INDITEX, S.A..

[2024] ATMO 11

TRADE MARKS ACT 1995

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

ReInternational Registration 1463984 (43) - Australian Trade Mark Application number 2006726 (43) – ZARA - in the name of INDITEX, S.A..

Delegate:	Nicholas Smith
Representation:	Holder: Shauna Ross of Counsel instructed by IP SOLVED (ANZ) Pty Ltd
Decision:	2024 ATMO 11 Regulation 17A.24: final decision on examination – consideration of section 41 of the Trade Marks Act 1995 – IRDA has no inherent adaptation to distinguish – insufficient evidence of use provided – extension of protection refused

Background

1. On 29 March 2019, INDITEX, S.A. (‘Holder’) applied to extend protection to Australia of International Registration 1463984 under the provisions of the Trade Marks Act 1995 (‘Act’) and Trade Marks Regulations 1995 (‘Regulations’).  Such an application is referred to as an International Registration Designating Australia (‘IRDA’).  The current details of the IRDA appear below:

Application No.:	2006726
International Reg.	1463984
Filing Date:	29 March 2019
Priority Date	25 March 2019
Services:	Class 43: Services for providing food and beverages; temporary accommodation; restaurant services; self-service restaurant services; catering services; cafeteria services; bar services; snack bar services; coffee shop services; canteen services; hotel services; tourist home services; motel services; boarding house services; day-care centers; rental of meeting rooms; rental of chairs, tables, table linen and glassware. (‘Holder’s Services’)
Trade Mark:	ZARA	(‘Trade Mark’)

1. The IRDA was examined as required under reg 17A.12 of the Regulations. On 3 September 2019 IP Australia issued a first adverse examination report which amounted to a Notification of Provisional Refusal of the IRDA, identifying a ground for rejection pursuant to s 41 of the Act in respect of the Holder’s Services (‘First Report’)[1]. With respect to the s 41 ground, the examiner stated that the Trade Mark is not capable of distinguishing the specified services because the term ZARA is the name of a town in New South Wales, a town in Turkey, and the Italian name of a town in Croatia, and that other traders should be able to use the geographical name ZARA in connection with the Holder’s Services, which are a type of services that may be offered to consumers in any geographical location.

   [1] The report also identified a ground for rejection pursuant to s 44 of the Act however that ground has subsequently been resolved as part of the examination process and does not require further discussion.

2. Between September 2019 and September 2023, the Holder and this office engaged in further correspondence with IP Australia issuing five further examination reports maintaining the s 41 ground for rejection in respect of the Holder’s Services, though limiting the specific objection to the fact that Zara is the name of a town in NSW. The Holder then requested to be heard by the Registrar of Trade Marks under reg 17A.17 of the Regulations.

3. This matter was listed for hearing on 5 December 2023.  On that day the Holder filed written submissions that supplement the earlier submissions made by the Holder to the examiner (‘Holder’s Submissions’).  The Holder’s Submissions indicated that they would rely on the evidence previously filed in this matter, being a declaration of Javier Monteoliva Diaz, General Counsel of the Opponent dated 22 March 2023 with Exhibits 1-28 and Confidential Exhibit A (‘Diaz Declaration’).  The Holder also filed additional evidence in this matter being a declaration of Brian Nicholas Shortt, Legal Representative of the Holder dated 4 September 2023 with Exhibits 1-13 (‘Shortt Declaration’).  At the hearing Shauna Ross of Counsel instructed by Tim Marshall of IP SOLVED (ANZ) Pty Ltd made further oral submissions to support the Holder’s Submissions. 

4. The present matter is a hearing under reg 17A.17 (which is similar in nature to a request for hearing under s 33(4) of the Act). As noted in MHFC Holdings Pty Ltd[2]  as well as other decisions of the Registrar (Teraglow Pty Ltd[3] and TOM Organic Pty Ltd[4]), the purpose of such a hearing is not a review of the examiner’s decision but rather a fresh consideration of the ground for rejection, in this case the ground for rejection under s 41 of the Act. Any decision I shall make is not a review of the examiner’s approach and I am not bound in any way to follow it. Rather this proceeding will consider afresh the s 41 ground for rejection under this Act as it applies to the IRDA for the Holder’s Services.

