Intellectual Property Development Corporation Pty v Fermentum Pty Ltd

[2017] ATMO 68

TRADE MARKS ACT 1995

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

ReOpposition by Intellectual Property Development Corporation Pty to registration of trade mark application 1541641 (32) – PACIFIC ALE - in the name of Fermentum Pty Ltd

Delegate:                  Robert Wilson

Representation:       Opponent: Peter Creighton-Selvay of Counsel, instructed by Intellectual Property Corporation

Applicant: Luke Merrick of Counsel, instructed by James Omond & Company Lawyers

Decision:  2017 ATMO 68

Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 41 and 44 considered – trade mark inherently adapted to distinguish as at relevant date – distinctiveness after relevant date considered – trade mark not deceptively similar to earlier registered trade mark – trade mark may proceed to registration

Background

1.     This decision concerns an opposition brought by Intellectual Property Development Corporation Pty (‘the Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (‘the Act’)[1] to registration of the trade mark subject of the application detailed below in the name of Fermentum Pty Ltd (‘the Applicant’):

[1] The priority date of the application precedes the amendments made to the Act and the Trade Mark Regulations 1995 (Cth) (‘the Regulations’) which occurred as a result of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 and the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No.1). The effect of this is discussed later in the decision.

Application Number:	1541641
Filing Date:	19 February 2013
Divisional Priority Date:	2 August 2011
Goods:	Class 32: Pilsner; Ale; Lager; Draught Beer; Bitter beer  (‘the Applicant’s Goods’)
Trade Mark:	PACIFIC ALE	(‘the Opposed Trade Mark’)

2.     The application is a divisional application, the parent of which is lapsed application number 1440192 (‘the Parent Application’). The filing date of the Parent Application is 2 August 2011.

3.     On 21 May 2015 the application’s acceptance for possible registration was advertised in the Australian Official Journal of Trade Marks. The Opponent filed a Notice of Intention to Oppose the registration on 21 July 2015 and a Statement of Grounds and Particulars (‘the SGP’) on 21 August 2015. The Applicant filed a Notice of Intention to Defend on 4 September 2015. The SGP nominated grounds of opposition corresponding to ss 41 and 44 of the Act.

4.     I note that the application and the Notice of Intention to Defend were filed in the name of Stone & Wood Pty Ltd. The Applicant underwent a change of name to Fermentum Pty Ltd. This change was recorded on the Register on 16 March 2017. References to Stone & Wood Pty Ltd in the decision are a reference to the Applicant.

Evidence

5.     The Opponent filed Evidence in Support of its opposition (‘EIS’) consisting of:

·Statutory Declaration made on 9 December 2015 by Philip Craig Withers, the director of the Opponent, with Exhibits PCW-1 to PCW-25 (‘Withers 1’).

6.     The Applicant filed Evidence in Answer (‘EIA’) consisting of:

·Statutory Declaration made on 5 April 2016 by Jamie Cook, a director of the Applicant, with Exhibits A to K (‘the Cook declaration’). The exhibits to this declaration include affidavits related to proceedings in the Federal Court which involve parties including the Applicant and the Opponent. The affidavits are:

oExhibit A – First affidavit of Jamie Cook dated 6 October 2015;

oExhibit B – Second affidavit of Jamie Cook dated 9 February 2016;

oExhibit C – First affidavit of Matthew Kirkegaard dated 2 October 2015;

oExhibit D – Second affidavit of Matthew Kirkegaard dated 12 February 2016;

oExhibit F – First affidavit of James Omond dated 8 February 2015;

oExhibit G – Second affidavit of James Omond dated 18 March 2015;

oExhibit H – Affidavit of Professor Lawrence Lockshin dated 12 February 2016;

oExhibit I – Affidavit of Matthew Coorey dated 30 September 2015;

oExhibit K – Affidavit of Corey Crooks dated 7 October 2015;

·Statutory Declaration made on 2 May 2016 by James Omond, a solicitor at Omond & Co Pty Ltd, the solicitors representing the Applicant, with Exhibit JLO-1 (‘the Omond declaration’); and

·Statutory Declaration made on 22 August 2016 by Brad Rogers, a director of the Applicant, with Annexure BR-1 (‘the Rogers declaration’).

