Hunt Holdings, Inc v Xact-Design & Engineering Pty Ltd

[2009] ATMO 51

TRADE MARKS ACT 1995

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

Re:Opposition by HUNT HOLDINGS, INC to registration of trade mark application 1047511 (8) - XACT-TOOL - filed in the name of XACT-DESIGN & ENGINEERING PTY LTD.

Delegate:	Heath Wilson
Representation:	Opponent: Martin Pollock of Spruson and Ferguson Applicant: No appearance
Decision:	2009 ATMO 51 Section 52 Opposition - Grounds under sections 44, 59 and 60. Trade marks are not deceptively similar - Opposition unsuccessful and trade mark to proceed to registration - Costs awarded against opponent.

Background

1. On 22 March 2005, XACT-DESIGN & Engineering Pty Ltd (“the applicant”) applied to register the following trade mark:

   Trade mark application:      1047511
   Trade mark:  XACT-TOOL

   Goods Specification:            Class: 8 Hand tools and implements (hand operated); wrenches; spanners; screwdrivers; hand tools for applying torque; sockets and bits for use with hand tools; torque wrenches; torque multipliers; socket sets; adaptors, extensions and hand operated drivers for sockets; levers; handles for hand tools; hand-driven tools for converting rotary to/from reciprocal motion; manually operated tools and devices in this class

2. The trade mark was advertised for possible registration in the Australian Official Journal of Trade Marks on 14 July 2005. On 13 January 2006, Hunt Holdings Inc (“the opponent”) filed a notice of opposition (“the notice”) under section 52 of the Trade Marks Act 1995 (“the Act”).

3. On 13 July 2007, the applicant refined the goods in its specification to comprise:

   Class: 8 Wrenches; spanners; screwdrivers; hand tools for applying torque; sockets and bits for use with hand tools; torque wrenches; torque multipliers; socket sets; adaptors, extensions and hand operated drivers for sockets; levers; handles for hand tools; hand-driven tools for converting rotary to/from reciprocal motion

   Evidence

4. The parties filed and served evidence as set out below:

   Evidence in Support

   • Statutory Declaration of Michael Anthony Rumore dated 20 February 2007 (Exhibit MAR-1).
   • Statutory Declaration of Julio Scull dated 11 April 2007 (Exhibits JS-1 to JS-7).

   Evidence in Answer

   • Statutory Declaration of Kevin Dein dated 9 July 2007 (Exhibits KD1 to KD2)

   Evidence in Reply

   • Statutory Declaration of Shelley Marie Clarkson dated 19 September 2008 (Exhibit SMC-1)
   • Statutory Declaration of Julio Scull dated 18 September 2008

   Grounds of Opposition

5. The notice cites grounds under sections 41, 42(b), 43, 44, 58, 59, 60, 62(a) and 62(b) of the Act. At the hearing, the opponent’s attorney only pressed grounds under sections 44, 59 and 60. I address these three grounds in the following discussion and note for the sake of completeness that the other grounds in the notice are not established.

6. I heard this matter on 8 May 2009 in Sydney as a delegate of the Registrar of Trade Marks. Martin Pollock of Spruson and Ferguson, Patent and Trade Mark Attorneys appeared for the opponent. The applicant did not appear or provide written submissions.

7. To succeed, the opponent bears the onus of establishing a ground of opposition cited in the notice on the balance of probabilities (Pfizer Products Inc v Karam (2006) 70 IPR 599, per Gyles J at [6] to [26]). In order for an opposition to be successful, the opponent must establish at least one of the grounds relied upon in the notice.

