HCA Colours Australia Pty Ltd v Holland Colours NV

[2003] ATMO 50

TRADE MARKS ACT 1995

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

Re:Opposition by HCA Colours Australia Pty Ltd to registration of trade mark 807561(Class) – Trade Mark – filed in the name of Holland Colours NV.

And

Re:Opposition by Holland Colours NV to registration of trade mark 820389(Class) – Trade Mark – filed in the name of HCA Colours Australia Pty Ltd

Background

1)   These matters are ‘cross oppositions’ involving the following two trade mark applications:

Appn No:                   820389
Owner:  HCA Colours Australia Pty Ltd (hereinafter ‘the Australian company’)
Priority Date:             18 January 2000
Goods/Services:         Class 1: Chemical Products for industrial purposes

Class 2: Paints, lacquers, pigments, and pigment dispersions; colourants; raw natural resins; metals in the form of powders for painters, decorators, printers and artists
Class 3: Providing technical assistance to manufacturers using pigments including colourants

Trade Mark:               

Advertised:                3 August 2000
Endorsement: Provisions of subsection 44(4) applied

(The endorsement indicates that the above trade mark was accepted on the basis of its use before the priority date of the trade mark appearing below).

Appn No:                   807561
Owner:  Holland Colours NV (‘the Dutch company’)
Priority Date:             17 September 1999
Goods/Services:         Class 1: Chemical products for industrial purposes

Class 2: Paints, lacquers; pigments and pigment dispersions; colorants; raw natural resins; metals in the form of powder for painters, decorators, printers and artists

Trade Mark:               HCA (‘plain letters’)
Advertised:                4 May 2000
Endorsement:             Nil

1. The Notices of Opposition were filed within the times allowed; and, the grounds cited in the Notices will emerge in my reasons, below.

2. The Dutch company and the Australian company have served and filed evidence in relation to their oppositions as allowed by the Trade Marks Act 1995 (‘the Act’) and regulations thereto.

3. As a delegate of the Registrar of Trade Marks, I heard submissions from the parties on 16 June 2003 in Melbourne.  The Dutch company was represented by Ian Horak of Phillips Ormonde & Fitzpatrick.  The Australian company was represented by Trevor Stevens of Davies Collison Cave.

   The evidence comprises:

Statutory Declarations of:	Position Known as	Date Made	Exhibits
Henry Collin Weinberg	Managing Director Australian company HCW1	14 November 2000	A – F
JM De Heer	Former President Dutch Company JMDH1	31 Jul 2001	JMDH-1 – JMDH-10
GH De Heer	President Dutch Company GHDH	31 July 2001	GHDH-1 – GHDH-24
Henry Collin Weinberg	As Above HCW2	15 January 2002	HCW-1 – HCW-2
Gary Jennings	Technical Services Manager Teck Plas Extrusions	8 February 2002
Graham Trenerry	Compounds Operations Manager RBM Plastic Extrusions Pty Ltd	11 February 2002
James Borg	Product Development Manager Inkjet Solutions Pty Ltd	11 February 2002
Andrei Pokorski	Senior Development Chemist AV Syntec Pty Ltd	13 February 2002
Graham Warner	Managing Director Inform Plastics Pty Ltd	13 February 2002
Samual Eric Burgaty	Technical Manager Wattyl Australia Pty Ltd	13 February 2002
Rodney Gaunt	Business Manager Johnson Matthey (Australia) Pty Ltd	20 February 2002
Eric Sherman	General Manager MAP of Flint Ink Australia Pty Ltd	18 February 2002
Les Passo	Managing Director Colour Dispersion Company Pty Ltd	20 February 2002
John Whiting	CEO John Whiting Plastics	8 March 2002
Henry Collin Weinberg	As above HCW3	14 March 2002	HCW-1 – HCW-2
Ron Heavey	Manufacturing Manager Key Plastics Pty Ltd ROH
Keith Meikle	Plant Manager Iplex Pipelines Australia Pty Ltd	14 June 2002
GH de Heer	As Above GHDH2	16 September 2002	GHDH-15 – GHDH-31
Ian Clark	Business Manager Multichem Pty Ltd Clark 2	12 December 2002	IC1 – IC2
Gary Starmer	Regional Manager Multichem Pty Ltd	30 January 2003
David Thomas	Managing Director Multichem Pty Ltd	29 Jan 2003	DT-1

1. I have not attempted to sort the above evidence into evidence in support, or answer, to the two oppositions as some declarations function as both.

2. I note that the above declarations which do not have a ‘shortform’ in the form of a surname given in the second column, attest to the declarants’ knowledge, or lack of it, of the trade marks in the marketplace and whether or not they would be confused by the concurrent presence of the trade mark in the marketplace.  I will call these the ‘marketplace’ declarations, should it be necessary to refer to them.