7.     The Opponent filed Evidence in Reply (‘EIR’) consisting of:

·Statutory Declaration made on 25 July 2016 by Philip Craig Withers with Exhibits PCW-26 to PCW-29 (‘Withers 2’).

8.     Once the time allowed for filing evidence had ended both parties requested to be heard.

9.     I heard the matter in Canberra on 3 May 2017 as a delegate of the Registrar of Trade Marks. Luke Merrick of Counsel, instructed by Omond & Company Lawyers, appeared for the Applicant. Mr Merrick’s oral submissions were supplemented by written submissions filed with IP Australia on 28 April 2017 (‘the Applicant’s submissions’). The Opponent chose not to appear at the hearing, instead relied on written submissions prepared by Peter Creighton-Selvay of Counsel. Mr Selvay was instructed by the Opponent. Both representatives’ written submissions were filed in accordance with my earlier directions.

The Opponent

10.     According to Withers 1:

The Opponent was incorporated in 2005 and is part of a group of companies that operates an import/export business in Australia, New Zealand, Europe, USA and South Africa (‘ICB Group’). The Opponent holds the intellectual property of the ICB Group. …

Over the past 6 years, the ICB Group has expanded into the brewing industry by developing and marketing a range of beers and related merchandise. …

The ICB Group bas expended a significant amount of money in researching, filing and prosecuting Australian trade mark applications for its beer products and services.

11.     Withers 1 also indicates that the Opponent holds the intellectual property for Elixir Signature Pty Ltd (‘Elixir’). Elixir operates a craft beer brewery in Brunswick, Melbourne called the Thunder Road Brewery which began brewing in May 2010. All of the Thunder Road Brewery’s beers are sold under the THUNDER ROAD house brand. The Thunder Road Brewery has brewed beers, in what it describes as the ‘Pacific Ale style’ since January 2015.

The Applicant

12.     According to the first Cook affidavit, the Applicant operates breweries in the Byron Bay and Murwillumbah areas of New South Wales. It produces a range of craft beers (both in draught and bottled formats) which it markets and distributes throughout Australia. Mr Cook has further stated:

In November 2008, [the Applicant] brewed its first beer for sale to market – the ‘Draught Ale’. We gave the Draught Ale that name, because it was originally sold in kegs only. …

When [the Applicant] started selling the Draught Ale in bottles (in early 2010), it decided to change the name from ‘Draught Ale’ … The rebranding to Pacific Ale occurred in about November 2010.

13.     The Applicant is the owner of the registered trade mark number 1395188 shown below (‘the Applicant’s registered trade mark’). The trade mark is registered in respect of beer in Class 32 and has a priority date of 18 November 2010.

Grounds of Opposition, Onus and Standard of Proof

14. In his written submissions Counsel for the Opponent argued both the ss 41 and 44 grounds nominated in the SGP. To succeed, the Opponent bears the onus of establishing at least one of the nominated grounds of opposition, with the relevant standard of proof being the ordinary civil standard based on the balance of probabilities.[2] The date at which the rights of the parties are to be determined is 2 August 2011, being the filing date of the Parent Application (‘the Relevant Date’).[3]

Discussion

[2] Following Gyles J in Pfizer Products Inc v Karam [2006] FCA 1663, [6]-[26], affirmed by the Full Federal Court in Telstra Corporation Limited v Phone Directories Company Ltd [2015] FCAFC 156, [132]-[133].

[3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82, [2] (Kitto J).

Section 41

15. As the Relevant Date is 2 August 2011, the applicable form of s 41 is the form it took prior to the amendments to the Act and Regulations detailed in footnote 1, above. The relevant form of s 41 provided:

Section 41 – Trade Mark not distinguishing applicant’s goods or services

(1)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).

(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.

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

(3)In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first 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.

(4)Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5)If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a)the Registrar is to consider whether, because of the combined effect of the following:

(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 trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b)if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and

(c)if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.

Note 1: For goods of a person and services of a person see section 6.

Note 2: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 (1) and 7(3) and section 8).

