Henkel AG & Co. KGaA.

[2015] ATMO 13

TRADE MARKS ACT 1995

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

Re:Trade mark numbers 1577467 (IR No. 1172613), 1578556 (IR No. 1173131), 1578557 (IR No. 1173132), 1583905 (IR No. 1176513), (all in classes 3, 5, 21) – SHAPE MARKS: 4 BALLS IN CONTAINER WITH HOOK DEVICE (4 Different colour combinations) - in the name of Henkel AG & Co. KGaA.

Delegate:	Claudia Murray
Representation:	Holder: Ms Tracey Berger and Mr David Wilson, both of Spruson & Ferguson, Sydney.
Decision:	2015 ATMO 13 Regulation 17A.27 – grounds for rejection under section 41(4) apply – reasonable in all the circumstances to revoke.

Background

1.     This is a decision with reasons in the matter of the revocation of acceptance for protection of four International Registrations Designating Australia (‘IRDAs’). The subject of all four IRDAs is the same shape trade mark, represented in different colour combinations, as follows:

TM No. 1577467 (IR No. 1172613)	TM No. 1578556 (IR No. 1173131)
TM No. 1578557 (IR No. 1173132)	TM No. 1583905 (IR No. 1176513)

2.     Henkel AG & Co. KGaA (‘the holder’), a German company, filed the four IRDAs on 28 May 2013, all claiming the same Convention priority date of 18 March 2013. The dates on which the Registrar was notified of the IRDAs were 29 August 2013, 5 September 2013, 5 September 2013 and 3 October 2013, respectively. All were filed in classes 3, 5 and 21 of the International (Nice) Classification of Goods and Services for the following identical statements of goods:

Class 3: Bleaching preparations and other substances for laundry use, rinsing agents for laundry and tableware, stain removing preparations; cleaning, polishing, scouring and abrasive preparations, chemical agents for cleaning metal, enameled sheet metal, wood, cork, porcelain, ceramic, glass, plastic, leather and textiles; spot remover; soaps not for personal use, perfumery, essential oils

Class 5: Disinfectants and deodorants other than for humans and animals

Class 21: Sponges, brushes, cleaning cloths, cleaning purposes, hand-operated cleaning appliances, devices for dispensing sanitary cleaning and fragrance products, partially with the addition of disinfectant, included in this class.

3.     The International Application documents were endorsed with colour claims, for ‘BLUE and YELLOW’, RED and WHITE’, ‘BLUE and GREEN’ and ‘DARK BLUE and LIGHT BLUE’ respectively.

4. Initially, full provisional refusals of protection of the IRDAs were raised in examination, under section 27 of the Trade Marks Act 1995 (‘the Act’), and regulation 4.3 of the Trade Mark Regulations 1995 (‘the Regulations’) and based upon the lack of an appropriate endorsement defining the scope of the protection sought. The examiner requested that the holder provide an accurate description of the four versions of its trade mark, for use as an endorsement. She proposed some wording which was acceptable to the holder, and the four IRDAs were then advertised as accepted for possible protection in the Australian Official Journal of Trade Marks on 18 March 2014. The IRDAs were still subject to their original colour claims, as described above, together with the following endorsement as proposed by the examiner, varied according to those respective colour claims:

The trade mark consists of the shape of a toilet rim block cage with four round compartments containing alternate blue [or red or dark blue] and yellow balls [or white or green or blue] as shown in the representations attached to the application form.

5.     Opposition to protection of the IRDAs was filed by Pental Products Pty Ltd, and the holder responded with a notice of intention to defend on 21 October 2014. However, concurrently with the commencement of the opposition process, on 22 July 2014, an Examination Team Leader wrote to the holder’s representative in Australia, notifying a proposal to revoke acceptance. She wrote:

The trade mark is not capable of distinguishing the goods of the application. The trade mark consists of the shape of a toilet block cage and blocks, with individual areas for toilet blocks and holes for water to flow through. I have taken into account that the trade mark is restricted to specific colours. However, the shape combined with the colour restriction is not, as a whole, capable of distinguishing the goods as this is a combination other traders are likely to use in the ordinary course of trade.

Therefore, having taken into account all the circumstances that existed when the IRDA was accepted, it is considered reasonable to revoke the acceptance, (section 38 of the Trade Marks Act 1995).

Hearing

6.     The holder exercised its right to be heard in relation to the revocation proposal. The hearing was held in Sydney before me, as delegate of the Registrar of Trade Marks, on 15 October 2014. Ms Tracey Berger and Mr David Wilson, both of Spruson & Ferguson, Sydney, represented the holder.