   [2] [2016] ATMO 96, [9] (Hearing Officer Wilson).

   [3] [2016] ATMO 32 (Hearing Officer Worth).

   [4] [2018] ATMO 46 (Hearing Officer Worth).

   Legislative framework

5. Reg 17A.24 of the Regulations provides that:

   (1)The Registrar must, after the examination, accept the IRDA unless he or she is satisfied that:

   (a)it is not in accordance with this Division; or

   (b)there are grounds for rejecting it.

   …

   (3)The Registrar must reject an IRDA, in whole or in part, if the Registrar is satisfied that:

   (a)it is not in accordance with this Division; or

   (b)there are grounds for rejecting it, in whole or in part.

6. Regarding the present application, the only unresolved ground for rejection identified is under s 41 of the Act. The capacity of the Trade Mark to distinguish the Holder’s Services must be assessed at the filing date, being 29 March 2019 (‘relevant date’) however evidence of use after that day may be relevant, to the extent that such evidence can illustrate factors in place at the relevant date.[5]

   [5] Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd [2004] FCA 968, [32] (Finn J).

7. Section 41 of the Act provides:

   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).

   (5)For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

   Note 1: For applicant and predecessor in title see section 6.

   Note 2: If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

8. With respect to s 41 it is appropriate to discuss the ‘presumption of registrability’. As was explained by the Hearing Officer in Unilever plc v Beiersdorf AG with respect to s 33 of the Act, which corresponds to Reg 17A.24:

   Section 33 of the Act states that the Registrar must accept an application unless satisfied that it has not been made in accordance with the Act, (which is not relevant here), or that there are grounds under the Act for rejecting it. In this regard s 33 embodies what is often referred to as a ‘presumption of registrability.’ As was explained in Blount Inc v Registrar of Trade Marks[6] (‘Oregon’), however, prior to the [Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (“the Amending Act”)] ss 41(5) and (6) as they then were, (which essentially correspond to current ss 41(4) and (3) respectively), effectively shifted the onus onto an applicant. Section 41 was thus amended to address that inconsistency, with the Explanatory Memorandum to the Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (‘the EM’) stating at page 146:

   [6] (1998) 40 IPR 498, 505 (Branson J).

   The changes are intended to clarify that the presumption of registrability, as provided for in section 33, does apply to section 41. … 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.

   The Amending Act was not however intended to alter the relevant standard for registrability. In this regard the EM goes on to state (also at page 146):

   Note that while the amendment [to s 41] 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.

   The amendments are not meant to alter the key concepts of “inherently adapted to distinguish”, “capable of distinguishing” and “does or will distinguish”.  The judicial tests for these terms are settled and the amendments are not intended to change the legal concept of a trade mark distinguishing the applicant’s goods or services from others.

   Branson J’s analysis at 504 in Oregon of the operation of s 41 as it stood prior to the Amending Act, as paraphrased below, also remains apt in relation to the amended section:

   Having taken [the extent of inherent adaptation] into account, it is theoretically open to [me] to conclude:

   (a) that the [Trade Mark] is inherently adapted to distinguish the [Applicant’s Services] from the goods or services of other persons and capable, on that basis alone, of so distinguishing the [Applicant’s Services]; [that is, neither s 41(3) nor s 41(4) applies] or

   (b) that the [Trade Mark] is not to any extent inherently adapted to distinguish the [Applicant’s Services] from the goods or services of other persons; [that is, s 41(3) applies] or

   (c) that the [Trade Mark] is to some extent inherently adapted to distinguish the [Applicant’s Services] from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the [Applicant’s Services]. [that is, s 41(4) applies][7]

   [7] [2017] ATMO 25, [38]-[40] (Hearing Officer Kirov).

9. In Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd, the Full Court summarised the principles in respect of s 41 as follows:

   (1) In deciding whether or not a trade mark is capable of distinguishing the designated services from the service of others, the first question is the extent to which the trade mark is inherently adapted to distinguish the designated services from those of others: s 41(2) and (3).