(6)If the Registrar finds that 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, the following provisions apply:

(a)if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b)in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

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: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 (1) and 7(3) and section 8).

16.     In the SGP the Opponent particularised this ground of opposition as follows:

[The Opposed Trade Mark] is not capable of distinguishing the Applicant’s beer goods in class 32 from those of other traders. [The Opposed Trade Mark] is not to any extent inherently adapted to distinguish the applicant’s goods as it is wholly descriptive of a style of beer brewed using hops from Australia or New Zealand which are well known to be lighter and fruitier. Other traders, without improper motive, desire to use and are in fact using [the Opposed Trade Mark], and variations thereof, in the ordinary course of trade for their similar goods. The applicant should not be allowed a monopoly in [the Opposed Trade Mark] to the exclusion of other traders as it would inappropriately give a monopoly in the name of a beer style.

17. The operation of s 41 was analysed by Branson J in the leading case of Blount Inc v Registrar of Trade Marks as follows:

Subsections (3)–(6) of s 41 of the Act are designed to control the process by which the registrar is to reach a conclusion as to whether the trade mark for which registration is sought is 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). If the trade mark is not so capable, the application for its registration must be rejected: s 41(2). Subsection (3) requires the registrar first 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’. Having taken such matter into account, it is theoretically open to the registrar to conclude:

(a) that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or

(b) that 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; or

(c) that the trade mark is to some extent inherently adapted to distinguish the designated goods or 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 designated goods or services.[4]

[4] (1998) 40 IPR 498, 504-5.

18.     The case law setting out the necessary considerations for determining whether a trade mark is inherently adapted to distinguish is plentiful and well established. In Registrar of Trade Marks v W & G Du Cros Ltd (‘Du Cros’), Lord Parker of Waddington said:

The applicant’s chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend 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 connexion with their own goods.[5]

[5] (1913) AC 624, 634-5.

19.     In citing Du Cros with approval Kitto J in Clark Equipment Co v Registrar of Trade Marks (‘Clark Equipment’) stated:

[W]hether a mark is adapted to distinguish [is to] be tested by reference to  the likelihood of other persons, trading in goods 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 connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it.[6]

[6] (1964) 111 CLR 511, 514.

20.     More recently the High Court in Cantarella Bros Pty Limited v Modena Trading Pty Limited (‘Cantarella’) considered s 41(3) in some detail and in a joint judgment the majority of the Court (French CJ, Hayne, Crennan and Kiefel JJ) explicitly approved Kitto J’s above-quoted words, stating:

In accordance with the principles established in Mark Foy’s,[7] and restated in Clark Equipment, Faulding[8] and Burger King,[9] determining whether a trade mark is ‘inherently adapted to distinguish’, as required by s 41(3), requires consideration of the ‘ordinary signification’ of the words proposed as trade marks to any person in Australia concerned with the goods to which the proposed trade mark is to be applied.

As shown by the authorities in this court, the consideration of the ‘ordinary signification’ of any word or words (English or foreign) which constitute a trade mark is crucial, whether (as here) a trade mark consisting of such a word or words is alleged not to be registrable because it is not an invented word and it has ‘direct’ reference to the character and quality of goods, or because it is a laudatory epithet or a geographical name, or because it is a surname, or because it has lost its distinctiveness, or because it never had the requisite distinctiveness to start with.  Once the ‘ordinary signification’ of a word, English or foreign, is established an inquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods.[10]

[7] Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190.

[8] FH Faulding & Co Ltd v Imperial Chemical Industries Ltd (1965) 112 CLR 537.

[9] Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417.

[10] [2014] HCA 48, [70]-[71]. Gageler J, in a separate judgment, ultimately reached a dissenting conclusion in the matter at hand, but did not disagree on the applicability of Kitto J’s above-quoted words.

