Jones Investment Co. Ltd v Bonny Lawrence and Michael Burge

[2003] ATMO 14

TRADE MARKS ACT 1995

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

Re:Opposition by Jones Investment Co. Inc to registration of trade mark application 872607(25) LEI THONG & device and 872608(25) - LEI THONG - filed in the names of Bonny Lawrence and Michael Burge.

Date of decision:  5 March 2003  

Delegate:  Hearing Officer Mary Skivington

Representation:  Opponent:

Elisa McCutcheon of Cullen & Co, Patent & Trade Mark

Attorneys

Decision:Section 52 opposition - opposition unsuccessful - costs awarded against the opponent.

Background

Bonny Lawrence and Michael Burge, ('the applicants'), filed trade mark applications 872607 and 872608 to register two trade marks, on 12 April 2001. The nominated goods for both applications, clothing, footwear and headgear, are in class 25.  Trade mark number 872608 is for the word mark LEI THONG and 872607 is for a stylised rendering of the same words and a flower device reminiscent of an azalea, as depicted below.

 

Both applications were accepted at the first report and their acceptances were advertised in the Official Journal of Trade Marks on 20 and 29 September 2001 respectively. R.S.V Sport, Inc. filed notices of opposition on 3 December 2001. Numerous grounds of opposition were listed in the notice but the only grounds pursued come under the provisions of sections 44, 58 and 60 of the Trade Marks Act 1995, ('the Act').  Each party filed and served its evidence and on 17 December 2002 the opponent requested a hearing.  On 11 February 2003 R.S.V Sport, Inc, assigned the trade marks cited in the notice of opposition to Jones Investment Co Inc. and requested that this entity's name be substituted as the opponent. The matter came on for hearing before me, as a delegate of the Registrar of Trade Marks, on 18 February 2003, in Canberra.  The opponent is the owner of the four registered trade marks shown below, all of which have earlier priority dates than the subject applications.

Trade mark No.	Priority date	Trade Mark	Goods
782897	13/01/99	Apparel including jeans, shirts, jackets, vests, pants,sweaters, jump-suits, shorts, skorts, overalls, shortalls, dresses, skirts, T-shirts and sweatpants; footwear; headgear
799361	05/07/99	Clothing including jeans, shirts, jackets, vests, pants, sweatpants, jumpsuits, shorts, skorts, overalls, shortalls, dresses, skirts, T-shirts, tops, bottoms, lingerie, socks, belts, coats, jackets, hats, swimwear, underwear, tank tops and pyjamas; footwear and headgear
799362	23/02/99	Clothing including jeans, shirts, jackets, vests, pants, sweatpants, jumpsuits, shorts, skorts, overalls, shortalls, dresses, skirts, T-shirts, tops, bottoms, lingerie, socks, belts, coats, jackets, hats, swimwear, underwear, tank tops and pyjamas; footwear and headgear
799363	03/02/99	L.E.I.	Clothing including jeans, shirts, jackets, vests, pants,  sweatpants, jumpsuits, shorts, skorts, overalls, shortalls,  dresses, skirts, T-shirts, tops, bottoms, lingerie, socks,  belts, coats, jackets, hats, swimwear, underwear, tank tops and pyjamas; footwear and headgear

The Evidence

Evidence in support

Declarant	Referred to as:	Date made	Exhibits
Melvin B. Geliebter	Geliebter	27/6/02	MBG-1 to MBG-10

Evidence in answer

Declarant	Referred to as:	Date made	Exhibits
Bonny Lawrence	Lawrence	25/9/02	BL-1 to BL-9

Opponent's declaration

Melvin B. Geliebter, the president and chief financial officer of R.S.V. Sport, in his declaration dated 27 June 2002, declares that his company is involved in the manufacture, marketing and sale of clothing, footwear and accessories.  He reports that the L.E.I. trade marks are registered in many jurisdictions for goods in class 25.  He says the trade marks were first used in November 1989 and have been continuously used since that date.  The declarant states that the various trade marks are used in the United States and other countries including Australia and that R.S.V. Sport has a world-wide reputation.  He reports that in the United States the goods are sold through major department stores and currently they are also offered for sale via the websites of a number of these stores.  Australian customers, he declares, are able to purchase L.E.I. branded goods this way from at least one of these stores, that being JC Penney.  The Geliebter declaration includes as exhibits pages from American editions of a number of fashion magazines such as, Elle, Seventeen, YM and Sportswear International, swing tags and labels and photographs of casual fashion items carrying varying versions of the L.E.I. trade marks.  He declares that the trade marks are extensively advertised and promoted through advertisements and editorial pieces in magazines, via R.S.V. Sport's website and by means of promotional contests conducted in association with recording artists.  According to the Geliebter declaration, by reason of the similarities between the opponent's trade marks and the subject trade marks and the extensive reputation of the opponent's trade marks, registration of the subject marks will give rise to public deception and confusion.

