applicant show the necessary intention to use the trade mark in respect of all of the goods initially

• the assignment to Mr Moss was without goodwill and, being an assignment of an apparently unused trade mark, does not confer ownership at common law

• the situation amounts to trafficking in trade marks.  The entire assignment was a sham.  It never really happened or, at best, the evidence that it did is too flimsy to satisfy the Registrar that any benefit from the original application can accrue to Mr Moss

I will look at the first issue as a threshold one.  Obviously, if the original application was flawed on the day TSI made it, there is no hope that the assignment can improve the matter.

At the time the application was filed, trade mark regulation eight, under the 1955 regulations, applied.  This says that:

8. (1) An applicant for the registration of a trade mark in respect of two or more different goods, or all the goods included in one of the prescribed classes of goods, shall furnish in support of his application a written statement indicating that the applicant uses or proposes to use presently the trade mark in relation to all the goods specified in the application or the goods included in the class of goods specified in the application.

Mr McGowan noted that the only such statements were filed long after the application had been made. The first of these, made by Stan Kron, purportedly the company secretary, is dated 7.4.89. That statement said that the mark would be used either by the TSI or by another person or company, intended to be appointed a registered user under s 45(1)b of the Trade Marks Act 1955. Because of this failure to be specific, about who the user would actually be, the statement did not meet the requirements of regulation 8.

A second statement, dated 7.4.92, was filed in May 1992.  It was on the basis of this statement that the application proceeded to acceptance.  It indicates that the mark is intended to be used by the applicant "in relation to the goods specified in the application".  The statement is made in the name of Stan Kron, though it is not signed by anyone.  As Mr McManis noted, such statements, unsigned but apparently made by a named individual, were routinely accepted by the TMO under the former legislation.

To undermine this statement, however, the opponent has built up several pieces of evidence.  For starters, the opponent's evidence shows that, at the time the statement of user was made by Mr Kron, TSI was under the control of a receiver manager, appointed on 8.2.91.  As I have already noted in relation to the assignment documentation, Mr Kron was by then apparently not the company secretary.

I find therefore that the statement of user, now that it is put under scrutiny, is asserted to have been made by a person who apparently did not hold the position attributed to him, in a company then in receivership.  The person in question, moreover, did not actually sign the statement.  The statement is arguably quite meaningless, though I do not express an opinion on that point.  It is, of course, still also arguable that Mr Kron was entitled to make the statement in some other capacity.  However, that entire issue is irrelevant, for reasons which I will explain below. 

Nor do I accept Mr McGowan's argument that the acceptance of the application is open to attack under s 62(b).  That paragraph deals with applications accepted on the basis of evidence or representations that are false in material particulars.  The statement of user was no longer required to gain acceptance under the new legislation, so its questionable worth is immaterial.

Mr McGowan argued that Kraft Foods v Gaines Pet Foods, 34 IPR 198, was relevant here. He suggested that this case did not authorise the Registrar to ignore flagrant and fundamental flaws in documents filed at the TMO. However, the Gaines case was a removal application.  There, the removal applicant was under an onus to show that it was a person aggrieved.  In attempting to meet that onus, the removal applicant in Gaines relied on a statement under regulation 8 made to support its own co-pending application for registration.  That statement was filed after the non-use application was filed and did not address the situation on the date on which the non-use application was made.  The decision of Sackville J was that such a statement, after the filing of the non-use application, could not shed any light on the standing of the non-use applicant at the time when it actually applied.  The non-use applicant had therefore failed to meet the onus that was on it.

In the present case, the onus is on the opponent.  There may be something artificial about the circumstances under which the statement of user was constructed by or on behalf of TSI.  I have already expressed my uncertainty about what position Mr Kron may have occupied at the time of the filing of the application.  I agree, too, that at the time the statement was made, TSI was apparently in receivership and had already assigned the mark to the applicant.  Even so, there is no reason not to accept that the statement was made honestly, albeit in retrospect.  It can be seen as a fair attempt to attest to the intention at the time of filing, though perhaps that intention came to nought.  Equally, however, the making of an application for registration is, prima facie, evidence of intention to use the trade mark.  Either way, the intention of TSI has not actually been impugned by the opponent. 