   (2) In determining whether a trade mark is inherently adapted to distinguish the services of a trader, the answer largely depends upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their goods: Clark Equipment Co v Registrar of Trade Marks (“Clark Equipment”) [1964] HCA 55; (1964) 111 CLR 511 per Kitto J at 514.
   
   (3) The question of whether a trade mark is adapted to distinguish the services of the applicant is to be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives (in the exercise 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 the words ordinarily possess) will think of the word and want to use it in connection with similar goods in any manner which would infringe the trade mark once registered: Clark Equipment at 514.

   (4) Directly descriptive words, like geographical names, are not prima facie suitable for the grant of a monopoly conferred by registration of a trade mark because use of them, as trade marks, will “rarely eclipse” their “primary” (that is, their ordinary) signification. Such words (or a word) are unlikely to be inherently, that is to say, “in [their] own nature”, adapted to distinguish the applicant’s goods. Traders may legitimately want to use such words in connection with their goods or services “because of the reference they are ‘inherently adapted to make’ to those goods”: Cantarella Bros Pty Limited v Modena Trading Pty Limited (“Cantarella”) [2014] HCA 48; (2014) 254 CLR 337 at [57] per French CJ, Hayne, Crennan and Kiefel JJ.

   (5) The principles derived from the observations of Kitto J in Clark Equipment apply with as much force to directly descriptive words as they do to words which are, according to their ordinary signification, geographical names: Cantarella at [57].
   
   (6) In determining whether a word is (or words are) inherently adapted to distinguish the goods or services of an applicant, the question is to be examined from the point of view of the “possible impairment” of the rights of “honest traders” and from the “point of view of the public”: Cantarella at [59].
   
   (7) In determining whether a word contains (or words contain) a “direct reference” to the relevant goods or services (and thus prima facie not registrable as a trade mark) or whether the word (or words) makes a “covert and skilful allusion” to the relevant goods or services (and thus prima facie registrable as a trade mark), the “ordinary signification” of the word or words to persons who will purchase, consume or trade in the goods or services, must be considered: Cantarella at [59].
   
   (8) Where the question is whether there are other traders who may legitimately want to use or apply a word or words in connection with their goods or services (other than a geographical name or a surname), the test refers to the “legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods”: Cantarella at [59].

   (9) Consistent with the proposition at (7), the test described at (8) does not encompass the desire of other traders to use a word or words which in relation to the goods or services are “allusive or metaphorical”: Cantarella at [59].

   (10) In determining whether a trade mark is inherently adapted to distinguish the designated goods or services for the purposes of s 41(3), the ordinary signification of the word or words are to be considered from the perspective of “any person in Australia concerned with the goods or services to which the trade mark is to be applied”: Cantarella at [70].

   (11) Consideration of the “ordinary signification” of any word or words said to constitute a trade mark is “crucial”: Cantarella at [71]. That is so whether the word (or words) is said not to be registrable because: it is not an invented word and has direct reference to the character or quality of the goods or services; or, the word is laudatory; or, the word is a geographical name; or, the word has either lost its distinctiveness or it never had the requisite distinctiveness from the outset: Cantarella at [71].

   (12) The process of reasoning in addressing s 41(3) of the Act involves first identifying the “ordinary signification” of the word in question and then undertaking an enquiry into whether other traders might legitimately need to use the word in respect of their goods: Cantarella at [71]. If a word contains an allusive reference to goods or services it is, prima facie, qualified for the grant of a monopoly as a trade mark under the Act. If, on the other hand, the word is understood, by the target audience, as having a directly descriptive meaning in relation to relevant goods or services then, prima facie, the proprietor is not entitled to a monopoly in respect of the word. As a general proposition, a word or words which are prima facie entitled to a monopoly secured by registration as a trade mark under the Act, according to this method, are inherently adapted to distinguish: Cantarella at [71].[8]

   [8] [2017] FCAFC 56, [236] (Greenwood, Besanko and Katzmann JJ).