Evidence and submissions

7.     Prior to the hearing, the holder provided written submissions and a declaration for my consideration. The declaration, dated 8 October 2014 and accompanied by Exhibits 1 to 7, was made by Brecht Robert Olga Valcke, a paralegal employed by Spruson & Ferguson. The declaration describes a number of online and physical supermarket searches conducted by Mr Valcke, for the purpose of collecting examples of varieties of ‘toilet block cleaners’ and ‘dishwashing deodorisers’. Photographs of these examples have been exhibited to the declaration. Below are examples from Exhibit 3:

8.     I note from this evidence that, despite their common function, the goods of particular interest to the holder come in a quite surprising array of different shapes and sizes. I also note that their visual appearance is commonly promoted at the point of purchase, by virtue of single (or double) pack clear plastic packaging. I note too that none of the examples identified by Mr Valcke bears anything that could be called a striking similarity to the shape trade mark that is the subject of decision here.

9.     Subsequent to the hearing, examples of the holder’s actual products, as marketed in Germany, were forwarded to me, together with a list of internet addresses where I might see for myself how the holder has actively promoted its goods overseas. An example taken from one of the sites listed, at is shown below:

Mr Wilson presented the holder’s case at the hearing. He referred to the familiar tests set out in Clark Equipment Co v Registrar of Trade Marks,[1] and also referred to Kenman Kandy (Aust) Pty Ltd,[2] Global Brand Marketing Inc v YD Pty Ltd,[3] and Re Notaras.[4] He submitted that the shape trade mark subject (in different colour combinations) of his client’s IRDAs fell squarely into the same category of inherently registrable trade marks as the ‘shape of an imaginary bug’ (for confectionery) that was the subject of the Kenman Kandy decision. He argued:

The Trade Marks were filed in Australia after the introduction of the Intellectual Property Laws Amendment (Raising the Bar) Act (2012). One of the key changes to practice in Australia under 'Raising the Bar' was to reinforce the concept that a trade mark applicant is entitled to enjoy the presumption of registrability, in respect of Section 41 of the Act. This presumption of registrability should, by all rights, be extended to include any manner of registrable trade mark, including shape marks. …

The question of another trader, acting without improper motive, wishing to use the shape of the Trade Marks is key to the present matter. As demonstrated by the research conducted and detailed in the Valcke Declaration … there do not appear to be any other traders currently in the Australian marketplace using a similar shape in respect of the goods at issue. …

We submit that the applicant's choice of four balls arranged in a line is an arbitrary choice that serves no functional purpose. The applicant could equally have chosen to use three or five or any other number of spheres, oval, square or other shaped receptacle. In addition to the unique shape, the applicant had applied a specific colour combination to each of the Trade Marks.

The Trade Marks unique combination of four balls in a line, with distinct colour combinations serves to create an overall striking shape that, when viewed in the context of the marketplace and the goods at issue, has clearly been coined in order to differentiate the goods of the Applicant from those being offered by other traders. …

The only traders who might wish to utilise a similar trade mark would be acting with improper motive. There is no functional purpose to having four specifically coloured balls in a line as part of a toilet cleaning block. There is, therefore, no legitimate reason for any other trader to wish to utilise the applicant's Trade Marks. …

We submit that the Trade Marks are striking, possessing extra elements that are distinct from the inherent form of toilet cleaning blocks, differ significantly from any similar goods being offered in the Australian marketplace, and that the overall Trade Marks are not only functional but also visually appealing to a consumer and, therefore, are inherently registrable.

[1] (1964) 111 CLR 511 at 555.

[2] (2004) 64 IPR 218.

[3] (2008) 76 IPR 161.

[4] (2013) 104 IPR 421).

10.     Mr Wilson further submitted that, in the event that there were other traders in the marketplace wishing to use any such similarly shaped goods, the most appropriate forum for the issues to be tested would be in opposition, which ‘are a far better means of determining such matters’. Regarding the question of revocation, he continued:

In this matter, we submit that there has not been any evidence brought before the Registrar to satisfy her that revocation is appropriate. The Trade Marks were the subject of initial provisional refusals, raising grounds for objection pursuant to section 27, these grounds were appropriately addressed and the Trade Marks accepted for registration.

At no point during the examination, re-examination and acceptance of the Trade Marks for registration, were any obvious errors made by the Examiner in respect of the research that he/she is required to conduct, citation objections that were missed or any information provided to the Registrar that was outside of that available to the Examiner through the available Trade Marks Office resources at the time that the Trade Marks were initially accepted for registration.

The Trade Marks Office was correct in accepting the Trade Marks for registration. Acceptance should not be revoked as the Trade Marks are capable of distinguishing the applicant's goods.

