J.H. Import-Export Co., v Reebok International Limited

[1997] ATMO 73

TRADE MARKS ACT 1955

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

Re:Opposition by REEBOK INTERNATIONAL LIMITED to registration of trade mark application number 639185 in the name of J.H. IMPORT-EXPORT CO.

Background
As provided for in the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act 1955 continue to govern this opposition.  Accordingly, unless otherwise specified, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.

Application number 639185 was lodged on 31 August 1994, in the name of J.H. Import-Export Co. (the applicant).  The application was for the registration of the word REESTRUCT and the statement of goods, “Footwear and clothing”, in class 25.  The trade mark was advertised as accepted in the Australian Official Journal of Trade Marks of 8 June 1995.

Notice of opposition to the trade mark’s registration was lodged by Reebok International Limited (the opponent), following an extension of time to do so, on 8 December 1995.  The notice of opposition listed a number of grounds.  However, the only matters which were later pursued by the opponent at the hearing were that the present trade mark was substantially identical with or deceptively similar to trade marks registered by the opponent for goods of the same description; that, because of the opponent’s use and reputation of its own mark, then use of the subject trade mark would be likely to deceive or cause confusion; and that the trade mark was one, the use of which by the applicant, would not be entitled to protection in a court of justice.  I have attempted here to summarise both sides’ arguments only as they relate to those grounds.

The service and lodgment of the opponent’s evidence in support was completed by 28 November 1996.  The applicant did not serve or lodge any evidence in support.  The opponent requested a hearing in the matter and it came before me, as a delegate of the Registrar, in Sydney.  The opponent was represented by Mr Gerard Skelly of Baker & McKenzie.  The applicant did not appear at the hearing but relied instead on submissions in writing from Mr A.K. Fazal, a director of that company.

Evidence
Evidence in Support

Statutory declarations by John Breed Douglas III dated 24 May 1996 and Exhibits JBD-1 to 9, Gerard James Skelly dated 26 November 1996 and Annexure GJS-1, and Kenneth James Taylor dated 24 November 1996 and Exhibit KTJ-1.

In his declaration, Mr Douglas, the director of the applicant, recounted the history and use of the opponent’s trade marks, internationally and in Australia.  He annexed details of annual turnover of goods under those marks in Australia, and also of the expenditure for advertising and promotion of goods bearing the trade marks in this country.  Also annexed to his declaration was a copy of a company search in relation to the applicant.  Mr Skelly’s declaration annexed another company name search on the applicant.  Mr Taylor, a private inquiry agent, declared that, on the opponent’s behalf, he attended several markets where he observed shoes with the REESTRUCT trade mark offered for sale.  Exhibited to his declaration was a shoe bearing the mark which he had purchased from one of the market stalls.

Submissions
In relation to the opposition as it was based on s.33, Mr Skelly said that the opponent owned several prior registrations for the word REEBOK and devices.  However, he said that he would be relying primarily, in his submissions, on two of the opponent’s trade marks to show that the applied for trade mark was at least deceptively similar to those prior registrations for same goods, or goods of the same description..  These were registration number 483627 covering the word REEBOK and the statement of goods, “Clothing, including outer clothing and sportswear; footwear, including shoes for sports and leisure; headgear; all of the foregoing for men, women and children”, and also on registration number 340859 for the word REEBOK in stylised form and including the device resembling a snowflake for the statement of goods, “Articles of clothing including footwear”.  He said that the correct tests to be applied in such a case were contained in Shell Co of Australia v Esso Standard Oil (Australia) Ltd, (1961) 109 CLR 407, where the marks should not be placed side-by-side. Instead, the impression based on recollection of all of the competing trade marks should be considered. He said that the relevant principles could be gleaned from such cases as Aristoc Ltd v Rysta Ltd (1945) 62 RPC 65, Pianotist Co's App'n (1906) 23 RPC 774, Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641, and other cases contained in pp.170-173 of Australian Law of Trade Marks and Passing Off (Second Edition) by D.R.Shanahan.