3. Both parties make and/or sell pigments, dyes, etc for use in industry.

4. Crucial, to my mind, to one aspect of these proceedings is the use of the parties’ trade marks in Australia.  The history of the parties’ trade marks use in Australia is complicated by the fact that the trade marks of the parties are the end products of evolutionary processes and also that there have been prior dealings between the parties.  Obviously, if a trade mark is the result of alteration and development over time, not all of its ‘ancestors’ will necessarily share a substantial identity with it.  Therefore, in terms of subsection 7(1),[1] the use of a progenitor of an existing trade mark may not be deemed use of an existing trade mark unless the trade marks in question share a substantial identity.[2] 

   [1] 7  Use of trade mark

   [2] See, for example, AMW Projects Pty Limited v Ray Mullins & Sons Pty Limited [2000] ATMO 17 (29 February 2000)

   Use of trade mark 807561 and the Dutch trade marks

5. The Dutch company, of Apeldoorn in Holland, has, according to paragraph 3 in JMDH, used the trade marks HCA and HCA Colours continuously in Australia since 1979.  Paragraphs 5 to 13 of JMDH outline a course of dealings between the Dutch and Australian companies which the declarant avers was in relation to the trade marks HCA and HCA Colours.  The Australian company in 1979 ordered a shipment of chemicals, HOLCORIDE PVC Red PC 1100, from the Dutch company which the declarant states carried the trade marks.  The invoice supplied with or in relation to the shipment shows the Dutch company’s trade mark thus:

6. To my mind, the use of the above trade mark is neither a use of the trade mark HCA or of the trade mark HCA Colours since those trade marks do not share, in terms of subsection 7(1), a substantial identity with that above: The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407. On a side-by-side comparison, the differences are manifest. Due to the elision in the above trade mark, the trade mark is capable of being read as ha Colours; and, the issue of how the trade mark is to be perceived is further complicated by the mixed use of lower and upper case letters in the trade mark.  Put another way, the above trade mark has alterations or additions which substantially affect its identity, viz a viz the trade marks HCA and HCA Colours in terms of section 7(1). Obviously, then, the Dutch company is, in terms of the Act, mistaken in its claims as to the history of the use of the trade marks HCA and HCA Colours in Australia.  This discovery sparks two observations and a further enquiry: the first observation is that the Dutch company may also be mistaken in any claim it makes as to how the Australian company’s application might have been ‘tainted’ by prior dealings between the companies.  The second observation is that, having made this basal error concerning what constitutes use of the trade marks HCA and HCA Colours, all of the Dutch company’s marketplace declarations as to the use of the trade marks in Australia must be viewed with a degree of skepticism.  Obviously, if the marketplace declarants have made the same mistake, little weight could be put on their evidence.  The enquiry also becomes when, if ever, the Dutch company commenced using the trade marks HCA or HCA Colours in Australia.

7. Mr Stevens submitted very strongly at the hearing that the Dutch company has not shown that it had used either trade mark in Australia.  The predominant use of a trade mark in the materials, in the form of brochures and company reports, supplied by the Dutch company is in the form:

8. 
   

   (‘the Holland Colours 1 trade mark’)

9. In the Holland Colours 1 trade mark, the alphabetical letters H and A are in white, the alphabetical letter C is coloured red as are the words HOLLAND COLOURS, underneath the letters – the background is ‘black’ which I have rendered a lighter colour to make the words more discernible.  In the Dutch company’s stationery, this trade mark is rendered thus:

    
   

   (‘the Holland Colours 2 trade mark’)