Applicant's declaration

In her declaration in answer, dated 25 September 2002, Bonny Lawrence declares that she has been in the fashion industry in Australia for more than twenty years and that she is the proprietor and head designer of two businesses, Bonny Lawrence Art Couture and Lei Thong. She declares that she is co-author of the trade marks.  Exhibit BL-2 contains a number of drawings showing the development of the device element of trade mark number 872607.  She declares that through Bonny Lawrence Art Couture she has promoted products with a 'tropical/beach/tourist lifestyle' theme.  In addition to promoting her goods in Australia she has sought to market her goods internationally.  Ms Lawrence argues that her goods are for a different market from the opponent's market and that the respective trade marks 'have a completely different appearance'.

Submissions and the law

Opponent's submissions

Ms McCutcheon began her submissions by asserting that the applicants are not the owners of the subject trade marks because, she said, they do not intend to jointly use the trade marks.  She based this allegation on the evidence that Ms Lawrence has two businesses registered in her name, exhibit BL-I, and this in her opinion indicates an intention for only Ms Lawrence to use the trade marks.  I will deal with this issue first.  I am satisfied that the evidence shows that Ms Lawrence, on 6 March 1997 was the owner of a registered business named Bonny Lawrence Art Couture and on 26 June 2000 was the owner of a registered business named Lei Thong, but this does not go any way towards establishing that the applicants are not the owners of the trade marks and does not demonstrate a lack of intention by both applicants to jointly use the trade marks.  This ground of opposition has not been established.

Ms McCutcheon submitted that the applicants' trade marks are substantially identical with and deceptively similar to the opponent's trade marks and the goods claimed in the opposed trade mark applications encompass all those specified in the opponent's registrations. She noted that the opponent uses its trade marks in respect of a wide range of apparel, including footwear, essentially directed to the female market.  She said that as this market is the same market to which the applicants' goods are directed the likelihood of deception and confusion is high.

She cited the relevant tests to be applied in assessing substantial identicality as set out in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407. She submitted that the primary feature of the opponent's marks is L.E.I while that of the subject marks is LEI and that these features are substantially identical. She submitted that the word THONG is descriptive of goods included in the specification and should be given less weight in a comparison of the trade marks than the distinctive feature LEI. She said that if the trade marks are not substantially identical they are, in her opinion, certainly deceptively similar. She argued that in respect of trade mark 872607 the device does not greatly assist in distinguishing the trade marks. In support of her argument she referred to the comments of Luxmore LJ in Rysta Ltd's Appn. (1943) 60 RPC 87 at 108 on the importance of first impressions and the necessity to allow for imperfect recollection. In respect of deceptive similarity she said the following tests set down by Parker J in the Pianotist Co's Appn (1906) 23 RPC 774 are particularly relevant:

You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks.

Ms McCutcheon said that if the opponent used its trade mark L.E.I in respect of thongs it would be entitled to promote them as L.E.I. THONG which, she said, is visually and aurally identical to LEI THONG.  She further submitted, that while some orders for clothing are placed in person, it is likely that offers for sale and promotion of the products will be made over the telephone, by facsimile and over the Internet and in these instances the potential for deception and confusion is high, and the device part of trade mark 872607 will be of little or no significance in differentiating the trade marks in these methods of trading.