21.     The parties involved in this matter have been involved in some recent litigation in the Federal Court (‘the Federal Court matter’).[11] In simple terms, the Applicant alleged that the Opponent had engaged in misleading or deceptive conduct (or conduct likely to mislead or deceive) and made false or misleading representations in contravention of ss 18 and 29 of the Australian Consumer Law (being schedule 2 to the Competition and Consumer Act 2010 (Cth) (‘the ACL’) and have engaged in passing off. The impugned conduct concerned use of the sign ‘Pacific Ale’ by the Opponent.[12] The images shown below show the nature of the use on labels for bottles of beer by the Applicant (left) and the Opponent (right):

[11] Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820.

[12] The use was in fact by the second respondent, Elixir Signature Pty Ltd, a related company to the Opponent. For the sake of simplicity this will be referred to as use by the Opponent.

22.     Justice Moshinsky found that the Applicant’s causes of action were not established. I note that the Federal Court matter has been appealed to the Full Federal Court—the appeal having been heard in February 2017. Judgment was reserved, and at the time of writing this decision had not yet been handed down. Referring to the judgment in the Federal Court matter the Opponent has submitted:

The Federal Court has already determined, in proceedings … and by reference [to] the evidence that has been filed in this opposition proceeding, that:

(a)the phrase PACIFIC ALE ‘has a descriptive aspect to it’ when used in relation to beer;[13]

[13] Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820, [205].

(b)the word ‘Pacific’ can be used ‘adjectively to refer to someone or something that pertains to the Pacific Ocean’ (such as the geographical origin of the hops used in the Pacific Ale beers offered for sale by [the Applicant] and a related company of [the Opponent]);[14]

[14] Ibid.

(c)the word ‘Pacific’ is also ‘an adjective which means peaceful or calm (among other meanings)’;[15]

[15] Ibid.

(d)the ‘descriptive aspect’ of the word ‘Pacific’ is ‘underlined by the reasons why Stone & Wood chose the name in the first place. The first was that one of the Stone & Wood breweries (the only one in operation in 2010) is located in Byron Bay, which is situated on the Pacific Ocean. The second reason was to generate a calming, cooling emotional response in consumers’;[16]

[16] Ibid.

(e)‘[B]y choosing a name for its product that has a descriptive aspect to it, Stone & Wood ran the risk that others in the trade would use it descriptively and that it would not distinguish its product’;[17]

(f)through the good faith usage of third party traders, the phrase PACIFIC ALE has come ‘to serve a function of describing beers made from hops from Australia and New Zealand’;[18]

(g)the term PACIFIC ALE ‘has come to be associated with the use of Australian Galaxy hops’;[19]

(h)as a result, ‘the word “Pacific” has come to be used descriptively in this sense. In these circumstances, it is difficult for Stone & Wood to establish that the name “Pacific Ale” distinguishes its beer from the beer of other traders’;[20]

(i)the dominant use by S&W of the words STONE & WOOD on all of its beer products ‘makes it less likely that the words “Pacific Ale” on their own would distinguish Stone & Wood‘s product from the products of others’;[21] and

(j)the phrase PACIFIC ALE does not have a ‘reputation as a brand’.[22]

These findings are fatal to the application … They either create an issue estoppel, or alternatively, should be treated as presumptive findings of fact which [the Applicant] cannot, on the evidence which it has adduced, contradict.

Further, it is clear, from the evidence in the Federal Court, and now in this opposition proceeding, that the phrase PACIFIC ALE has, at all times since the priority date of 2 August 2011, described a type of beer brewed using hops from Australia or New Zealand, namely, a beer with a ‘Pacific’ origin.

[17] Ibid.

[18] Ibid [206].

[19] Ibid [134(c)].

[20] Ibid [206].

[21] Ibid [208].

[22] Ibid [211].

23.     In response to the Opponent’s submissions above, the Applicant has submitted:

Those submissions should be rejected. [N]o issue estoppel arises and the findings of Moshinsky J cannot be given any presumptive validity in this proceedings. Justice Moshinsky’s findings as to descriptiveness were subsidiary (rather than indispensable) to the disposition of the Federal Court Proceeding. Further, the Federal Court Proceeding involved different issues and legal tests (breach of the ACL and passing off) and the rules of evidence (which are not applicable to this proceeding) impacted on the treatment of the evidence in the Federal Court. To the extent that trade mark law was involved, the test was one of infringement relating to [the Applicant’s registered trade mark]. In this proceeding, the hearing officer is required to make an independent assessment of the evidence placed before him or her. It would be an error, and an abrogation of duty, to merely adopt and follow the findings made by Moshinsky J. Finally, and in any event, the very findings that [the Opponent] seeks to rely upon in this proceeding are the subject of direct and ongoing challenge in the appeal.

