Johnson & Johnson v Kalnin

[1993] FCA 279

Re: JOHNSON AND JOHNSON
And: LAURENCE NASH KALNIN and MEDICAL INDUSTRIES AUSTRALIA PTY. LIMITED
No. NG47 of 1992
FED No. 279
Number of pages - 8
Trade Marks
(1993) 114 ALR 215

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Gummow J(1)

CATCHWORDS

Trade Marks - application for registration - opposition - existing registration by opponent - Trade Marks Act 1955, ss. 28 (a), 33 (1) - whether likelihood of deception or confusion.

Trade Marks Act 1955, ss. 28 (a), 33 (1)

Southern Cross Refrigerating Co. v Toowoomba Foundry Pty Limited (1954) 91 CLR 592, applied.

HEARING

SYDNEY, 28 April 1993

#DATE 4:5:1993

Counsel and solicitors Mr David Yates instructed by
for the applicant: Michell Sillar McPhee Meyer

Counsel and solicitors Miss Angela Bowne instructed by
for the respondents: Norton Smith and Co.

ORDER

THE COURT ORDERS THAT:

(1) The appeal be allowed.

(2) The opposition by the applicant to the grant of registration upon

trademark applications Nos. A452585 and A520821 be upheld.

(3) The respondents pay the applicant's costs of the proceeding in

this Court, and of the opposition before the Registrar of Trade Marks.

Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

JUDGE1

GUMMOW J This case involves the application of well-settled principles as to the operation of the Trade Marks Act 1955 ("the Act") to facts which essentially are not in dispute.

1. The applicant in this Court, Johnson and Johnson, is a United States corporation. Its Australian subsidiary is Johnson and Johnson Australia Pty Ltd. The applicant is the registered proprietor of a number of trade marks, each registration comprising the words "BAND-AID". Registrations A81017 and A183357 were registered with effect respectively from 4 February 1944 and 3 October 1963. Both registrations are in respect of goods in Class 5, the first being for "adhesive pads for wounds, cuts and sores", and the second for:
   

"Antiseptics and other pharmaceutical, veterinary and sanitary substances; infants' and invalids' foods; material for bandaging; material for stopping teeth, dental wax; disinfectants; preparations for killing weeds and destroying vermin."

In addition, there is a defensive registration registered under Part XII of the Act from 5 August 1959. The registration, D155298, is in respect of the following goods in Class 5:

"Pharmaceutical, veterinary and sanitary substances; infants' and invalids' foods; plasters, but not including dental plasters; material for bandaging; disinfectant."

As Mr Shanahan points out in his work "Australian Law of Trade Marks and Passing Off", 2nd ed., 1990 at p 235:

"Part D of the Register is intended for the more adequate protection of marks that have been used to such an extent for certain goods or services that their unauthorised use for quite different goods or services would be likely to mislead the public. The classic example of such a mark is 'Kodak', the owners of which were able to restrain the sale of 'Kodak cycles' by means of a passing off action. These marks cannot be given adequate protection by Part A or B registration because of the non-use provisions of the Act."

1. The evidence shows that since about 1945 adhesive dressings and bandages made with plastic or fibre have been sold in large numbers and have become well known to the public in Australia as goods of the manufacture of the applicant or its associated companies. There has been extensive advertising and promotion of the products in the print media and on television. This has been in addition to other promotional activities, such as competitions and in-store trade displays and point of sale material. In the years between 1973 and 1985 the total gross sales of products sold under the trade mark "BAND-AID" in Australia was in excess of $49m. and expenditure on advertising and trade promotion was in excess of $7m.

2. The market in Australia for adhesive dressings and bandages comprises medical institutions such as hospitals, and retailers, such as supermarkets and pharmacies. The purchasing decisions made by medical institutions are co-ordinated by employees with the direct responsibility of procuring products required properly to operate those institutions. At the retail level, purchasing decisions are made by buyers and pharmacists who tend to be influenced by the market share already held by the brands in question. Generally, the greater the market share held by any particular product, the greater the shelf space which will be provided to it and the greater the sales achieved. The evidence is that in Australia the "BAND-AID" products have been the market leader for adhesive dressings and bandages for more than 20 years.

3. The mark "BAND-AID" usually has appeared in red block letters on the packaging for the applicant's products. However, the trade mark was registered without any limitation as to colour, and therefore the registrations are deemed to be for all colours. This follows from sub-s. 27 (2) of the Act.

