Health Assist (Vic) Pty Ltd v Proline Financial Services Pty Ltd

[2002] ATMO 11

TRADE MARKS ACT 1995

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

Re:Opposition by Health Assist (Vic) Pty Ltd to registration of trade mark application 810188(36) - SURGERY NOW PAY LATER - filed in the name of Proline Financial Services Pty Ltd.

Background

On 14 October 1999, Proline Financial Services Pty Ltd ('the applicant') applied to register the trade mark SURGERY NOW PAY LATER ('the trade mark') in respect of services in class 36 of the International (Nice) Classification of Goods and Services being 'financial affairs, monetary affairs'.  Following examination the application was advertised as accepted in the Australian Official Journal of Trade Marks on 27 July 2000 for the services originally claimed. 

On 27 October 2000, within the time allowed to do so, Health Assist (Vic) Pty Ltd filed Notice of Opposition to the registration of the trade mark. The grounds of opposition were based on sections 41, 58 and 60 of the Trade Marks Act 1995 ('the Act').  The following evidence in support of the opposition was filed on 28 May 2001:

Declaration by	Dated	Exhibits
Anthony Bafunno	28 May 2001	AB-1 to AB-10
Felicity Marks	28 May 2001	FAM-1 to FAM-4

No evidence in answer has been filed. 

Both parties were notified that they were entitled to request a hearing. Neither party requested to be heard or filed any written submissions. Accordingly the matter was referred to me as a delegate of the Registrar to determine the matter as required by section 55 of the Act. The applicant is not legally represented. The opponent is represented by Phillips Fox, lawyers, of 120 Collins Street, Melbourne, Victoria 3000 ('Phillips Fox').

Factual background

The Bafunno declaration and exhibits form the basis of the opponent's case.  Mr Bafunno is chief executive officer of the opponent.  The supporting declaration is by Felicity Marks, a partner in the opponent's legal representatives, Phillips Fox.

Opponent's use of the trade mark

Mr Bafunno states the opponent first considered using the trade mark in connection with its financial services in April 1996.  Those services are the arranging and procuring of financial loans to members of the general public.  Promotional material in the form of pamphlets, posters and copy for radio advertisements was prepared at that time.  That material prominently featured the trade mark.  Exhibit AB-2 to Mr Bafunno's declaration is a copy of a colour brochure produced in July 1996 which shows such use.

Five thousand copies of the brochure were distributed by the opponent between July and September 1996.  The brochures were mailed to doctors, surgical specialists, public and private hospitals and other health care facilities.  They were also displayed in doctors' rooms, hospital waiting rooms and other public areas of hospitals and other health care facilities.  Posters featuring the trade mark were also displayed in the same areas.  In September 1996 a second brochure was prepared which also featured the trade mark. Five thousand copies of these brochures were distributed by the opponent in the same fashion as the first brochure between October and December 1996.

The third brochure to feature the trade mark was prepared in April 1998.  It forms exhibit AB-5 to Mr Bafunno's declaration.  Fifty-five thousand copies of the brochure were produced.  They were distributed by the opponent in the same fashion as the first two brochures throughout 1998 and 1999.

The opponent's services were promoted by radio.  Between August 1998 and June 1999, 602 advertisements were run on a Melbourne metropolitan radio station.  Mr Bafunno states the advertisements featured the name of the opponent as well as the trade mark. 

The opponent has spent in excess of $500,000 on advertising and marketing its services since April 1996.  Mr Bafunno states most of the advertising and marketing material featured the trade mark.  The opponent also used the trade mark on its stationery and business cards between July 1996 and December 1999. 

Mr Bafunno states the opponent has a reputation within the medical profession and health industry in Melbourne and Australia.  He also states the opponent's services offered under the trade mark are well known among surgical professionals in Australia.  However he has not provided information such as sales figures, survey evidence or supporting declarations to substantiate this.

Applicant's use of the trade mark

Mr Bafunno states he first became aware of the applicant's use of the trade mark in the second half of 1999 when it was drawn to his attention by a third party.  In April 2000 the opponent received a letter from the applicant's solicitors regarding the opponent's use of the trade mark (Exhibit AB-8).  Phillips Fox responded on the opponent's behalf (Exhibit AB-9).  They informed the applicant's solicitors that the opponent believed it was the first user of the trade mark and therefore the applicant had no valid claim to ownership.

Nature of opponent's services

Mr Bafunno states the opponent offers financial services in the health industry, particularly a low interest, short term loan to patients without health insurance and who require surgery.  That enables the patient to have surgery immediately.  The opponent pays the surgeon or the health care facility upfront.  After surgery the patient pays off the loan to the opponent.

Mr Bafunno states the opponent and the applicant offer identical services.  He believes the trade mark describes the services offered by both.  In her supporting declaration, Felicity Marks  states she also considers the trade mark to be descriptive of the services of both parties  Ms Marks is a partner of Phillips Fox and has specialised in intellectual property law and trade marks for 11 years.