24.     I am inclined to the Applicant’s view on this question. Additionally, even were I to accept the findings of Moshinsky J as to distinctiveness I not satisfied that his findings reflect the situation at the Relevant Date. At item (g) of the Opponent’s submission reproduced at paragraph 22, above, the Opponent omitted what I consider to be important words of Moshinsky J’s judgment. The full text of paragraph 134(c) of His Honour’s judgment reads as follows:

Although the position was different when [the Applicant] launched its Pacific Ale product, since then the term ‘Pacific’ has come to ‘serve a function of describing beers made from hops from Australia and New Zealand’, as was accepted by Mr Kirkegaard; the term has come to be associated with the use of Australian Galaxy hops (as was also accepted by Mr Kirkegaard).[23]

[23] Ibid [134(c)] (emphasis added).

25.     A number of other quotes of Moshinsky J provided by the Opponent, above, include the expression ‘has come to’, indicating that the situation described was not at some point as it came to be. For example, the Opponent also quoted His Honour at item (h), above. In that quote His Honour stated ‘as a result, “the word ‘Pacific’ has come to be used descriptively in this sense …”’.[24] Another example, is to be found at (f), above.

[24] Ibid [206] (emphasis added).

26.     I am to assess the distinctiveness of the Opposed Trade Mark at the Relevant Date. The Applicant launched its Pacific Ale product in about November 2010 some nine months before the Relevant Date. It is explicit in Moshinsky J’s judgment that he considered that in November 2010 ‘Pacific’ did not serve a function of describing beer made from hops from Australia and New Zealand but at some point from then to when he handed down his decision in 2016 ‘Pacific’ did serve that function.[25] It is necessary for me to decide whether the Opposed Trade Mark had, some nine months after launching its product whether ‘Pacific’ had taken on this particular function.

[25] Ibid [134(c)].

27.     In arriving at his findings in respect of the distinctive nature of ‘Pacific’ in respect of beers, Moshinsky J relied to a significant extent on the testimony of Matthew Kirkegaard. According to Mr Kirkegaard’s first affidavit, he is a freelance beer writer, commentator, educator and consultant, whose focus is the craft beer industry. In his words:

As a result of the business activities and experience that I describe below, I have developed a detailed knowledge of the craft beer market in Australia (including the brewers involved in that market and the range of craft beers that are widely available). I have also become very familiar with the names used to describe beers in Australia.

28.     In his first affidavit, Mr Kirkegaard stated:

In my experience, the term ‘Pacific’, if it is used at all in relation to description of beers in Australia, is used to generally describe beers made using Australian and New Zealand hops. I cannot recall when I first became aware of this use of the term ‘Pacific’, but it is a relatively recent phenomenon. Until recently, in my experience, beers made using hops from Australia and New Zealand tended to be described as ‘New World’ version of the style as opposed to ‘Pacific’ versions of a style.

29.     In his judgment Moshinsky J reproduced part of the cross-examination of Mr Kirkegaard by senior counsel for the Opponent regarding use of the term ‘Pacific’ as a description of the type of hops being used to make a beer. Part of that testimony is instructive here:

Senior counsel:            [I]n recent years that has become an apt description?

Mr Kirkegaard:            It – it has come be used, yes.

Senior counsel:            Now, so you refer to recent years where that – the term ‘Pacific’ has become an apt describer of this origin of the hops; right?

Mr Kirkegaard:           It – it has come be used, yes [sic]

Senior counsel:           So, like, since 2013?

Mr Kirkegaard:           Yes, it has gradually evolved over the last three or four years, yes.[26]

[26] Ibid [130].