   Reasons

   Section 44:

8. The relevant provisions of section 44 of the Act state:

   Identical etc. trade marks

   (1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:

   (a)the applicant’s trade mark is substantially identical with, or deceptively similar to:

   (i)a trade mark registered by another person in respect of similar goods or closely related services; or

   (ii)…; and

   (b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

9. The opponent has relied on the following trade mark registration for comparison with the applicant’s trade mark under the provisions of section 44:

TM No.	Trade Mark	Filing Date	Class / Statement of Goods
119465	3 Aug 1954	Class: 8 Knives for hobby, art and craft, and blades for such knives

1. This trade mark registration has an earlier priority date than the applicant’s trade mark. On a side-by-side comparison, the marks are not substantially identical and this was not asserted by the opponent. Therefore, in order for the section 44 ground of opposition to succeed, the applicant’s and the opponent’s trade marks would need to be deceptively similar.

Deceptively Similar

1. In Australian Woollen Mills Ltd v F. S. Walton and Company Ltd (1937) 58 CLR 641 Dixon and McTiernan JJ (at 658) set out the test for deceptive similarity:

   ‘the marks ought not …to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same … The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded.’

2. For the purposes of this comparison, the overall visual and aural similarity of the respective trade marks must be considered (Pianotist Co Ltd’s Application (1906) 23 RPC 774 (Ch D), at 777). ‘XACT-TOOL’ and ‘X-ACTO’ are trade marks that contain both visual and aural differences, and similarities. The consideration of visual similarity is of particular importance, as the opponent’s and the applicant’s goods are usually selected from display shelves without the assistance of sales staff (as in Titan Manufacturing Co Pty Ltd v John Coyne (1991) 22 IPR 613 (Reg)).

3. Visually, the trade marks have a similar prefix, being a misspelling of the word ‘exact.’ However, this is where the visual similarities end. There is a difference in the placement of the hyphen, and the word ‘Tool’ in the applicant’s mark while descriptive, further differentiates it from the invented word ‘X-ACTO’. Consumers are likely to view the applicant’s trade mark as a variation of the words ‘Exact Tool’. However, the same cannot be said for the opponent’s trade mark.

4. Additionally, the trade marks contain aural differences. The prefixes of these marks (“X-ACT” and “XACT-“) would not be pronounced differently because the hyphenation in the opponent’s trade mark appears in the natural syllable break and therefore does not affect the pronunciation. However, the suffix of the opponent’s trade mark, being the single letter ‘O’, is clearly different in pronunciation from the word ‘TOOL’. Even allowing for the fact that the applicant’s trade mark ends in a soft consonant sound which may be slurred, or truncated (as discussed in London Lubricants (1920) Ltd’s Appn (1925) 42 RPC 264 (CA UK) at 279), the overall aural difference between the marks cannot be ignored.

5. The evidence submitted by the applicant regarding the presence of other trade marks on the register containing “XACT” is noted. However, the extracted marks are either claiming different goods to the current trade mark specification, are visually different (with an alternate prefix “exact”), or contain further material to reduce possible confusion in the marketplace. Accordingly, this evidence is of little assistance in assessing the likelihood of confusion between these two trade marks.

6. The opponent’s trade mark is indexed on the Trade Marks Register as ‘fancy,’ and it is represented in a lower case font. Of itself, this might be considered of minor significance in assisting to differentiate it from the opposed trade mark. However, in combination with the other differences between the marks discussed above, the manner of stylisation creates an overall impression that the marks are not deceptively similar. That said, the issue of deceptive similarity between two trade marks needs to be assessed bearing in mind the goods actually covered by registration 119465 and the opposed application, and I will address the similarity of the goods, giving due regard to the above considerations. 

Similar Goods

1. Due to the refinement of the applicant’s specification of goods in class 8 on 13 July 2007, certain similar goods were removed from the opponent’s mark. However, it must be stated that the fact that two items are in the same class does not necessarily mean that they are the same, or of the same description (see Twentieth Century Fox Film Corp v Die Hard Pty Ltd (2001) 52 IPR 455 (Reg)). The Assistant Comptroller in Re an Application by John Crowther & Sons (Milnsbridge) Ltd (1948) 65 RPC 369 summarised the main considerations for the similarity of goods (at 372):

   ‘In the case of Jellinek’s Application (1946) 1A IPR 393; 63 RPC 59, Romer J. classified these various factors under three heads, viz, the nature of the goods, the uses thereof, and the trade channels through which they are bought and sold. No single consideration is conclusive in itself…’

2. In the first instance, the nature and use of the majority of the compared goods are different, with an exception. The applicant’s specification includes the item “handles for hand tools.” This broad claim encompasses, for example, handles for tools such as knives which are closely related to the opponent’s specification. Although the uses/functions of the goods differ, the nature of these particular goods within the applicant’s specification is therefore similar.