Grounds

Section 41

Although not expressly stated in the Notice of Opposition two of the grounds relied upon by the opponent are based on section 41 of the Act. The Notice of Opposition states:

1.1 The opposed trade mark is descriptive of the services in relation to which the trade mark is to be used.

1.2 The opposed  trade mark is not capable of distinguishing the services of the applicant from the services of other traders in the ordinary course of business.

Subsection 41(2) of the Act reads:

(2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

The appropriate test to be applied in determining whether a trade mark is 'capable of distinguishing' was set down by Kitto J in F. H. Faulding & Son Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd., 112 CLR 537 at 555 and confirmed more recently by Wilcox J in Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) AIPC 91-539 ('CRANBERRY CLASSIC'). Kitto J said:

The question to be asked in order to test whether a word is adapted to distinguish one trader's goods from the goods of all others is whether the word is one which other traders are likely in the ordinary course of their business and without any improper motive, to desire to use upon or in connection with their goods.

Branson J in Blount Inc v Registrar of Trade Marks 40 IPR 498 ('OREGON') went through the steps required of the Registrar in deciding the question. Her Honour said the first step is that required by subsection 41(3), namely:

...to take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

Guidelines for determining inherent adaptability to distinguish are provided in Note 1 to subsection 41(6) of the Act. It reads:

Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:
(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or
(b) the time of production of goods or of the rendering of services.

Wilcox J in CRANBERRY CLASSIC found that while the above note did not have 'legislative force'...'it fairly reflects the trend of relevant judicial authority.' 

The applicant has applied to register the trade mark for services described as financial affairs and monetary affairs.  This description encompasses the services offered by the opponent, namely loans to surgery patients.  The trade mark appears to be a contraction of the expression HAVE SURGERY NOW AND PAY FOR IT LATER.  It also alludes to the well known advertising slogan, BUY NOW, PAY LATER.  When used in connection with surgery loans the trade mark has an obvious meaning.  That is, by taking out a loan with the applicant, potential candidates for surgery can undergo surgery and pay for it later.  However, the test in Note 1(a) refers to a trade mark which consists 'wholly of a sign ordinarily used to indicate the kind,...intended purpose,...or some other characteristic, of goods or services'.  I therefore need to determine whether SURGERY NOW PAY LATER is ordinarily used to indicate the applicant's services.

Kitto J in Clark Equipment Company v Registrar of Trade Marks 111 CLR 511 ('MICHIGAN') stated:

...the question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in [services] of the relevant kind and being 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 connexion with similar [services] in any manner which would infringe a registered trade mark granted in respect of it.

Applying this test in Re Application by NationsBank Corporation 45 IPR 345 Deputy Registrar Hardie found:

The essential question ... is whether the term...is a term which other [traders], actuated only by proper motives, are likely to wish to apply to their own...services, for the sake of the descriptive signification ordinarily conveyed by the words ...

SURGERY NOW PAY LATER, does describe the applicant's services.  It indicates the intended purpose of the loan, namely to pay for surgery.  However it is not a phrase that is commonly used for this purpose.  SURGERY LOANS would be the more usual or expected description.  The trade mark also provides information about when the loan is to be repaid.  However, it is again not the usual or expected description.  DEFERRED PAYMENT would be the description used most often.  In other words, the conventional or usual way of describing the applicant's services would be DEFERRED PAYMENT SURGERY LOANS.   It seems to me that, in the normal course of trade, it would be more likely for finance providers to use a term of this kind rather than the exhortation, SURGERY NOW PAY LATER. 

On this basis, I am satisfied the trade mark is not an expression that would ordinarily be used in connection with the applicant's services. However, while it might have some extent of inherent adaptation, I am not satisfied that it is capable of distinguishing on that basis alone.  Elsewhere in MICHIGAN Kitto J said:

...the more apt a word is to describe the goods, the less inherently apt it is to distinguish them as the goods of a particular manufacturer.

Although not the usual way of describing the applicant's services, SURGERY NOW PAY LATER is nevertheless an apt description.  It is an expression other traders are likely in the ordinary course of their business and without any improper motive, to desire to use in connection with their services.  In such circumstances, Branson J in OREGON states the Registrar is to consider the combined effect of the matters in subparas (i), (ii) and (iii) of subsection 41(5), namely:

(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances;

The applicant has not supplied any evidence of use or intended use of the trade mark.  Both the Bafunno and Marks declarations refer to use of the trade mark by the applicant in 1999.  However they provide no details as to the extent of that use.  Accordingly, there is no material before me on which I can assess points (ii) and (iii) above.

On these bases, I am not satisfied the trade mark is capable of distinguishing the applicant's services. Therefore the section 41 ground in the Notice of Opposition has been made out and I must reject the application as required by subsection 41(2).

Remaining grounds

As the opposition has succeeded with regard to the section 41 ground, I do not intend to deal with the remaining grounds in the Notice of Opposition which are based on sections 58 and 60 of the Act.

Decision

I have found the trade mark is not capable of distinguishing the applicant's services from those of other traders.  I therefore refuse this application. 

I make no order as to costs.

Deirdre O'Brien
Senior Examiner
Trade Marks Hearings

25 January 2002