10. As noted in paragraph 6 above, the process I am required to undertake is not a review of the examiner’s reasoning.  However, it is useful to understand how the examiner considered the question of inherent adaption to distinguish in respect of the Trade Mark. I note that IP Australia’s practice in respect of geographical names is that a Trade Mark that is the name of a place with the potential to have a connection with the goods or services is not prima facie registrable.  This principle is well supported in case law.  In Clark Equipment, Justice Kitto stated:

    … the name of a place or of an area, whether it be a district or a county, a state or a country, can hardly ever be adapted to distinguish one person's goods from the goods of others when used simpliciter or with no addition save a description or designation of the goods, if the goods of the kind are produced at the place or in the area or if it is reasonable to suppose that such goods may in the future be produced there. In such a case, the name is plainly not inherently, i.e. in its own nature, adapted to distinguish the applicant's goods... [9]

    Similarly, in Oxford University Press v Registrar of Trade Marks, Gummow J stated:

    The point is if goods of the kind in question are produced at the particular place or in the area, or if it is reasonable to suppose that such goods in the future will be produced there, other traders have a legitimate interest in using the geographical name to identify their goods, and it is this interest which is not to be supplanted by permitting any one trader to effect trade mark registration.[10]

    [9] Clark Equipment (n 8) [7] (Kitto J).

    [10] [1990] FCA 175, [41].

11. The Holder’s submissions in respect of s41 are summarised below:

    ·While the trade mark contains a reference to the geographical location Zara, Zara is a small rural location within the Tweed LGA with a recorded population of 87 residents that does not have its own postcode.     

    ·The Holder has been using the Trade Mark in respect of clothing goods and clothing retail services internationally since 1975 and in Australia since 2011 and has developed a considerable reputation in the Trade Mark for these services.

    ·The Holder has been using the Trade Mark for the Holder’s Services since 1995 as it has operated a café in its store in Brussels since that date.  It has also operated a food truck in New York since 2019 and opened cafés in stores in Madrid and London in 2022.

    ·The Holder intends to extend its brand and such collaborations are becoming increasingly more common as the Holder is engaging in various types of collaborations with third parties in the food space.

1. As noted in the case law quoted, the first step is to determine the ordinary signification of the trade mark and whether traders for the Holder’s Services will want to use it for its ordinary signification. If I am satisfied that the Trade Mark itself does not operate by itself to distinguish the Holder’s Services (that is s 41(3) or 41(4) applies) then I must consider the evidence or use or other circumstances to determine if the mark is otherwise registrable.

2. I am satisfied that the ordinary signification of the Trade Mark is the geographical location in NSW.  The Holder has not identified any other meaning of the Trade Mark relevant to my consideration.[11] Furthermore the Holder’s Services, being services related to hospitality, are precisely the type of services that would be provided in small country localities and are the type of services where the name of that town is likely to be desired to be used, in the normal course of trade, without improper motive, by other traders to describe the origin of their similar goods or services – for example for the ‘Zara Hotel’, the ‘Zara Roadhouse’ or the ‘Zara Café’. Following the case law set out at paragraph 11 above and note 1 to s 41 I am satisfied that the Trade Mark is not to any extent inherently adapted to distinguish the Holder’s Services from those of other persons. Accordingly, I am satisfied that the Trade Mark should be considered under s 41(3).

   [11] The Holder identified that the Trade Mark could be used for a name but acknowledged that such a name was relatively uncommon, moreover the fact that a word could be used as a personal name does not imbue such a word with a separate meaning to its descriptive meaning, namely the geographical town in NSW.

3. Specifically I am not persuaded by the Holder’s submission that the fact that the geographical location Zara has a small number of residents provides the Trade Mark with any particular distinctiveness; were the Holder’s Services unlikely to be produced in a region with such a limited population such an argument may have merit, but the nature of the Holder’s Services mean that, as noted above, it is entirely plausible that the Holder’s Services have or could be produced in the geographical region.  Nor am I persuaded that the absence of a dictionary definition of the term means that it lacks ordinary signification; geographical terms are not always represented in dictionaries and the present case it is not in dispute there is a locality known as Zara in New South Wales. 