Mr Skelly said that the comparison should be based upon the fair and notional use to which both the applicant’s marks and the subject mark could be put if it was registered.  This meant that both visual and aural consideration should be given to the word REEBOK as registered on one hand and REESTRUCT on the other used on footwear and clothing, in both normal block script and also in a stylised form.  He said that the importance of the visual aspect of comparison had been highlighted in such cases as Johnson and Johnson Australia Pty Ltd v Kalnin (1993) 26 IPR 435. He said that both words here were invented and contained the prefix REE-. This increased the possibility of deception and confusion because of the emphasis on the first syllables of competing words as shown in cases listed in Shanahan’s book, supra, at p180. Mr Skelly said that a search of class 25 trade marks on the Register revealed no other two syllable marks with a REE- prefix, other than the opponent’s marks and that covered by the present application. He said that here there was the strong probability of contextual confusion amongst a substantial number of persons who could infer a connection between the present respective trade marks. He referred for support here to the case of Schering v The Upjohn Co (1994) AIPC 91-082, where the Hearing Officer expressed concerns that deception or confusion could arise between the marks NUVELLE and PROVELLE on the same goods.

Mr Skelly said that there was no doubt in the present case that the goods covered by all of the trade marks were the same.  These goods were usually selected by the customer in a situation where the goods were laid out on tables for sale.  Therefore, given the doctrine of “imperfect recollection” of trade marks, as referred to on p.173 Shanahan’s book, supra, mistakes could occur in the selection of the respective goods.  He said that this has been recently referred to by Gummow J. in the case of Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) AIPC 91-049. There, it had been said that purchasers seize upon the distinctive or unusual aspects of trade marks - the “mental cognitive factors” - in their recollection of them, in this case, the prefix REE-.

On the s.28 ground, that use of the subject trade mark would be likely to deceive or cause confusion, Mr Skelly said that, under this section, the fair and notional use of the applicant’s trade mark REESTRUCT should be imputed.  He said that the situation should be considered as at the date of the lodgment of the present application and that the evidence clearly showed the opponent’s REEBOK trade mark to be extremely well known at that time in respect of clothing and footwear.  He submitted that, as a famous mark, it should be given special consideration, and he referred for support here to Shanahan’s book, supra, at p.165.  He said that Mr Taylor’s declaration showed that the applicant was selling footwear with the REESTRUCT mark, rendered in a similar fashion to the opponent’s marks, attached, together with a “stripecheck” device which was clearly a copy of the opponent’s famous device, the subject of several of the opponent’s registrations.  Therefore, he alleged, the applicant was attempting to trade off the reputation of the opponent for its REEBOK marks and its registration by that party was against the public interest.  He said that the possibility of deception and confusion amongst potential customers was exacerbated because the evidence showed that respective parties’ goods bearing both marks were being sold side by side on tables at a market.

Mr Skelly said that the opponent’s evidence in support was unrebutted.  He said that some material, which the applicant had later attempted to produce, was not correctly served in accordance with the Act and therefore could not be considered as evidence.  Mr Fazal had stated in a letter that the applicant no longer sold goods under its mark, and which included a stripecheck device, but this was unsupported assertion and was not made in declaratory form.  He said that, notwithstanding whatever Mr Fazal might say was the present practice of the applicant, it was the situation as at the date of lodgment, 31 August 1994, which was relevant to these proceedings.  Mr Skelly said that the Registrar’s decision of 4 June 1997 (as yet unreported) refusing registration of trade mark application number 619166 in the name of Man Li Zhu, following an opposition by Reebok International Limited, was relevant to the present case.  There, the Hearing Officer found that use of the mark RECDOK in the face of the opponent’s REEBOK marks was likely to lead to deception and confusion, following a broader than usual consideration of the notional use of the applicant’s mark.

With respect to blameworthy conduct on behalf of the applicant, which needed to be shown in order for the success of an opposition under this section, Mr Skelly said that this lay in the selection and use of the REESTRUCT mark with an obvious knowledge of, and in the face of, the opponent’s extremely well known REEBOK mark.  Additionally, the presence of the very distinctive prefix REE- in the present mark meant that REESTRUCT might be seen as a variation of REEBOK, especially when it was shown to be used in conjunction with the stripecheck device.  He said that it was for the applicant to show that this was not an attempt to cause deception and confusion in the mind of purchasers.  Mr Skelly said that there was a complete absence of evidence here which might establish the bona fides of the applicant, and its conduct could only be considered blameworthy and not entitled to protection in a court of justice.  He referred for support here to the decision in the case of Sporoptic Pouilloux v Arnet Optic Illusions Inc 32 IPR 430 and also to that in the RECDOK/REEBOK case, supra. Mr Skelly concluded his submissions by seeking costs in the matter in favour of the opponent.