30.     Mr Kirkegaard’s oral testimony quoted above, is supported by the following from his first affidavit:

The Australian Brewery’s The Pale Ale is described as being a ‘Pacific Pale Ale’. This description appears towards the bottom of the can as a part of the following description:

THIS CLOUDY ALE IS INSPIRED BY THE AUSTRALIAN

PACIFIC PALE ALE

ADMIRE THIS PALE CLOUDY ALE BEFORE IMMERSING YOURSELF IN THE RICH AROMAS OF CITRUS & PASSIONFRUIT THAT ONLY GALAXY HOPS CAN GIVE

This was the first beer that I can recall being described in this manner. I recall thinking at the time that it was a novel description for the beer. To me, this description was designed to let consumers know that The Australian Brewery’s beer had similar flavour characteristics to the Stone & Wood Pacific ale as without an awareness of the Stone & Wood Pacific Ale the use of the word ‘Pacific’ would not have had much meaning to the average consumer. I do not recall any beers described in this way prior to around March 2013 when I became aware of The Australian Brewery’s beer and the marketing around it.

31.     I am satisfied that this evolution of the term ‘Pacific’—from providing no indication of the type of hops used in a beer to becoming a descriptive term in which is does—did not occur until at least 2013. This is well after the Relevant Date. Accordingly, I am satisfied that at the Relevant Date the term ‘Pacific’ did not function as a descriptive term in relation to the type of hops used to make the beer to which it is applied.

32. I note at this point that the particulars in the SGP base the s 41 objection solely on the assertion that the Opposed Trade Mark functions as a descriptor of ‘a style of beer brewed using hops from Australia or New Zealand’. To support this view the Opponent quoted Jamie Cook, a director and co-founder of the Applicant. The quotes were in evidence at Annexure PCW-9 to Withers 1 and read:

Ever since we launched our ale, people have continually been asking us, ‘What style of beer is it?’… There is nothing stopping brewers from developing new approaches and using new ingredients to create new styles of beer that don‘t fit the strict criteria of traditional beer styles … Our ale deserves a name that speaks to where it is created, its home, a name that helps it establish its own place and its own beer style. The answer has been staring us in the face all along. It‘s now called Stone & Wood Pacific Ale … So when someone asks us ‘what style of beer is it?’, we will simply say, ‘it‘s a Pacific Ale’. (Opponent’s emphasis)

33.     With respect to beer styles Mr Kirkegaard stated in his first Affidavit:

The concept of beer ‘styles’ is relatively new. As recently as the 1950s and 1960s, beer was often classified as generally beer, ale, stout and lager. The concept of ‘styles’ as we now refer to them has evolved largely since the 1980s, in line with the growth of craft beer. …

The authoritative beer style classifications are documented in guidelines from major beer competitions around the world. These include the Brewers Associations (United States) Beer Style Guidelines …

‘Pacific Ale’ does not appear in the Brewers Association Beer Style Guidelines, and nor does any reference to ‘Pacific’.

34.     With respect to the question of whether ‘Pacific Ale’ was descriptive of a style of beer Moshinsky J found:

In light of the evidence … I conclude that ‘Pacific Ale’ is not a ‘style’ of beer in the technical sense of a style identified in style guides used in beer competitions. It is possible some consumers may regard ‘Pacific Ale’ as a style of beer in a non-technical sense, but the evidence does not establish that a substantial number of consumers would so regard it.[27]

[27] Ibid [142].

35.     I am inclined to a similar view as His Honour. Again, if it were to be accepted that the Opposed Trade Mark does indicate a style of beer at the time Moshinsky J wrote his decision, or at the date of writing this decision, I am not satisfied that it did so at the Relevant Date.

36.     That ‘Pacific’ indicates a beer style is not the only aspect of the Opposed Trade Mark upon which the Opponent relies for this ground of opposition. In its submissions the Opponent also asserted that ‘Pacific’ is a descriptive term which reflects the geographical region from which the beer originates. As to whether ‘Pacific’ might act as a geographical indicator of the region in which a beer is produced, I am not satisfied that this is so: the term is far too vague and non-specific to perform this function.