10. The Holland Colours 2 trade mark appears in correspondence between the Dutch and Australian companies which is dated 12 November 1993 and is the earliest use of this trade mark which I find in the evidence.  However, while Mr Horak argued that the use of the above Holland Colours 1 and 2 trade marks is both a use of the trade marks HCA and HCA Colours, I cannot agree.  The pertinent consideration here in terms of subsection 7(1), above, is the substantial identity of the trade marks HCA and HCA Colours to the Holland Colours 1 and 2 trade marks which is to be assessed in terms of Shell, above.  As Mr Horak submitted, the words HOLLAND COLOURS lack inherent distinctiveness; however, I would be hesitant to discount them from either of the above trade marks in the comparison and I distinguish my reasoning here from the reasoning of Carr J in PB Foods Ltd v Malanda Dairy Foods Ltd [1999] FCA 1602 (17 November 1999). There the trade marks were CHILL and CHOC CHILL used, or proposed to be used, in relation to ice-cream and dairy products which trade marks were found to be substantially identical: the reasoning was that, as the word CHOC was fully descriptive, it could be discounted in the comparison. I am not convinced that, although they lack inherent distinctiveness, the words HOLLAND COLOURS do perform the same function in relation to the goods of the Dutch company as does the word CHOC in relation to dairy foods and ice-cream. In my consideration, the expression HOLLAND COLOURS falls short of being a pure description such as the words DUTCH PAINT. Further, when the above Holland Colours 1 and 2 trade marks of the Dutch company are considered, it is apparent that they gain some of their inherent distinctiveness from the particular arrangement of comparatively weak trade mark material: Diamond T. Motor Co's Appn (1921) 38 RPC 373 (Ch.D.). Any subtraction or addition to weak trade mark material may be inclined to alter its identity and I am satisfied that this is the case here. I thus agree with Mr Stevens that the subtractive approach suggested by Mr Horak is inappropriate in these circumstances and therefore, in terms of subsection 7(1), the use of the above Holland Colours 1 and 2 trade marks is not a use of the trade marks HCA or HCA Colours.

11. Thus, when we look for evidentiary support for the Dutch company’s claims to have used its trade marks HCA and HCA Colours in Australia, the claims must fall short.  If the marketplace declarants in support of the Dutch company have attested their knowledge of the use of the letters HCA in Australia on the same basis as the declarants in JMDH and GHDH, they too are in error – but whether this is so is not clear.  It is not possible, therefore, to place much weight on the marketplace declarations.

12. In fact, the closest that the Dutch company comes to establishing use of the trade mark HCA in Australia is on bagged pigment shown in a brochure - GHDH-15 - which goods it states that it has exported to Australia.  On these bags, which I would infer from the brochure are within a factory in Hungary, the letters HCA appear in stenciled typeface on the ends of the bags – the caption to this picture states, “Pigment ready for worldwide supply”.  There is no evidence that any of these bags, or similar, ever in fact came to Australia.  There is no evidence of when the brochure was printed and thus when the goods might have been exported to Australia – the opponent cannot, therefore, hang its hat on this as establishing prior use of the trade mark HCA in Australia.  It is well established that where a party to proceedings seeks to rely on slight evidence of prior use, that use should be of high provenance: Nodoz Trade Mark (1962) RPC 1. I am unable to find, on the evidence before me, that the Dutch company has used the trade marks HCA or HCA Colours in Australia. 

13. However, even were I to accept that the evidence discussed in the prior paragraph did establish use of the trade mark HCA by the Dutch company in Australia, the lack of an identity of that trade mark and the opposed trade mark of the Australian company preclude establishment of a ground under section 58: The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407; Carnival Cruise Lines Inc. v. Sitmar Cruises Limited 31 IPR 375. Neither does the evidence establish a reputation in Australia for the trade mark HCA.

14. For the sake of completeness, I observe that one other area of weakness in the Dutch company’s evidence is the fact that it is apparent that most, if not all, of the brochures, data-sheets, company reports and so forth which are intend to support its claims as to the use of its trade marks have been sourced from Holland.  It is not shown that these have circulated in Australia.  There appears to be an underlying assumption by the Dutch company that some of these materials at least must have circulated in Australia: however, I have a degree of puzzlement, for example, as to why any of the several company reports which it has included in its evidence might have been distributed in Australia.  That said, it is impossible to discern what material has actually circulated in Australia.

    Use of trade mark 820389

15. The Australian company, of Kingsgrove, NSW, was previously known as Hodgsons Dye Agencies Pty Ltd (‘HDA’).  In 1996, a part of HDA was sold to a third party and, under the sale agreement, the name of HDA was changed to Hodgsons Colours Australia Pty Ltd.  It is apparent from the totality of the evidence that the trade mark used by the Australian company until this juncture in 1996 was that appearing below:

     
    

    The trade mark used by the Australian company immediately after the 1996 sale was:
    

     
    

16. The letters within this trade mark are the initial letters of the words Hodgsons Colours Australia and, in use, the trade mark had the words Hodgsons Colours Australia Pty Ltd appearing alongside it.  Use of this trade mark was from 1996 until 28 January 1999 when the Australian company adopted the trade mark which is here opposed.  The evolution of the trade mark from that above, to that which is opposed, appears to me to be a natural one: on the material before me, it does not appear that there was an element of bad faith in the way that the Australian company’s trade marks have evolved.  There is evidence that the Australian company knew of the Dutch company’s use of the letters ha and the intertwined word Colours as its trade mark as early as 1979, see above where it appears on a letter sent from the Dutch company to the Australian company.  It is not obvious to me that this knowledge means that the Australian company knew that the Dutch company was then using the trade marks HCA or HCA Colours.  The Australian company was aware of the Dutch company’s use of the Holland Colours 2 trade mark in 1993 – this also is established in correspondence between the parties.  In the absence of a shared identity between the  trade marks of the parties, any further discussion of this element of proceedings may not be appropriate.  Moreover, in the context of the evidence in these proceedings, it is apparent that the trade marks of both companies were in a state of evolution and I do not, in any event, regard the commonality of the letters as indicating that there has been a ‘borrowing from abroad’: Aston v Harlee Manufacturing Co (1960) 103 CLR 391, at 400, per Fullagar J.