In his written submissions on behalf of the applicant, Mr Fazal said that the name REESTRUCT was very much different in meaning to the word REEBOK.  He said that the opponent’s customers could read and very easily see the difference between the two names.  He said that it was not the applicant’s intention to either deceive or cause confusion to anyone.  Mr Fazal said that the applicant’s goods produced since the end of 1994 did not have any kind of stripecheck attached which might have belonged to another trader.  He said that the photos produced by the opponent - presumably of the shoe purchased by Mr Taylor at the Fairways Market on 21 September 1996 and included in the opponent’s evidence - were of old products of “other Chinese people” who were “not here any more since 1995”.  He said that he had purchased some of their products at the time.

Discussion
Section 33 - Substantially identical or deceptively similar

Sub-section 33(1) reads:

Subject to this Act, a trade mark is not capable of registration by a person in respect of goods if it is substantially identical with or deceptively similar to a trade mark which is registered, or is the subject of an application for registration, by another person in respect of the same goods, of goods of the same description as those goods, or of services that are closely related to those goods, unless the date of registration of the first-mentioned trade mark is, or will be, earlier than the date of registration of the second-mentioned trade mark.

In considering the question of whether the subject trade mark is caught by the provisions of s.33, I must firstly determine whether it is deceptively similar to the trade marks owned by the opponent.  Mr Skelly conceded at the hearing that the respective marks were not substantially identical.  There can be no question that the goods covered by both the applicant’s and opponent’s trade marks are the same.

Sub-section 6(3) defines a mark as deceptively similar if it is likely to deceive or cause confusion.  To determine the deceptive similarity of marks, they should not be placed side by side but consideration should be given to any common net impression inferred from the two marks.  I refer here to the judgment in Australian Woollen Mills Ltd v F.S.Walton & Co Ltd, supra, at 658, where Dixon and McTiernan JJ. said:

In deciding this question, the marks ought not, of course, 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 effect of spoken description must be considered.  If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part.  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.  The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard.  Evidence of actual cases of deception, if forthcoming, is of great weight.

I agree with Mr Skelly that the applicant would be able to use its mark, if it was registered, in any form of lettering, including that covered by registration number 340859 - .  However, even if the present mark was rendered in such a fashion and, taking into account the common prefix, I do not think that the impression or recollection carried away by the average person would be that REESTRUCT and REEBOK were part of a family of marks.  If the subject mark was rendered in a way similar to the above, then I believe that customers would regard it as being merely a clumsy attempt to imitate the mark covered by registration number 340859 and that they would not be deceived or confused.  It is true that all of the trade marks share the prefix REE- and that this is not common on the Trade Marks Register in class 25 for words of more than one syllable.  However, even taking into consideration the observations of Sargent J. in London Lubricants (1920) Ltd’s Appn 1925 42 RPC 264 regarding the first syllable of words being the most important for the purpose of distinction, there are cases where the ending is not slurred - Re Trade Mark Cameo (1974) 1 NZIPR 1 at 6 (CAMEL and CAMEO) and distinctions can easily be made.  Here, the endings of the competing marks are totally different - on one hand -STRUCT, and on the other -BOK.  The respective words do not look or sound alike and, even if I take the broad view of notional fair use which Mr Skelly asked me to, I cannot agree that the words are, prima facie, deceptively similar enough to sustain an opposition under this section.

I therefore find that the present trade mark is not deceptively similar to those registered trade marks of the opponent and that, consequently, the opposition as it is based on the s.33 ground must fail.

Section 28 - Deception and confusion

The provisions of this section of the Act read as follows:

A mark -

(a) the use of which would be likely to deceive or cause confusion;
           (b) the use of which would be contrary to law;
           (c) which comprises or contains scandalous matter; or

(d) which would otherwise be not entitled to protection in a court of justice,

shall not be registered as a trade mark.

The test to be applied under paragraph (a) of these provisions, on which the opponent partly relies, has been well established by cases such as Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd , supra, where it was said, at 608:

Registration should be refused if it appears that there is a real risk that the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case the two products come from the same source.

However, that risk must extend to a substantial number of people likely to be concerned in the purchasing of the goods - Kendall Co v Mulsyn Paint and Chemicals (1963) 109 CLR 300. In assessing the reputation of the opponents' mark in Australia, the relevant date is that of lodgment of the opposed application, 31 August 1994 - Southern Cross, supra.