37.     Relating the discussion above to the tests in Cantarella, at the Relevant Date, the ordinary signification of the term ‘Pacific Ale’ to any person in Australia concerned with the Applicant’s Goods did not include indications of the style of beverage, the hops used in the manufacture of the goods, or the geographical origin of the goods. The Opponent has failed to satisfy me that at the Relevant Date the Opposed Trade Mark was not capable of distinguishing the Applicant’s Goods from the goods or services of other persons. Consequently, the Opponent has not established this ground of opposition.

Section 44

38. Relevant provisions of the Act with respect to the s 44 ground are reproduced below:

Section 44 - 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)            a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; 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.

Note 1: For deceptively similar see section 10.

Note 2: For similar goods see subsection 14(1).

Note 3: For priority date see section 12.

Note 4: The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

(2)…

(3)If the Registrar in either case is satisfied:

(a)that there has been honest concurrent use of the 2 trade marks; or

(b)that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area. 

Note:  For limitations see section 6.

(4)If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant's trade mark for a period:

(a)beginning before the priority date for the registration of the other trade mark in respect of:

(i)             the similar goods or closely related services; or

(ii)            the similar services or closely related goods; and

(b)ending on the priority date for the registration of the applicant's trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

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

Note 2: For predecessor in title see section 6.
Note 3: For priority date see section 12.

Section 10 - Definition of deceptively similar

For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

39. In the SGP the Opponent nominated the trade mark detailed below in respect of s 44:

Trade Mark Number:

464451

Priority Date:

1 May 1987

Owner:

Modelo Brands del Pacifico, S de RL de CV

Goods:

Class 32: Beers; ales and porters

(‘the PACIFICO Goods’)

Trade Mark:

PACIFICO  (‘the PACIFICO Trade Mark’)

40. To successfully oppose the application pursuant to s 44 of the Act the Opponent must establish the requirements of s 44(1), i.e. that the Opposed Trade Mark:

·     has a priority date which is earlier than the Relevant Date (‘the first requirement’); and

·     is in respect of at least some of the PACIFICO Goods (‘the second requirement’); and

·     is substantially identical with or deceptively similar to the PACIFICO Trade Mark (‘the third requirement’).

41.     The PACIFICO Trade Mark has a priority date which is earlier than the Relevant Date, thus satisfying the first requirement. It is also uncontroversial that the respective goods are similar, thus satisfying the second requirement. I move then, to consider the third requirement.

Substantially identical or deceptively similar?

42.     When considering ‘substantial identity’ in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd  Windeyer J said:

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.[28]

[28] [1963] HCA 66, [12].

43.     The Opponent has not submitted that the respective trade marks are substantially identical. On a side by side comparison there are obvious differences which prevent the trade marks from being substantially identical. I will consider those differences in more detail in the discussion of deceptive similarity, below.

44.     Guidance for determining whether trade marks are deceptively similar is generally found in the judgment of Windeyer J in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd:

On the question of deceptive similarity, a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity.

Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant’s [trade mark].[29]

[29] [1963] HCA 66, [13].

45.     The Opponent has submitted that ‘[i]f the phrase PACIFIC ALE has any distinctive quality, the Opposed Application is deceptively similar to [the PACIFICO Trade Mark]’, and further:

(a)[the Opposed Trade Mark] is for the phrase PACIFIC ALE;

(b)the word ‘ale’ is wholly descriptive of the goods in respect of which the Applicant seeks to register the phrase PACIFIC ALE, namely, different types of beer. Indeed, ‘ale’ is a synonym for ‘beer’;

(c)no additional distinguishing features are contained in the Opposed Application. It is for a plain word mark;

(d)accordingly, to the extent, if at all, that [the Opposed Trade Mark] is distinctive, the essential feature of that mark must be the word PACIFIC – the other word, ‘Ale’, should be ignored, as a mere descriptor (which is used in relation to numerous beer styles, such as ‘Pale Ale’, ‘India Pale Ale’, ‘Summer Ale’, and ‘Amber Ale’, to name but a few);

(e)if the essential feature of [the Opposed Trade Mark] is the word PACIFIC, then the [Opposed Trade Mark] must be deceptively similar to [the PACIFICO Trade Mark]—the correct comparison would be between PACIFIC and PACIFICO. The only difference between those words being the addition of the letter ‘O’ to the end of the word PACIFIC;