4. Paragraph 28 (a) of the Act provides that a mark the use of which "would be likely to deceive or cause confusion" shall not be registered as a trade mark. Sub-section 33 (1) states:
   

"33. (1) 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."

1. On 23 September 1986, the first respondent lodged application No. A452585 for registration of a trade mark, a representation of which is as follows:
   

BAND>>IT

The significant features of the application were the words "BAND" and "IT" separated by two chevrons. A divisional application, pursuant to s. 43 of the Act, was made in respect of the same trade mark on 6 October 1989. However, by reason of a direction under sub-s. 43 (3), the second application is deemed to have been lodged on the date of the lodgment of the first application, namely 23 September 1986. Any registration will have the date of the first application as the deemed date of registration. This would follow from sub-s. 53 (2) of the Act.

1. The result is that the first respondent has made application No. A452585 for goods in Class 10 being "supportive, elastic and suspensory bandages" and application No. A520821 for goods in Class 5 being "medical dressings and bandages included in Class 5". The second respondent is a company controlled by the first respondent. The first respondent had carried on business under the name "Medical Industries Australia". The assets of that business were transferred to the second respondent on its incorporation in 1987. On 4 October 1990, there was lodged with the Registrar of Trade Marks an application to register an assignment of the trade marks for which registration was sought.

2. Both applications were accepted by the Registrar, but registration was then opposed by Johnson and Johnson, pursuant to s. 49 of the Act. The present proceeding comes to this Court by way of "appeal" by the applicant, Johnson and Johnson, under s. 51 of the Act, from a decision given by a Delegate of the Registrar on 16 January 1992, under s. 50 of the Act. The decision was that the opposition by the applicant be dismissed and that both applications by the first respondent proceed to registration.

3. In this Court, the applicant relies principally upon the grounds of opposition provided by para. 28 (a) and sub-s. 33 (1) of the Act. Some reliance was also placed upon the point that the parties were claiming substantially the same right of proprietorship for the purposes of sub-s. 40 (1); see the discussion in Shanahan supra at 157-159. In view of the decision I have come to on the other grounds, it will be unnecessary to deal further with this point.

4. Counsel for the applicant submitted that the question before the Court, as to the objection based on para. 28 (a), was properly expressed as follows:
   

"Having regard to the reputation acquired by the name BAND-AID, is the court satisfied that the mark applied for, that is BAND>>IT, if used in a normal and fair manner in connection with any goods covered by the proposed registration will not be reasonably likely to cause deception or confusion amongst a sub-stantial number of persons."

Both counsel accepted that the relevant principles, stated in relation to s. 114 of the Trade Marks Act 1905 but equally applicable to para. 28 (a) of the Act, were to be found in Southern Cross Refrigerating Co. v Toowoomba Foundry Pty Limited (1954) 91 CLR 592 at 594-5. In that passage, Kitto J stated five propositions which, omitting citations of authority, are as follows:

"(i) In all applications for registration of a trade mark, the onus is on the applicant to satisfy the Registrar (or the court) that there is no reasonable probability of confusion. (ii) It is not necessary, in order to find that a trade mark offends against the section, to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of its occurring - it is sufficient if 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 that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt.

(iii) In considering the probability of deception, all the surrounding circumstances have to be taken into consideration. (This includes the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold, and the character of the probable purchasers of the goods). (iv) In applications for registration, the rights of the parties are to be determined as at the date of the application. (v) The onus must be discharged by the applicant in respect of all goods coming within the specification in the application . . . of the goods or class of goods in respect of which the registration is desired, and not only in respect of those goods on which he is proposing to use the mark immediately. And the onus is not discharged by proof only that a particular method of user will not give rise to confusion. The test is, what can the applicant do if he obtains registration?"

All of these propositions are of importance in the present case. In relation to the last proposition, the subsequent decision of the Full High Court in Berlei Hestia Industries Ltd v Bali Co. Inc. (1973) 129 CLR 353 at 362, emphasises, as Mason J put it, that the question of likelihood of confusion is to be answered not by reference to the manner in which the applicant for registration has used its mark in the past, but by reference to the use to which it can properly put the mark if it become registered.