4. Finally, I am unpersuaded that, by reason of the reputation that the Holder holds in the Trade Mark for services not closely related to the Holder’s Services, this renders the Trade Mark inherently adapted to distinguish. Zara is a geographical term and the case law with respect of geographical terms is clear; the Holder has been unable to identify any case where a geographical term had such use by a third party as a mark that it ceased to operate as a descriptive geographical term for the purposes of determining the level of descriptiveness of the mark; rather such considerations are a matter for the second part of the test under s 41 and are addressed later in the decision.

5. The Holder has referred to another recent decision of this office where a mark containing the name of a small town was not found to be descriptive.  That case[12], involving the trade mark CYGNET WEST, can be easily distinguished from this one; specifically the mark itself did not refer to a geographical feature (there being at town of Cygnet, but no evidence of a locality known as Cygnet West), there was an alternate dictionary meaning of Cygnet and the services themselves, in contrast to the Holder’s Services, were not services that would necessarily be produced in a small town.  As noted in the paragraph above, I have not been taken to authority that a geographical term sought to be registered for services that are often provided in a small town ceases to be descriptive if the town is below a particular size.[13]

   [12] Colliers International (WA) Pty Ltd [2022] ATMO 37 (Hearing Officer Smith).

   [13] To counsel’s credit, I was referred to Magnolia Metal Company [1897] 2 CH 371, which contains the broad statement that an objection should not be raised ‘simply because some place upon the earth’s surface had been called it’, however this is insufficient to overturn the clear line of authority set out in paragraph 11 of this decision.  Furthermore, that case concerned manufacturing products, which are unlikely to be provided in a small geographical locality, rather than the Holder’s Services.

6. As the Trade Mark is not to any extent inherently adapted to distinguish the Holder’s Services, the Trade Mark must be rejected unless the evidence before me establishes that the Holder has used the Trade Mark before the filing date to such an extent that the Trade Mark does in fact distinguish the Holder’s Services as being those of the Holder.  To establish that a sign which is not to any extent inherently adapted to distinguish does in fact distinguish typically requires evidence of extensive widespread use and exposure to the Australian public of that Trade Mark over a long period of time and this use must have occurred before the filing date.

7. Use as a trade mark is:

   [U]se of the mark as a ‘badge of origin’ in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods.[14]

   [14] Coca-Cola v All-Fect Distributors Ltd [1999] FCA 1721 [19].

8. The Holder gives evidence of use in the Diaz declaration and to a lesser extent the Shortt Declaration.  It is not necessary to summarise the Diaz declaration in any significant way as I am entirely satisfied by the material in the Diaz declaration that the Holder has a very substantial reputation in and made considerable use of the Trade Mark in the field of clothing and clothing retail (and related goods and services) internationally since 1975 and in Australia since 2011.  I am unsatisfied that that reputation in the Trade Mark extended to the Holder’s Services in any way; there is no evidence of use of the Trade Mark for the Holder’s Services in Australia and evidence internationally is of a minor nature. 

9. The Shortt declaration provides evidence, amongst other things, of the Holder’s intention to extend its brand and the increased degree of collaboration between the Holder and third parties in the food space (as well as other collaborations between the fashion and hospitality industry). The Diaz declaration provides similar evidence including the role of brand extension, the use of recipes and images of food in connection with the Trade Mark and that modern day consumers are cognisant of brand extension. This material may be relevant to consideration under s 41(4)(b)(ii) and (iii) however as I have found that the Trade Mark is not to any extent inherently adapted to distinguish this material is not relevant to my consideration under s 41(3). Similarly, the Holder submits evidence of decisions of overseas intellectual property bodies identifying the Trade Mark as having reputation for services closer to the Holder’s Services but again such material is not relevant to my consideration under s 41(3).