The legislation

11.     I should note here, as I did at the hearing that, while the two provisions are worded in close to identical terms, the relevant revocation of acceptance provision applying to IRDAs, rather than domestic trade mark applications, is regulation 17A.27. It is located in the Regulations at ‘Part 17A – Protected international trade marks under the Madrid Protocol’, and provides:

17A.27 Revocation of acceptance

(1) If, before the trade mark that is the subject of the IRDA becomes a protected international trade mark, and before the end of 18 months after the International Bureau notified the Registrar of the IRDA, the Registrar becomes satisfied that:

(a) the IRDA should not have been accepted, taking account of all the circumstances that existed when the IRDA was accepted (whether or not the Registrar knew then of their existence); and

(b) it is reasonable to revoke the acceptance, taking account of all the circumstances;

the Registrar may revoke the acceptance of the IRDA.

(2) If the Registrar revokes the acceptance of the IRDA:

(a) the IRDA is taken never to have been accepted; and

(b) this Subdivision again applies in relation to the IRDA.

12.     An important difference between the domestic and IRDA provisions lies in the reference to the additional time limit, of ‘before the end of 18 months after the International Bureau notified the Registrar of the IRDA’, within which the Registrar may revoke acceptance of an IRDA. This time limit is imposed by the Protocol Relating to the Madrid Agreement concerning the International Registration of Marks (‘the Madrid Protocol’) and is an additional requirement to that applied to domestic trade marks. Section 38 of the Act specifies that domestic trade marks may be revoked up until the trade mark is registered. I will return to this point later.

13. Another point of note in relation to the relevant legislation, as Mr Wilson correctly pointed out, is that the wording of section 41 of the Act changed with the commencement of the ‘Raising the Bar’ Act in April 2013.[5] The new wording of section 41, as applied here to International Registrations by regulation 17A.28, relevantly provides:

[5] The Intellectual Property Laws Amendment (Raising the Bar) Act2012 came into full effect on 15 April 2013. The Act repealed section 41 of the Trade Marks Act 1995 and substituted it with a new section 41.

41 Trade mark not distinguishing applicant’s goods or services

(1) 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 (the designated goods or services) from the goods or services of other persons.

Note: For goods of a person and services of a person see section 6.

(2) A trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons only if either subsection (3) or (4) applies to the trade mark.

(3) This subsection applies to a trade mark if:

(a) the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and

(b) the applicant has not used the trade mark before the filing date in respect of the application to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant.

(4) This subsection applies to a trade mark if:

(a) the trade mark is, to some extent, but not sufficiently, inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and

(b) the trade mark does not and will not distinguish the designated goods or services as being those of the applicant having regard to the combined effect of the following:

(i) the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of other persons;

(ii) the use, or intended use, of the trade mark by the applicant;

(iii) any other circumstances.

Note 1: 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.

Note 2: For goods of a person and services of a person see section 6.

Note 3: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (5) and 7(3) and section 8).

Discussion

Circumstances existed that should have prevented acceptance

14.     For the purposes of the first requirement set out in regulation 17A.27(1)(a), I must be satisfied that the IRDAs should not have been accepted - taking into account all the circumstances that existed at the time. I am so satisfied. Despite Mr Wilson’s submissions upon the inherent capacity of the holder’s shape trade mark to distinguish its goods, I cannot agree that a ground for rejection did not exist against all four IRDAs at the time they were accepted for protection.

15.     Sundberg J, in Chocolaterie Guylian,[6] had this to say upon the question:

The ultimate question on the issue of inherent adaptation is whether a sign - in this case, a shape - possesses any ordinary significations and, if it does, whether or not other traders might think of the shape and want to use it for those ordinary significations in a manner which would infringe a registered mark in respect of the sign. In cases where a shape depicts a known object or concept (cf. wholly concocted or ambiguous shapes), and is therefore likely to signify the same to most if not all consumers, then a subsidiary question is whether the shape is nevertheless sufficiently distinctive or unique so that other traders wishing to represent the same or a similar concept will remain free to do so without infringing the mark, that is, without requiring use of the same shape or one substantially identical or deceptively similar. An important consideration in all of this is the nature of the goods for which the shape mark is to be used.

[6] Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891 (18 August 2009) at [75].