1. Counsel for the respondents made the point that in an age where many mass-produced and pre-packaged items are sold in supermarkets rather than in response to an oral communication across a shop counter, the significance of aural as distinct from visual confusion is somewhat diminished. She referred, in that regard, to the view expressed by Whitford J in Mars GB Ltd v Cadbury Ltd (1987) RPC 387 at 395. His Lordship said:
   

"I have, of course, referred to those words of Parker J (in Pianotist Co.'s Application (1906) 23 RPC 774) which deal with the need to consider not only the look of the marks but their sound. However, in present day conditions, when all items of confectionary of this size - as is apparent from the evidence before me in this case - are sold packaged with the brand appearing clearly on the packaging, and when the goods are, for the most part, picked up by the customers, and on the goods as picked up the marks will be clearly visible, the question of sound is perhaps becoming of diminishing importance."

There is, I think, some force in this observation, but, nevertheless, it must be kept in mind that, for example, both aural and visual presentation are combined in television advertising.

1. Counsel for the respondents pointed to the evidence of trade by the respondents under their trade mark since 1986 and to the absence of evidence of any confusion with the Johnson and Johnson products. It was accepted that, if available, such evidence would have been admissible although it would have related to events since the application date of 23 September 1986. However, several points are to be borne in mind. First, the onus is on the respondents, as those supporting the applications, to show that there is no reasonable probability of confusion. Secondly, whilst such evidence, if it had been available, would have been material, allowance has to be made for the difficulty in obtaining such evidence; see, for example, the remarks of Lord Tomlin in In the Matter of an Application by Alex. Pirie and Sons Ld to Register a Trade Mark (1933) 50 RPC 147 at 160.

2. Since late 1986 or early 1987, the respondents have marketed a range of bandage products in all States and Territories of Australia under the trade mark "BAND>>IT". The packaging has always been in blue, red and white, although the shade of the blue has varied. There have been variations also in the chevron device. The applicant's products sold under the trade mark "BAND-AID" have been packaged in containers, the principal colours of which are blue and red, with some yellow and beige, against a white background. The respondents principally have supplied bulk distributors. They have not supplied pharmacies directly. Some of the distributors may have resold to pharmacies. However, the respondents have supplied Franklins supermarkets with approximately 240 dozen bandages per month for retail sale throughout Australia. The first purchase by Franklins was in November 1987. The products sold to Franklins supermarkets, as a proportion of the total number of products marked with the trade mark "BAND>>IT" and sold elsewhere by the respondents, is less than 5%.

3. Counsel for the respondents also stressed the significance for this case of the concept of "the idea" of a mark. Thus, the presence of some common "idea" may tip the scales against registration because the "idea" is more likely to be recalled than the precise details of the mark; see Jafferjee v Scarlett (1937) 57 CLR 115 at 121-2.

4. On the other hand, and this is the particular point made by counsel for the respondents in the present case, the suggestion of differing ideas may serve to reduce the risk of confusion, and thus to favour registration; see Shanahan supra at 175.

5. In the present case, it is submitted that, (i) in the compound represented by the applicant's trade mark "BAND-AID", the element "BAND" functions adjectivally by qualifying the noun "AID", and (ii) in the compound "BAND>>IT", the first element functions as a verb and the second as a pronoun. Thus, it is said for the respondents that a "BAND-AID" is an "aid" as in paramedical "first aid" which consists of a band, whereas the second trade mark is an expression suggestive of a short imperative sentence, "band it".

6. On the hand, there is much to be said for the view of one of the expert witnesses, Mr B.K. Martin, stated in the course of his cross-examination, that:
   

"With respect I don't believe the average Australian speaker thinks much about these things at all. They're in ordinary every day usage or put it this way, my experience as a teacher of linguistics has led me to believe that it is extremely difficult to get even volunteer students to get a secure mastery of grammatical terminology, so this is only a personal opinion and I suppose it's impressionistic, but I don't believe that most speakers and users of Australian English are particularly conscious of linguistic structure."

That view is consistent with the line of authority which stresses that marks should not be compared side by side because customers are likely to have but an "imperfect recollection" of a mark and thus to confuse it with another, although the two are not the same. The authorities are collected in Shanahan supra at 173-4.