3. The specification of goods in the opponent’s trade mark registration is quite narrow and the goods are qualified as being for a specific purpose, being knives for hobbies, arts and crafts. Conversely, the applicant’s specification covers a wide range, and their function might be described as tools for applying torque, a quite different function from that of a knife. While both sets of goods could in principle be used on the same hardware project, goods are not necessarily of the same description because they are used in close association (“Atlas” Trade mark [1979] RPC 59). As a result, I conclude that the goods within the applicant’s specification would generally be purchased and used for a quite different purpose than would the opponent’s goods.

4. As indicated in paragraph 17 above, no single criterion will be conclusive in itself in determining whether goods are of the same description. In fact, it was the claimed similarity in ‘trade channels’ for the goods that was the main consideration argued by the opponent in this case. The fact that both sets of goods may be sold in large departmental stores is not determinative by itself because goods which are clearly dissimilar may be sold in such stores. In addition, the fact that goods are of interest to the same class of consumer does not necessarily make them goods of the same description (Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505). The opponent has submitted the declaration of Shelley Marie Clarkson (a paralegal at Spruson & Ferguson) consisting of examples of the goods in various hardware stores. Ms Clarkson’s evidence indicates that certain goods of the applicant (specifically, wrenches and spanners) and of the opponent (knives) are sold in close proximity to each other in the large departmental hardware store, Bunning’s Warehouse (Paragraph 4 and exhibit SMC-1). Nevertheless, it is also evident from Ms Clarkson’s evidence that the other small and medium hardware stores do not display knives next to what I would characterise as “traditional” hand tools.

5. The visual effect of the trade marks is important as goods in hardware stores are likely to be purchased from a shelf, rather than ordered over the phone. The goods of the applicant are designed for a different purpose, are not similar in nature, and are not always sold through similar trade channels as the opponent’s “Knives for hobby, art and craft, and blades for such knives.” While both parties’ goods may be sold in hardware or large department stores, the likely purchasers of the respective goods would be different.

6. Taking into account the overall dissimilarity between the goods and the differences between the trade marks, I find that a real and tangible danger of confusion in the marketplace between the applicant’s trade mark and that of the opponent is unlikely. I find on the balance of probabilities that the marks are not deceptively similar and that the ground of opposition under section 44 of the Act has not been established.

   Section 59:

   The registration of a trade mark may be opposed on the ground that the applicant does not intend:

   (a) to use, or authorise the use of, the trade mark in Australia; or

   (b) to assign the trade mark to a body corporate for use by the body corporate in Australia;

   in relation to the goods and/or services specified in the application.

7. Under section 59 of the Act, the opponent bears the heavy burden of establishing a prima facie case of the applicant’s lack of intention to use the trade mark. The relevant date for assessing intention to use is 13 January 2006, being the date of the opposition (Americana International Ltd v Suyen Corp (2008) 75 IPR 596). The act of filing an application for registration is prima facie evidence of the requisite intention to use the trade mark (see Aston v Harlee Manufacturing Co (1960) 103 CLR 391).

8. This initial presumption of intention can however, be rebutted by the opponent where the evidence readily gives rise to the drawing of an adverse inference and that evidence remains unchallenged and unrebutted by the applicant (See Phillip Morris Products SA v Sean Ngu [2002] ATMO 96; Sapient Australia Pty Ltd and Sapient Corporation v SAP Aktiengesellschaft (2002) 55 IPR 638). However, the mere nomination of the section 59 ground (by itself) cannot shift the onus to the applicant (Medley Distilling Co v Croakers Gully (Aust) Pty Ltd 53 IPR 430), nor can the fact that an opponent merely questions the applicant’s intention to use in its submissions.