17. However, whether there has been a ‘borrowing’ or not, it is not obvious from the evidence before me that the Dutch trade marks HCA or HCA Colours were used in Australia before the priority date. This precludes heads of opposition that the Dutch company might pursue under sections 42, 43 and 60 of the Act. As the trade marks of the parties are non-identical, and there is no evidence of use of the Dutch trade marks HCA or HCA Colours prior to the application date of 820389, section 58 is also precluded as a head of opposition that the Dutch company might pursue.

18. This leaves subsection 44(4) as a ground that can be pursued by the Dutch company.

19. I will state that the evidence leaves me with an inchoate sense that it is possible that the Dutch company has used the HCA and/or HCA Colours trade marks on which it relies in Australia.  However, when challenged to substantiate this use, the evidence provided by the Dutch company falls well short of clearly demonstrating the use with any degree of evidentiary clarity or reliability.  It is quite clearly probable that recent use (since 1993) by the Dutch company has been in relation to the Holland Colours 1 and 2 trade marks.  The use of these trade marks in Australia is not clear – the issue has been clouded by the misplaced belief that the use of the Holland Colours 1 and 2 trade mark is a use of the HCA and/or HCA Colours trade marks.

20. Thus, if the extent of the use was clearly established, the task of assessing the reputation of a particular trade mark of the Dutch company is an impossible undertaking based on the evidence which is now before me.

21. On the other side, Mr Stevens pursued grounds under section 41. He pointed to evidence that shows that many companies use the letters HCA as a part of their names or as a trade mark. I do not think, however, that the fact that another person uses an indicia as a trade mark reflects on that indicia’s inherent distinctiveness. For example, the word UNICORN might function well as a trade mark in respect of a great many different goods and services for a large number of different traders; however, the fact that a number of different traders might use the word UNICORN as a trade mark makes no impact whatsoever on its inherent capacity to distinguish. The inherent nature of the word UNICORN and its primary signification is not changed no matter how many different traders use it as a trade mark. Conversely, there is a telling observation that if someone else is using an indicia as a trade mark, then that person too believes that it can function as a trade mark.

22. I consider that the same rationale applies to the trade mark HCA.  The trade mark has no obvious signification which is evidenced in relation to dyes and pigments – it is, in the context of these proceedings, of course derived from the names of the two companies which are parties to these matters, but, beyond that, it is not seemingly needed by dye and pigment traders at large to use in relation to their goods or services.  See also the tests in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511; and, FH Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537.

23. Use of a sign as a company name is not necessarily use as a trade mark, and if it is, is subject to the same qualifications and remarks as those in the preceding paragraphs.  In short, I disagree with the submissions on behalf of the Australian company regarding the inherent distinctiveness of the opposed Dutch trade mark.  If it had emerged that the letters HCA have some specific meaning or denotation in the dye and pigment industry and the letters are thus are needed by other traders to use in relation to their goods, the position would be quite different; but it is not evidenced that the letters have any such meaning or denotation.

    The remaining issue under section 41 is the abstract assessment of the Dutch company’s HCA trade mark under the same genus of considerations as those under Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC at 634: does the fact that the HCA trade mark is a group of three initial letters disqualify it from prima facie registration on the basis that the initials might be those of an individual who could wish to use them in relation to these particular goods and services?  Mr Stevens submitted that there are clear differences between pre-acceptance and post acceptance considerations and drew my attention to both the discussion of ‘letter’ trade marks in the Examiner’s Manual and the words of French J in Registrar of Trade Marks v Woolworths [1999] FCA 1020 (29 July 1999) at paragraph 34:

    The mandatory language of s 33 and the legislative policy which informs it also suggest that the acceptance stage is not the time for the kind of detailed adversarial examination of the application that might emerge from a contested opposition.