The opponent's attack, however, goes deeper than failure to comply with a now-repealed regulation.  The second aspect of the opponent's challenge to the assignment is that, unless there has been use, there is nothing, at common law, on which the applicant can rely.  Mr McGowan noted that an unused trade mark cannot, under common law, be validly assigned without the goodwill in the business, as Shanahan states at p 288 of Australian Law of Trade Marks and Passing Off.

As Mr McManis argued, the applicant is seeking to rely on the fact of the present application, which is potentially able to result in a registered trade mark.  It does not necessarily rely on any common law rights that TSI may have held.  That is quite consistent, in my view, with a system which allows an applicant to register an unused trade mark.  The making of an application can in itself assert that rights exist in such an unused trade mark (Shell v Rohm and Haas (1949) 78 CLR 601). In my opinion, Mr Moss is entitled, under the terms of s 108, to rely on the priority date of this application if, but only if, I remain satisfied that there has been a valid assignment of the trade mark, albeit without goodwill. The assignment documents, for all that they have some major defects, are sufficient to show that there was an assignment. It was for the opponent to show, if it could, that the assignment was bad. It has not done so.

Finally, I cannot agree that there is an onus on an assignee to establish the use of a trade mark which it bought without goodwill.  What the assignor buys in that case is simply the benefit of the application.  The question of ownership under common law does not arise.  Nor, in any case, is there an adequate prima facie case that the mark was not used. 

To complete the analysis of the assignment and its effect on the opposition, I turn to the question of trafficking.  This amounts to an allegation that Mr Moss, desperate to find a priority date which would defeat the opponent's own application, took advantage of an application which, having been filed by TSI, was more or less abandoned.  I have already said that I am satisfied that there was a genuine assignment from TSI to the applicant.  It follows that, since the making of the application by TSI has not been impugned, the applicant is entitled to full enjoyment of the rights arising from the application that it bought from TSI.

ownership and use by others

I turn now to the more familiar question in such matters: can the opponent show use, before the priority date of the present application, by anyone other than the applicant, of the same mark for the same kind of thing?  If it can do this, the prior user becomes the owner at common law and this punctures the application for registration, assignment or no assignment.

The opponent has imported radio speakers into Australia, allegedly from an early date, for sale under the AUDIOLINE trade mark.  Mr McManis was quite critical of this evidence, saying that nowhere was there a single conclusive piece of evidence of this early use.  There is evidence to show that a company with which Mr Bouris was connected, Austral-Lee Pty Ltd, imported some loudspeakers from Kemgold Corporation in Taiwan.  These speakers were described by Kemgold as being their (Kemgold's) model AL-310 "with specifications branding and cartoning as in O/N 2302".  Another exhibit establishes that, by June 1996, the opponent was trying to find a supplier who would sell ready-branded AUDIOLINE goods.  This is accompanied by an order for goods with part numbers like "IF - 6003  (AL - 6003)".  I agree with Mr McManis that this evidence does not show use of the trade mark in question in relation to loudspeakers.

The position is complicated by the fact that the trade mark AUDIOLINE was apparently being used overseas by Foster Electric Company.  The latter is, according to Mr Bouris, the world's largest supplier of car audio equipment to car companies and also supplies product for manufacturers such as Clarion and Sony.  According to Mr Bouris, Foster Taiwan, a subsidiary of Foster, was already using the trade mark in markets other than Australia.  Mr Bouris has declared that Foster Taiwan "suggested that my company adopt the name Audioline as my company name and for the product, as product was already available at that time packaged under the name AUDIOLINE and printed brochures were available in respect of advertising product under the name AUDIOLINE.  Therefore, my company adopted the name AUDIOLINE in early 1985".

Just what this adoption involved is less than clear from Mr Bouris's evidence.  Where the Taiwanese company Kemgold Corporation fits in is equally obscure.  I do not accept that Mr Bouris's declaration shows any sufficiently clear-cut evidence of early use of the trade mark AUDIOLINE in relation to audio loudspeakers.