16.     In this case, the goods are inextricably bound together with the shape mark intended to identify them. And I cannot agree with Mr Wilson that the end product is in the nature of what Sundberg J has called a ‘wholly concocted or ambiguous shape’. As the Examination Team Leader rightly pointed out in her letter of proposed revocation, ‘the trade mark consists of the shape of a toilet block cage and blocks, with individual areas for toilet blocks and holes for water to flow through’. Although Mr Valcke’s declaration suggests that, at present, the market is not flushed with similar products fashioned in similar shapes, that is not the test to be applied when considering the shape’s prima facie capacity to function as a trade mark in that market. In Philmac Pty Limited v The Registrar of Trade Marks[7] Mansfield J made these observations about the considerations in terms of section 41 against which trade marks such as this should be tested:

Importantly, the question of whether a mark is inherently adapted to distinguish certain goods must be considered independently of the effect of its use and registration: see generally DR Shanahan; Australian Law of Trade Marks and Passing Off, Law Book Company 1990, p 121. In `Weldmesh' Trade Mark [1966] RPC 220 at 228 "inherently adapted" was said to mean "adapted of itself, standing on its own feet". That is a different concept from the capability of a mark to distinguish a trader's goods or services once registration is achieved and other persons are thereby precluded from using it …

I have little doubt that the Philmac mark would indeed distinguish Philmac's goods from those of other traders if it were registered as a mark and other manufacturers were thereby precluded from using it in relation to the designated goods. But that is not presently the question for consideration. Stating the question in that way does no more than state that by securing a monopoly in a phrase, colour, smell or any other sign, a trader would, in using that sign, distinguish its goods or services from those of other traders. Whether a mark is capable of registration under the Act and by virtue of s 41(2) and (3) is a conceptually distinct question.[8]

[7] [2002] FCA 1551 (13 December 2002); (2002) 126 FCR 525; 56 IPR 452; [2003] AIPC 91-841.

[8] [2002] FCA 1551 (13 December 2002), at [44], [46].

17.     Of course, the wording and construction of section 41 has changed since these words were written. However, the principle endures that only trade marks sufficiently inherently adapted to ‘stand on their own feet’, without more, are entitled to avoid scrutiny under section 41. The Trade Marks Office Manual of Practice and Procedure, at Part 22, Section 2.2, says:

Section 41 was repealed and re-enacted by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012. The changes to section 41 clarify that the presumption of registrability does apply to section 41. As stated in the Explanatory Memorandum, Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 at page 146:

The changes are intended to clarify that the presumption of registrability, as provided for in section 33, does apply to section 41. This is achieved by removing the reference to the decision-making process in section 41, and instead focusing on the characteristics that a mark must possess for it to be capable of distinguishing. The intention is that, if the Registrar is equally unsure of whether the mark is or is not capable of distinguishing, that doubt should be resolved in the applicant’s favour.

To ensure that the presumption of registrability applies, the criteria for the trade mark’s capacity to distinguish are framed negatively by defining the circumstances in which a trade mark is not capable of distinguishing. Consistent with the presumption, this will focus the Registrar’s enquiry on what must be wrong with the mark before the Registrar is entitled to reject it.

Note that while the amendment ensures that the onus rests with the Registrar during examination, it is not intended to require that the trade mark should clearly not be registered. Rather, as with other grounds it is intended that the delegate need only be satisfied that a ground exists on the balance of probabilities.

18.     Focusing here on what is, (as the Explanatory Memorandum has put it) ‘wrong with the mark’ I consider that the highly functional nature of the holder’s trade mark certainly precludes it from ‘standing on its own feet’ in the market. This is notwithstanding its presentation in four separate colour combinations. It closely approaches the category described in the explanatory first note to subsections 41(3) and (4), and envisaged by Jacob J in British Sugar PLC v James Robertson & Sons Ltd when he said:

The phrase [‘devoid of any distinctive character’] requires consideration of the mark on its own assuming no use. It is the sort of word (or other sign) which cannot do the job of distinguishing without first educating the public that it is a trade mark.[9]

[9] [1996] RPC 281 at 306 in relation to s. 3 (1) (b) of the Trade Marks Act 1994 (U.K).

19.     Mr Wilson, in arguing the holder’s case that having functional aspects or elements need not be fatal to protection of a shape trade mark, drew my attention to the observations of Hearing Officer Heath Wilson in Re Notaras.[10] Those observations are relevant here:

Nevertheless, it must be remembered that the assessment of a trade mark under section 41 is not of its particular features in isolation, but of the trade mark as a whole. In this regard, the overall shape of this bulbous coffee machine is stylized and striking, obviously made in such a way as to not only be functional, but also visually appealing to the consumer. To a certain extent, this sets it apart from its functional features and somewhat distinguishes the Trade Mark. I find that the appearance of the overall shape is to assist in distinguishing this coffee maker from those of other traders. Accordingly, I find that the Trade Mark should be assessed under the provisions of s41(5) rather than s41(6) of the Act.[11]

[10] (2013) 104 IPR 421; Irene Notaras [2013] ATMO 98 (25 November 2013).