10. In Buchanan Turf Supplies Pty Ltd v Registrar of Trade Marks, Yates J summarized the application of s 41(3)(b) in these terms (in respect of s 41(6) of s 41 as it stood prior to the Raising the Bar legislation, which is equivalent to the current s 41(3)):

    Section 41(6) recognises that a sign may be descriptive but still distinctive. In Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd (2010) 191 FCR 297, Middleton J observed (at [60]) that the categories of descriptive words, on the one hand, and words that are capable of distinguishing goods and services, on the other, are not mutually exclusive. His Honour quoted the following observations of Lockhart J in Johnson & Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited (1991) 30 FCR 326 at 335-336:

    The mere fact that a word is descriptive or has a descriptive flavour does not necessarily prevent it being distinctive of somebody’s goods: see Re application of H N Brock & Co Ltd, for a trade mark (“Osowoolo”)and trade marks (“Orlwoola”) (1909) 26 RPC 683, 850, 854 (the Orlwoola case) and Re application of Joseph Crosfield & Sons Ltdto register a trade mark (“Perfection”) (1909) 26 RPC 837 (the Perfection case).

    If a word is prima facie descriptive the difficulty of establishing that it is distinctive of the plaintiff’s goods is considerably increased. Also, if the plaintiff has not used the word simply for the purpose of distinguishing his own goods from those of others but primarily for the purpose of describing the particular kind of article to which he has applied it and only secondarily, if at all, for the purpose of distinguishing his own goods, it will be more difficult for him to establish that it is distinctive of them.

    A word may be so totally descriptive of the goods concerned as to be unregistrable, for example, ELECTRICS for electrical apparatus: see Electrix Ltd’s application for the registration of trade marks [1959] RPC 283 at 288. In less extreme cases the question is one of degree. There must be a sufficient degree of distinctiveness to counterbalance the descriptive character of the word: see Re application by J & P Coates Ltd for registration of a trade mark (1936) 53 RPC 355 at 368 and Yorkshire Copper Works Ltd v Registrar of Trade Marks [1954] 1 WLR 554; [1954] 1 All ER 570. A word which is prima facie descriptive may become distinctive in connection with particular goods and yet retain its descriptive meaning: see Burberrys v J C Cording & Co Ltd (1909) 26 RPC 693 at 704, per Parker J and the Perfection case (supra) (at 857-858). But the word must, in order to become distinctive, have a new and secondary meaning different from its primary descriptive one and thus cease to be purely descriptive: see Reddaway v Banham [1896] AC 199 at 213, per Lord Herschell.

    Distinctive means distinctive in the sense that the mark distinguishes the registered proprietor’s goods from others of the same type in that market, though it does not mean that the goods must specifically identify the plaintiff as the source of those goods. Often the [identity] of the supplier will be unknown, but what is important is that a significant number of consumers in the relevant market identify the plaintiff’s goods as coming from one trade source: see S Ricketson, par 25.8.[15]

    [15] [2015] FCA 756; (2015) 114 IPR 81, [128].

11. Most recently, in Primary Health Care Limited v Commonwealth of Australia the Full Federal Court made the following comments:

    An essential characteristic of a trade mark is that it is used to distinguish the goods or services of a trader from the goods or services of other traders: s 17 of the TMA; E & J Gallo Winery v Lion Nathan Pty Ltd (2010) 241 CLR 144 at [42]. A trade mark may in fact distinguish goods and services, or it may not. If a trade mark is not capable of distinguishing designated goods or services, then it may be used but cannot be registered. If it is not registered, the owner does not acquire the monopoly on the use of the trade mark conferred under s 20 of the TMA.[16] 

    …

    As Yates J observed in Buchanan Turf Supplies Pty Ltd v Registrar of Trade Marks [2015] FCA 756 at [34], mere evidence of use of a sign does not establish its distinctiveness for trade mark purposes. Whether the appellant used the word mark to distinguish the Services, and the extent to which it achieved distinctiveness, involved an evaluative judgment. The primary judge found that the appellant had used the word mark to distinguish its operation of its medical centres, but had not used the mark to distinguish the Services.[17] 

    [16] [2017] FCAFC 174, [219].

    [17] Ibid [373].