There can be no doubt, from the evidence and my own knowledge, that the opponent had, at the relevant date, a vast reputation for its trade marks on footwear and clothing.  This included the word REEBOK and the “crosscheck” device -  - referred to by Mr Skelly.  Mr Taylor, in his declaration included in the opponent’s evidence, exhibited a shoe which he declared he purchased at the Fairways market, Moorabbin, on 21 September 1996.  This shoe has on it the applicant’s present mark, together with a device identical to that shown above.  Mr Fazal said in his submissions that the applicant had not produced goods bearing any kind of stripecheck since the “end of 1994”.  He said further that the shoe obtained by Mr Taylor was an “old product” of some unidentified Chinese people from whom he had bought some goods.  However, given Mr Taylor’s unrebutted declaration, the goods bearing both marks appeared still to be for sale in September 1996 and were presumably so when the application was made for the present trade mark in August 1994.  It would therefore appear to be the case that there has been an attempt by the applicant to trade off the substantial reputation enjoyed by the opponent for its various trade marks.  Mr Fazal, in his submissions on behalf of the applicant, has not done enough to refute this inference - especially given the lack of any evidence in answer in the matter.

I have said, in relation to s.33, that I do not consider that the mark REESTRUCT, on its own, is deceptively similar to the opponent’s REEBOK marks, despite the shared and unusual prefix.  However, I am entitled to take all of the surrounding circumstances into consideration in deciding the probability of deception as per Romer J. in Jellinek's App’n. 63 RPC 59 and Kitto J. in Southern Cross Refrigerating Co v. Toowoomba Foundry Pty Ltd 91 CLR 592. Consequently, I do consider that the use of the present mark, in close proximity to the stripecheck device, would be likely to deceive and cause confusion to a reasonable number of potential customers - especially in a situation where purchases might be made hurriedly at a market, or in a similar situation.. Therefore, I find that the opponent is successful on the s.28(a) leg of its opposition.

Following the High Court decision in the Moo/Moove case, supra, the Registrar now follows the practice as laid out in the decision of Hearing Officer Homann in Titan Manufacturing Co v John Terrence Coyne 22 IPR 613. That is, that all paras of s.28 should be read together. In Canon Kabushiki Kaisha v Robert James Brook and Rachel Brook trading as The Cannon Watch Company 36 IPR 88, Tamberlin J, after considering the judgments in New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Limited (1990) 171 CLR 363, concluded that, in his view, the reasons for judgment delivered by members of the High Court left the matter open as to whether there was a need to find blameworthy conduct in opposition proceedings based on s.28(a) as opposed to expungement proceedings. He went on to find that:

Notwithstanding the diverse opinions expressed by members of the High Court in New South Wales Dairy Corporation case, I consider that I should follow the views expressed by the Full Federal Court in that case, with the result that in the case presently before me the opponent to the application for registration is required to demonstrate "blameworthy conduct".

This means that, for the opposition to be successful on the s.28 ground then, in addition to my finding that its use would be likely to lead to deception and confusion, it will also be necessary for me to find that the trade mark would not be entitled to protection in a court of law.

I cannot agree with Mr Skelly that, simply by choosing the trade mark REESTRUCT, then the opponent committed a blameworthy act.  It may, or may not, have intended to deceive some people by such a selection but, as I have said, the respective words, solus, are not close enough to be deceptively similar.  However, I do think that, by selling goods which had the present mark attached, in addition to what was clearly a copy of the opponent’s stripecheck device, it was the opponent’s intention to deceive in a situation similar to that which was found in Sporoptic Pouilleux SA v Arnet Optic Illusions Inc, supra.  Therefore, blameworthy conduct is to be ascribed to the applicant's conduct, and consequently the subject trade mark would therefore not be entitled to protection in a court of justice.

I find, therefore, that the requirements of paragraph 28(d) have been made out.  The opponent's case in terms of s.28 must therefore be successful.

Conclusion
I have found that the opponent has failed on the s.33 ground relied upon.  However, I have found, in relation to s.28, that the use of the present trade mark would be likely to deceive or cause confusion and that the mark would not be entitled to protection in a court of law.  It follows that the opposition as a whole has been successful and I therefore refuse to register the trade mark, the subject of the application

Costs
I can see no reason why costs should not follow the result and I therefore award costs in the matter to the opponent.

Ian Forno
Hearing Officer

26 November 1997