A second declaration on which the opponent has relied is that of Augusto Tucci.  This declaration fails to make the position clearer with regard to loudspeakers.  Mr Tucci says, for instance, that "Audioline … was importing and selling speakers under the name AUDIOLINE since early 1985".  Mr McManis was critical of the lack of specific detail here and pointed out that the statement did not necessarily proceed from first-hand knowledge.  I agree with him.  I am not able to tell, from such general pronouncements, just what Mr Tucci has in mind.  Such statements are quite consistent with a meaning like: "the company, a retailer, has sold various brands of speakers under its business name since early 1985".  I therefore do not know, on the basis of this evidence, if the speakers in question actually bore, or were offered in trade under, the trade mark AUDIOLINE. 

However, Mr Tucci declares that his company did import AUDIOLINE branded car radio cassette players for the opponent.  Exhibit AT-1 refers to an offer, in July 1988, to import these goods under the trade mark.  Exhibits AT-1 to AT-5, taken with the text of Mr Tucci's declaration, clearly show that these goods were indeed brought into this country under the trade mark in question.  The first such shipment arrived in December 1988.

As to telephones and possible use by TSI, I agree with Mr McGowan on a preliminary point.  The applicant bought the trade mark from TSI without goodwill.  Therefore, he cannot rely on first user by TSI prior to the date of the application which has now been assigned to him.  In any case, there is no clear evidence of any use by TSI.  The best that the applicant can rely on under that heading is found in the declaration of Mr McDonnell, who is relying on his own knowledge of use by that company in relation to telephones. 

I note the extensive argument about one aspect of the testimony of Mr McDonnell.  I completely accept Mr McDonnell's veracity as a declarant but his knowledge of the business of TSI is "not full".  Given this, I must treat with caution his statement that "around 1989, shortly before my company began distributing products marked AUDIOLINE, I became aware of use of that trade mark by Telephone Systems Inc Pty Ltd in relation to telephones".

Without more information, I cannot accept his unsubstantiated say-so as sufficiently convincing on this critical question of fact.  I can give no weight at all to what Mr McDonnell goes on to say he has "learned" about the relationship between TSI and Mr Moss.  The source of this learning is not in evidence and I agree with Mr McGowan that, given the wording of the declaration, the most likely source is the say-so of Mr Moss.  Such second-hand information is weakened, to the point where it cannot assist the applicant.

From the evidence, the applicant's use did not commence until the 1989/90 financial year.  In that year Mr McDonnell claims to have marketed car cassette radios, telephones and telephone answering machines.  The date on which this use is said to commence is a matter of some speculation, however.  The closest Mr McDonnell can get to it is, in his additional declaration of 30.11.94 in relation to application 543289: "on or about July 1989", and the evidence is far from clear as to which goods this may have involved. 

I will pass over Mr McGowan's arguments that the connection between Mr Moss and his related interests is unclear.  As matters resolve themselves, it is not necessary for me to comment on the possible relevance of the "authorised user" provisions.  The extent of the control, by Mr Moss, of the use of his trade mark, is irrelevant, for reasons which will become clearer below.

I note also that his use in respect of car cassette radios has not been as successful as for telephones and answering machines; indeed Mr McGowan relied on Mr Bouris' evidence to argue that use on the former goods had ceased.  Mr Bouris made certain inconclusive allegations.  I dismiss these as insufficiently supported.  In the lack of any evidence of actual abandonment of the trade mark in relation to those goods, I consider this also to be an issue I do not need to consider. 

The position at common law, on the evidence as I see it, is that the opponent was the first user in respect of car radio cassette players, in July 1988.  That, however, is after the priority date of the application and fails to displace the claim asserted by the applicant at the time of filing.

As to loudspeakers, the opponent's evidence is insufficiently detailed to be able to displace the prima facie claim of the applicant. 

Conversely, the applicant is perhaps arguably the first user in relation to telephones and telephone answering machines.  While the evidence is also inconclusive, little turns on this.  The onus was on the opponent to impugn the applicant's claim.  It has not met that onus.

Mr McGowan did not argue at any stage that ownership of the trade mark by the opponent in respect of car radio cassette players and related audio goods would interfere with ownership of the mark by the applicant in respect of telephones and answering machines.