[11] Ibid. at [24].

20.     While I hesitate to compare toilet sanitisers with coffee makers, it is fair to say that there is also a small but recognizable aspect of visual appeal, separate from its rather mundane function, present in the shape trade mark at issue here. While the holder’s submissions have not persuaded me that this shape is sufficient of itself to distinguish the holder’s goods from those of others, I consider it emanates a sufficient whiff of inherent capacity to distinguish to allow it to be assessed in terms of what is now subsection 41(4), rather than the current subsection 41(3).[12]

[12] See, for example Freelife International Holdings LLC [2009] ATMO 45 (30 June 2009) at [20]; Gregory Paul Roebuck v News Limited [2014] ATMO 19 (27 February 2014) at [34] to [36]; and compare Woolworths Limited v BP p.l.c. [2013] ATMO 61 (8 August 2013) at [26].

21.     I am satisfied that a ground for rejection existed, in terms of subsection 41(4), against all four IRDAs at the time they were accepted for protection, and that it continues to exist. Accordingly, the IRDAs should not have been accepted without that ground being raised, and an opportunity afforded to the holder to meet the relevant criteria and demonstrate via evidence or other circumstances that its shape trade mark is, on the balance of probabilities, protectable trade mark material. The first limb of regulation 17A.27(1) has been met.

Reasonable in all the circumstances to revoke acceptance

22.     The second limb of regulation 17A.27(1) requires me to be also satisfied that, taking into account all of the circumstances, it is reasonable for me to now revoke acceptance of the IRDAs. Mr Wilson’s submissions were not persuasive upon this point either. Beyond reiterating that the ground for rejection was not raised earlier, he raised no new arguments that might, despite my having established the existence of that ground, still have given me pause in finding it reasonable to revoke acceptance for protection, and return the IRDAs to examination. However, he did confirm that, should this assist the holder, it was prepared to restrict its goods to exclude the references to ‘perfumery, essential oils’ in Class 5 and ‘Sponges, brushes, cleaning cloths, cleaning purposes, hand-operated cleaning appliances’ in Class 21. I do not find this proposal to be at all persuasive under the circumstances.

23.     Mr Wilson also briefly argued that, for the purposes of the second limb of regulation 17A.27(1), the status of any opposition proceedings which may already have commenced against an application is a relevant circumstance.[13] I note that opposition by Pental Products Pty Ltd is now on foot against all four IRDAs, and I agree that the status of the opposition should be taken into account. However, proceedings have not progressed to a great extent, and evidence has not yet been exchanged. Further, while section 41 was nominated by the opponent as a ground of opposition, it was not the only ground raised, and it is possible that it might not have been fully addressed during the opposition process.

[13] See, for example, Jack Grieve [2010] ATMO 12 (25 January 2010); Cooley Investments Pty Ltd [2011] ATMO 7 (20 January 2011).

24.     Taking into account the circumstances I have described, it is appropriate that acceptance for protection is revoked. Arguably, it is in the best interests of the holder, as well as its potential opponent, that the IRDAs be returned to, and tested by, the appropriate examination processes which have hitherto been omitted. They may then proceed, should this ultimately prove necessary, to the escalation of argument and expense associated with the adversarial forum of opposition. While the holder understandably may not view it as an ideal option, revocation of acceptance need not be fatal to the IRDAs. The provisions of subsection 41(4) will be available to the holder, over the new fifteen month period allowed for it to put the IRDAs into order.

25.     Finally, it is an important public interest, and therefore also a relevant circumstance in this matter that, wherever possible, the proper examination processes of the Office are consistently maintained. Revocation of acceptance of the IRDAs, allowing the valid ground for rejection to be raised, will serve that interest.

Before protection and the end of eighteen months

26.     As I observed earlier, the provisions of regulation 17A.27(1) require that the Registrar may only revoke acceptance for protection ‘before the trade mark that is the subject of the IRDA becomes a protected international trade mark, and before the end of 18 months after the International Bureau notified the Registrar of the IRDA’. In this instance, the IRDAs have not yet become protected, and will all be within eighteen months of their relevant notification dates as at the date of revocation.

Decision

1. I am satisfied, in terms of regulation 17A.27, that the subject IRDAs should not have been accepted, and that it is reasonable in all the circumstances to revoke their acceptance. Accordingly, I revoke acceptance for protection of trade marks numbered 1577467, 1578556, 1578557 and 1583905.

   Claudia Murray
   Hearing Officer
   Trade Marks Hearings
   4 February 2015