1. Concerning ‘letter’ trade marks, the Examiner’s Manual states:

   8.1 One and two letter trade marks.

   One and two letter trade marks without significant get up are not prima facie registrable. They have a low level of inherent adaptation to distinguish. The likelihood of other traders needing to use simple unembellished combinations of one or two letters in the form of initials or abbreviations is quite high. One or two letter trade marks, unless represented in an unusual manner, possess limited inherent adaptation to distinguish and can only be registered with evidence of use in terms of subsections 41(5) and 41(6). Two letter trade marks with dictionary meanings should be examined on the basis of their definition - if they convey a descriptive meaning a ground for rejection exists, if they do not then they are capable of distinguishing. Words such as UP, NO or HE would fall in this category, whether in upper case or lower case. This is based on the UK practice as outlined in the "IQ" case (1993) 15 RPC at page 381. However the inclusion of punctuation could alter the identity of a word. U.P. would most likely be seen as letters rather than a word and therefore a ground for rejection would be applicable.

   8.2 Three or more letter trade marks

   Trade marks consisting of three or more letters are prima facie capable of distinguishing because there is likely to be less need for use of these combinations. However they will lack inherent adaptation to distinguish if they are well known acronyms or abbreviations used on or in relation to the goods and/or services concerned. The presence of punctuation marks between the letters will not usually affect treatment.

2. The approach in the Examiner’s Manual under the Trade Marks Act 1995, and the contrast with the official approach taken under the Trade Marks Act 1955, does, I consider, reflect both the changes in commerce away from a craft and trades based milieu, where traders regularly inscribed their initials on goods, and the legislative shift as regards the presumption of registrability. 

3. However, section 41 – whether before acceptance or in opposition proceedings subsequent to acceptance – looks at the inherent nature of the trade mark in question. The inherent nature of a trade mark is not altered by the fact that it has been accepted or registered: du  Cros, above.  Absent evidence that there is a tangible and realistic likelihood that other traders will, without improper motive, require or want to use a three letter trade mark for the sake of its ordinary signification in the particular trade, the trade mark ought to be regarded as having sufficient inherent adaptation to distinguish goods or services: Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511. As I have noted above, the evidence led in this regard by the Australian company appears only to establish that other traders might regard the letters HCA as being a trade mark or to otherwise function as a badge of origin.

4. The opposition by the Australian company in terms of section 41 of the Act is not established.

5. For the sake of completeness, as regards the other grounds (under section 58 and 62) pursued by the Australian company, these are not established as the trade marks are non-identical (section 58) and the ground under section 62 was founded on the verity of the Dutch company’s representation that the letters HCA are a registrable trade mark.  This also, I find, is not established.

6. These matters thus resolve themselves to a question of the appropriateness of the Australian company’s application proceeding to registration under the provisions of subsection 44(4). This subsection allows:

   (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.

   Note 1:An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).

   Note 2:For predecessor in title see section 6.

7. At the hearing, Mr Stevens submitted that the words ‘may not’ do not permit the Registrar any discretionary power in respect of the application of section 44(4).  Subject to the comments which I made at the hearing, I observe that when the Registrar follows the dicta of Kenny J in McCormick & Co Inc v McCormick 51 IPR 102, it would appear that if an opponent establishes that, because of the reputation of its trade mark, the use of an applicant’s trade mark would be likely to deceive or confuse, it should be rejected, subsection 44(4) ought to be as liable to the prevailing action of section 60 as is subsection 44(3). The words ‘may not’ within subsection 44(4) thus cannot be viewed as denying the Registrar any discretionary power. Additionally, in opposition proceedings, the process is not one where the Registrar will ‘reject’ an application in terms of subsection 44(4) – the opposition process is rather governed by section 55. The mandatory aspect of subsection 44(4) therefore applies to pre-acceptance proceedings and opposition to a trade mark accepted under those provisions might succeed on grounds based on those available under Part 5, Division 2 of the Act, per McCormick, above. 

8. However, the Dutch company has not established that any of its trade marks had a reputation in Australia at the priority date. The Dutch company could not, therefore, establish its grounds in terms of subsection 44(4) of the Act.

   Conclusion

   Section 55 of the Act provides:

   55  Decision

   Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:

   (a)       to refuse to register the trade mark; or

   (b)       to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

   having regard to the extent (if any) to which any ground on which the application was opposed has been established.

   Note: For limitations see section 6.

   The parties have not established any of the grounds of opposition on which they relied.

   The opposed trade mark applications may proceed to registration one month from the date of this decision.  If the Registrar has been served with notice/s of appeal before that time, I direct that the registration/s shall not occur until the appeal/s has been decided or discontinued.

   Each party may bear it own costs.

   Ian Thompson
   Hearings Officer
   Trade Marks Hearings

   17 August 2003

   
   

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

Note:For prescribed court see section 190.