Capable of distinguishing
Mr McGowan argued that the mark AUDIOLINE was not capable of distinguishing the applicant's goods.  Such a mark, he argued, must be rejected, as stipulated in s 41(2).  He went on to assert, in particular, that under the terms of s 41(6) the application needed the support of evidence that, at the filing date, the trade mark did in fact distinguish the applicant's goods.

I do not accept this argument and I will now explain why this is so. 

AUDIOLINE is not a dictionary word.  It is more than possible to find a meaning in the word.  Audio products are electronic devices for the production of, or for dealing with, sound.  However, this must be kept within proper bounds.  The Macquarie Dictionary indicates that an audio system is a synonym for a sound system, typically something like a home stereo system.  I am satisfied, on what I know of the ordinary use of the language, that audio equipment is "sound gear" of one sort or another.  I should note too that Mr McGowan's arguments were directed at car audio systems.  Nobody has suggested, at any stage, that to refer to a telephone or an answering machine as an audio line, or a line of audio equipment, is an ordinary use of the language. 

Even though its derivation is utterly obvious, it is, as a made-up word, just outside the common stock of words ordinarily open to other traders to use in relation to what I will call audio products.  It has, therefore, a measure of inherent adaptation for the job of distinguishing one make of audio product from another. 

Given this key finding, I move on and apply the test posed by s 42(2) and (3): is the mark capable of distinguishing, when viewed solely on the merits of the extent to which it is inherently adapted to distinguish?  I base this answer on the classic test posed by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR at 514.

In my opinion, the chance of another trader, "actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it" is not high.  However, in relation to audio equipment, it is not to be dismissed.  I will now explain this finding.

Manufacturers of electronic audio apparatus may, and I stress that word, may wish to describe their new line of product as being an audio line. It is possible to invent examples, such as:  PIONEER'S AUDIO LINE.  As distinct, perhaps, from their BUDGET LINE or their VIDEO LINE.

In such a case, an odd conjunction of upper-case letters, taken in isolation, may suggest that AUDIOLINE goods originate from PIONEER.  I find it difficult, though, to imagine how such use could be likely to conflict, in practice, with the rights that are sought by the applicant.  I think the public is to be given sufficient credit as able to distinguish between AUDIOLINE equipment and other examples that might involve non-trade mark use of the words "audio line". 

On the other hand, the obviousness of the derivation is, as I have said, marked and the degree of inherent adaptation is small.  If I am to conclude that this trade mark, in the future, "will distinguish" the applicant's goods, I need to be satisfied that it will acquire enough adaptation, through use, to augment the amount of adaptation that is inherent within it.  Perhaps that evidence need not show extensive use but it must show use as a trade mark to an extent that suggests that significant reputation will accrue, in the future, to the applicant.

I note that the mark has in fact been used on both audio products and telephone answering machines.  Therefore, in terms of the probability issue put by Kitto J, I conclude that the mark is capable of distinguishing.  The acceptance under s 41(5) was therefore justified in relation to audio products.  In relation to telephone answering machines, the mark was already inherently sufficiently capable of distinguishing the goods and was inherently prima facie acceptable under s 41(3) 

The only question, of course, is whose goods will be distinguished, those of the applicant, or the opponent?  That falls to be decided under other provisions and, given my conclusion below, is not of any difficulty.

Conclusion
I think, having arrived at this point, I can bring together the resolutions under the various grounds.

I have found that, in relation to telephones and telephone answering machines, the applicant's claim has not been impugned.  That is not disturbed by the fact that the opponent appears to be the first user, albeit after the filing date, for car radios including car radio cassette players.  I have also noted that the application was wrongly amended.

To retain as much of the scope of the application at the time of acceptance as is possible, while deleting goods to which the application did not originally relate, I therefore require that the application be amended to:  "Telephones, answering machines and parts and accessories for the aforesaid, all being in the nature of telecommunications equipment".

If the application is so amended within one month of the date of this decision, I will direct that registration proceed and make no order as to costs.  If on the other hand the application is not so amended, I will refuse it as it stands and award costs to the opponent.

T. E. Williams
Hearing Officer
29 January 1999.