1. Section 33 operates rather differently to para. 28 (a). Thus it is said, Shanahan supra at 151:
   

"Section 33 does not require the prior mark to have been in use or to have acquired a reputation in the market. What is necessary is that it be the subject of a registration or application of earlier priority, that the two marks be 'substantially identical' or 'deceptively similar' and that the goods or services be 'of the same description' or 'closely related' as the case may be . . . By section 6 (3), a trade mark is deemed to be deceptively similar to another trade mark if it so nearly resembles that other trade mark as to be likely to deceive or cause confusion. This definition thus assimilates the criterion for conflict under section 33 to that under section 28 (a)."

Counsel for the applicant put as follows the issue which arises under s. 33 in this case:

"Assuming user by Johnson and Johnson of its mark, 'BAND-AID', in a normal and fair manner on any of the goods covered by the registration of its mark, is the Court satisfied that there will be no reasonable likelihood of deception and confusion amongst a substantial number of persons if the applicant for registration also uses his mark, 'BAND-IT', normally and fairly in respect of goods covered by his proposed registration."

1. It should be emphasised that the issue in the present case is whether the respondents' applications should proceed to registration in face of the existing registrations held by Johnson and Johnson. The issue is not whether there has been or would be any passing-off or contravention of s. 52 of the Trade Practices Act 1974 by reason of the past or future user of the two marks in trade or commerce in Australia. The use by the respondents of the "BAND>>IT" trade mark has continued for some years. In this case the applicant seeks no finding or relief which would bar further trade by the respondents under this mark.

2. In my view, the applicant has made out its case that the trade mark for which the respondents seek registration so nearly resembles the Johnson and Johnson trade mark as to be likely to deceive or cause confusion, within the meaning of the principles expounded by Kitto J in the Southern Cross case.

3. As to visual appearance, I make allowance for the use of the chevron device rather than a hyphen to separate the two components of the "BAND>>IT" mark for which the respondents seek registration. I also make allowance for the somewhat different print in which the two marks, as registered and as applied for, appear. However, the evidence suggests and common experience would affirm, that fine details such as different type faces are likely to be overlooked by those to whom these marks will be addressed in trade.

4. I am impressed by the presence in each mark of the common first element "BAND" and by the joinder of the two elements by a hyphen or chevron device. It is true that the second elements, "AID" and "IT" differ but the comparison must be between the marks as a whole. Also, weight has to be given to the operation of the so-called doctrine of imperfect recollection.

5. Counsel for the respondents submitted that the Johnson and Johnson mark is so famous in Australia that the likelihood of any imperfect recollection should be discounted. The evidence does not admit any conclusions as to the precise mechanisms involved in cognitive processes. But it does suggest that the process of perception and recognition of a word involves not so much the reading of the entire word or, in this case, the compound expressions "BAND-AID" or "BAND>>IT" but the seeing and identification of certain features which are then matched to that which is contained in the memory, so that the word then is recognised. It is that process which is liable in the present situation to lead persons into error.

1. As to aural comparison, the marks consist of the same first, and dominant, primary syllable. Whilst the second syllable is not identical, there are similarities. In each case the final syllable is comprised of a vowel followed by a consonant and the evidence suggests that in Australian spoken English the final consonant tends not to be precisely articulated.

2. Taking into account the overall effect of aural and visual similarities and considering them and the whole of the evidence, in the light of the principles expounded in the Southern Cross case, I conclude that the opposition based upon para. 28 (a) of the Act should succeed. I reach the conclusion also that the ground under s. 33 is made out. I do so on the footing that the respondents' mark so nearly resembles the Johnson and Johnson mark as to be likely to deceive or cause confusion, with the result that it is deceptively similar to the Johnson and Johnson mark, within the meaning of s. 33.

3. There was some suggestion in the course of argument that the potential for confusion would be sufficiently diminished if the respondents' mark were limited in some way as to colour and as to the scope of goods for which it was registered, by reason of the imposition of conditions or limitations under s. 44. This possibility was raised, as a fall-back position, by counsel for the applicant. It was resisted by counsel for the respondents. In my view, the grounds of opposition under ss. 28 and 33 have been made out and this is not the case for the imposition of any condition of this kind.

4. The appeal is allowed with costs. The opposition by the applicant to the grant of registration upon trade mark applications Nos. A452585 and A520821 is upheld. The respondents should pay the applicant's costs of the proceeding in this Court and of the opposition before the Registrar. The exhibits may be returned.