(f)in any event, it is well established that the first syllable or start of a mark should be considered the most important when it comes to assessing the risk of deception,[30] and in this case, both marks start with PACIFIC. The only difference is the ‘O’ v ‘ALE’ at the conclusion of the marks. That is not sufficient to avoid a finding of deceptive similarity;

(g)indeed, the marks look very similar and also sound very similar when pronounced—[The PACIFICO Trade Mark] is likely to be pronounced PAC - IF - IC - O and [the Opposed Trade Mark] is likely to be pronounced PAC - IF - IC - ALE. Not only are the first three syllables in each mark identical, but the last syllable in each mark sounds similar (‘O’ v ‘ALE’); and

(h)when allowance is made for the effect of careless pronunciation and speech,[31] the risk of deception is obvious.

[30] London Lubricants (1920) Ltd‘s Application (1925) 42 RPC 264.

[31] Aristoc Ltd v Rysta Ltd [1945] AC 68, 86-7 (Viscount Maugham), 95 (Lord Thankerton), 99 (Lord Macmillan), 99 (Lord Wright), 104 (Lord Simonds); Reckitt & Colman (Australia) Ltd v Boden (1945) 70 CLR 84, 98; Re Bali Brassiere Co Inc's Registered Trade Mark & Berlei Ltd's Application (1968) 118 CLR 128, 137.

46.     The Applicant’s has submitted that the respective trade marks are not deceptively similar for reasons including the following:

(a)[T]he ‘O’ sound which occurs at the end of the PACIFICO mark is very distinctive. It gives the PACIFICO mark the feeling of being a foreign word, most obviously Spanish or Italian. Words ending in ‘O’ are uncommon in English and this feature of the PACIFICO mark is likely to fix in the mind of consumers and be memorable.

(b)[A]t a conceptual level, the foreign feeling of the PACIFICO marks sets it apart from the Pacific Ale Mark. The fact that the PACIFICO mark has this quality is likely to be recalled by consumers and would provide a strong basis for consumers to distinguish the Pacific Ale Mark from the PACIFICO mark.

(c)[T]here is little prospect of confusion between the Pacific Ale Mark and the PACIFICO mark. There is certainly no evidence to suggest that any such confusion aha occurred, notwithstanding the fact that these marks are both in use in Australia.

47.     I am persuaded by the Applicant’s submissions. I do agree with the Opponent that it is appropriate to focus the comparison on the similarities and differences between PACIFIC and PACIFICO.  I accept also the principles found in the case law regarding imperfect recollection,[32] the importance of the beginning of words,[33] and careless pronunciation.[34] Nevertheless, in this case, the simple addition of an ‘O’ to the end of the word ‘PACIFIC’ creates aural, visual and conceptual differences which, in combination, are significant and sufficiently memorable such that deception or confusion are unlikely. Consequently, the Opponent has failed to establish this ground of opposition.

[32] Reckitt & Colman (Australia) Ltd v Boden (1945) 70 CLR 84; Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353.

[33] London Lubricants (1920) Ltd‘s Application (1925) 42 RPC 264, 279, applied in Nexans SA v Nex 1 Technologies Co Ltd and The Registrar Of Trade Marks [2012] FCA 180, [33] – [34].

[34] Aristoc Ltd v Rysta Ltd [1945] AC 68, 86-7; Reckitt & Colman (Australia) Ltd v Boden (1945) 70 CLR 84, 98; Re Bali Brassiere Co Inc's Registered Trade Mark & Berlei Ltd's Application (1968) 118 CLR 128, 137.

Decision

48.     The Opponent has failed to establish either ground of opposition it nominated in the SGP. Application 1541641 may proceed to registration after 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 either the appeal is withdrawn or a court so orders.

Costs

49.     The Applicant has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. As the Opponent has failed to establish a ground of opposition, I award costs against the Opponent as per Schedule 8 of the Trade Marks Regulations 1995.

Robert Wilson
Hearing Officer
Trade Marks and Designs Hearings
13 July 2017