12. In summary when evaluating the evidence of the Holder for the purposes of s 41(3)(b), I must consider whether it establishes that the Trade Mark has a new and secondary meaning different from its primary descriptive one and thus, at the filing date, had ceased to be purely descriptive and acquired secondary meaning. Another way to look at it is whether consumers regard the Trade Mark alone as a badge of trade origin in the sense that they would rely upon that Trade Mark alone as an indication of trade origin for the Holder’s Services. In particular, I must look at:

    • the way the Trade Mark has been used by the Holder;
    • how the particular market has been educated concerning that use; and
    • how the market perceives the Trade Mark in denoting the services in respect of which it is used.

13. As noted earlier; there is no evidence of any use by the Holder of the Trade Mark in Australia for the Holder’s Services.  Equally I am unpersuaded that the Holder’s limited international use for services similar to the Holder’s Services has any bearing on how the market for the Holder’s Services perceives the Trade Mark in denoting the Holder’s Services in Australia. 

14. While s 41 does not prohibit the consideration of the Holder’s extensive use of the Trade Mark for clothing and clothing retail, this use is unpersuasive. Section 41(3) requires use of the mark to such an extent that the trade mark does distinguish the Holder’s Services as those of the Holder. The goods and services for which the Holder has used the Trade Mark are not similar or closely related to the Holder’s Services. Consumers would not expect hotel or restaurant service providers to also offer clothing (other than for limited promotional purposes) or vice versa; they are fundamentally different businesses.[18]

    [18] For completeness I note the Holder also provides evidence of the use of the ZARA HOME mark for household and homeware products including homeware and cutlery.  This does not assist the Holder; the evidence of use of the ZARA HOME mark in Australia is much less extensive (being 3.5 years of use over 3 stores between 2015 and 2019, though limited sales were made over the Internet before and after that date), and the goods for which the mark has been used remain very different to the Holder’s Services; a consumer would not expect a hospitality provider to be involved in the manufacture and retail of homeware and cutlery and the ZARA HOME mark is not the same as the Trade Mark

15. The market for the Holder’s Services is a very broad one and would encompass the adult population of Australia. The Holder provides no direct evidence of how the market for the Holder’s Services has been educated concerning the use of the Trade Mark or that the market for the Holder’s Services would see the Trade Mark and identify it as connoting the services offered by the Holder instead of relating to the geographical location. The Holder’s Submissions appear to suggest that once a sufficient degree of reputation is established in one segment of the market, that is sufficient for reputation to arise in respect of an unrelated set of services. I am not satisfied by that submission, nor is there any case law that supports it. I am not satisfied that at the filing date, the consumers in the market for the Holder’s Services regarded the Trade Mark alone as a badge of origin separate from its descriptive nature; i.e. that the mark uniquely identifies the hospitality services provided by the Holder rather than being services provided by or connected with the locality of Zara. In my evaluative judgement, the evidence before me is insufficient to persuade me that the descriptive trade mark ZARA had achieved distinctiveness as a matter of fact at the relevant date and as such the application to extend protection to the IRDA must be rejected under s 41 of the Act.

    Decision

16. Regulation 17A.24 provides:

    17A.24Final decision on examination

    (1)The Registrar must, after the examination, accept the IRDA unless he or she is satisfied that:

    (a)it is not in accordance with this Division; or

    (b)there are grounds for rejecting it.

    (2)The Registrar may accept the IRDA subject to conditions or limitations.

    (3)The Registrar must reject an IRDA, in whole or in part, if the Registrar is satisfied that:

    (a)it is not in accordance with this Division; or

    (b)there are grounds for rejecting it, in whole or in part.

17. I am satisfied that there is a ground for rejecting the IRDA under section 41 of the Act. I must reject the IRDA in accordance with reg 17A.24 which I now do. If, however, the Registrar has been served with a notice of appeal within one month of the date of this decision, I direct that the disposition of the application be in accordance with the Court’s direction or order.

    Nicholas Smith
    Hearing Officer
    Oppositions and Hearings
    19 January 2024