9. If the opponent’s evidence does not give rise to an adverse inference, then the fact that the applicant has not provided any evidence of its capacity to use the trade mark does not come into consideration. In Intel Corporation v Magnatex International Pty Ltd (1998) 41 IPR 406 the hearing officer commented (at 412) that “Failure on the part of the applicant to establish its capacity to use the mark is in no sense evidence of lack of such capacity or intention.”

10. In the current matter, the applicant was put on notice prior to the hearing date that the section 59 ground was to be relied upon by the opponent and in response the applicant has made a positive statement regarding his intention to use the trade mark at the time of filing and a genuine ongoing intention to use the mark. Kevin Dein (Director of the applicant company) has stated that the applicant “intends to use the trade mark XACT-TOOL in relation to…wrenches, parts of and accessories for wrenches and screwdrivers” (Paragraph 20 of the Dein declaration).

11. The applicant has also submitted a “mock-up” of a spanner bearing the applicant’s trade mark (exhibit KD-1 of the Dein Declaration) as an indication of the intention of the applicant to use it on certain goods. While this evidence is undated and therefore cannot be used to determine the intention of the applicant at the time of opposition, I am satisfied that combined with the general presumption from filing the application and the positive sworn statement regarding that intention, it is sufficient to indicate an intention to use the trade mark for all the goods claimed.

12. The statutory declaration of Michael Anthony Rumore (Principal of Rumore & Associates, a private commercial firm engaged by the opponent) indicates that the applicant’s address is residential and that as at 20 February 2007 the applicant had not commenced trading in Dubbo, NSW, this being the applicant’s principal place of business. This does not necessarily establish that the applicant lacks the capacity to produce the tools claimed in the specification. In addition, it has been commented in the case of Aston v Harlee (supra), that mere non-use on the part of the applicant does not in itself necessarily imply a lack of intention to use the trade mark. It is not uncommon for traders to delay their use of a trade mark until opposition proceedings have been dealt with to avoid any lost expenditure on the marketing of the trade mark (see for example, Virgin Enterprises Ltd v Virgin International Pty Ltd (2006) 68 IPR 304 at 309). Therefore, I find that on the strength of this evidence, the onus has not shifted to the applicant to establish its intention to use the mark.

13. The opponent has not discharged the relevant onus of establishing a lack of intention to use the mark on the part of the applicant. On the balance of probabilities, I find that the ground of opposition under section 59 has not been established.

    Section 60:

    The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

    (a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had acquired a reputation in Australia; and

    (b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

14. As the filing date of the opposed application is 22 March 2005, the unamended provisions of section 60 of the Act (as set out above) apply.[1] As a result, it is a threshold requirement (under subsection 60(a)) that the trade marks of the applicant and the opponent be substantially identical or deceptively similar in order for a ground of opposition to be successful under this section. As addressed under the section 44 ground above, I find that the trade marks X-ACTO and XACT-TOOL are not substantially identical, nor are they deceptively similar. Accordingly, the threshold test for subsection 60(a) has not been satisfied, and the section 60 ground of opposition cannot be established.

    [1] Health World Ltd v Shin-Sun (Aust) Pty Ltd (2008) 75 IPR 478 at 112-116; Apple Computer v TodayTech Group Pty Ltd [2007] ATMO 40

    Decision

15. Section 55 of the Act provides:

    Decision

    55. 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.

16. The opponent has not established a ground of opposition in this matter in relation to trade mark application no. 1047511 “XACT-TOOL”. The trade mark application may then proceed to registration one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued.

    Costs

17. An award of costs has been requested in this matter. As the opposition has been unsuccessful, the applicant is entitled to its costs which I award against the opponent to the extent allowed under the Official Scale contained in Schedule 8 of the Trade Mark Regulations 1995.

    Heath Wilson
    Hearing Officer
    Trade Marks Hearings
    8 July 2009