Ms McCutcheon was critical of the applicants' evidence stating that it largely consisted of unsupported assertions and did little to address the issue of the high likelihood of deception and confusion and moreover, did not address the issue of honest concurrent use. The similarities, in the trade marks, the goods and the trade channels, mean she said, that the applicants would need to have used their trade marks extensively in order to satisfy the requirements of section 44(3)(a) of the Act. She claimed that use by the applicants of their trade marks is relatively minimal and insufficient to satisfy this requirement. Moreover, she asserted, as the opponent has a large commitment to and investment in its trade marks the balance of convenience must weigh heavily in the opponent's favour. Ms McCutcheon asserted that in opposition proceedings the onus is on the applicant to establish that there is no reasonable likelihood that use and registration of the applied for trade marks will deceive or cause confusion.

In respect of the opponent's reputation in its trade marks Ms McCutcheon argued that the evidence filed in support of the opposition establishes that for the purposes of section 60 of the Act the L.E.I. trade marks are used in Australian and have acquired the requisite reputation in Australia.

Applicants' submissions

Ms Lawrence submitted that although the goods of both parties are in class 25 this is insufficient to establish that the goods are similar. She argued that her goods are created for a 'beach/tropical/tourist' lifestyle and the opponent's goods are 'young casual wear'.  These markets, she reported, are quite different. The trade marks are not deceptively similar, she said, because the opponent's trade marks are for the letters L, E and I separated with punctuation marks whereas the opposed trade marks both contain two words LEI and THONG. In particular, she said, trade marks 782897and 799361 consisting of the letters L.E.I and the words LIFE, ENERGY and INTELLIGENCE are completely dissimilar to the applicants' 'floral logo trade mark'.  The impression left in the mind by the applied for trade marks is of a 'floral tropical image' and the opponent's trade marks 782897and 799361 create an image of a healthy lifestyle.  Ms Lawrence said she is a frequent reader of magazines in order to see the 'directions fashions are taking' and that until the opposition was filed she had never heard of R.S.V Sport, Inc. and had never seen any of the L.E.I trade marks used in Australia.  She said the opponent does not appear to have a high profile in Australia and noted that the opponent did not indicate what percentage of its sales and advertising figures related to sales and advertising in Australia.  Ms Lawrence also contended that Australian purchasers would have to 'look really hard' to find L.E.I trade marked goods on the Internet. 

In her declaration and in her submissions Ms Lawrence referred several times to the descriptive nature of the words LEI THONG.  At this point I note that the words are an unusual and ungrammatical combination that would not ordinarily be used to indicate the nature or characteristics of the goods  In F.H.Fauldings & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965 11 CLR 537 at 555 Kitto J. said:

...the question to be asked in order to test whether a word is adapted to distinguish one trader's goods from the goods of all others is whether the word is one which other traders are likely, in the ordinary course of their businesses and without improper motive, to desire to use upon or in connexion with their goods.

I do not think it likely that other traders, in the ordinary course of their businesses and without improper motive, will want to use the term LEI THONG in respect of their similar goods.  I am satisfied in terms of section 41 of the Act that this trade mark is capable of distinguishing the applicants' goods

The law

Section 55 of the Act provides:

Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:

(a) to refuse to register the trade mark; or

(b) to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

having regard to the extent (if any) to which any ground on which the application was opposed has been established.

Under the provisions of the 1995 Act, in contrast with the provisions of the 1955 Act, the opponent in opposition proceedings, bears the burden of satisfying the Registrar that its grounds of opposition have been established.  The decision of the Federal Court in Registrar of Trade Marks v. Woolworths Ltd 45 IPR 411, confirms that this is so, particularly in relation to the provisions of section 44. French, J. stated at page 413:

'… there has been an important change in the law in that the onus is no longer, as it used to be, on an applicant to establish registrability of the proposed mark.'

and at paragraph 45

The position now is that the Registrar and the Court at first instance would need to be satisfied that there was a reasonable likelihood of deception or confusion before denying acceptance of the application for registration.

and at paragraph 46:

The question for the Registrar and the Court is not whether consumers might be confused (in the sense of wondering about common origin or connection) but whether there is a reasonable likelihood that they will be confused.

and at paragraph 47:

The decision to reject an application regularly made must now be based upon positive satisfaction that a ground for rejecting it is made out.

Section 44

So far as it concerns this application section 44 of the Act provides:

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.

.

(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.

In order to satisfy the grounds of opposition under the provisions of section 44(1) of the Act, the opponent must satisfy the following three conditions in respect of a live trade mark:

·     That it has an earlier priority date;

·     That it covers similar goods or closely related services; and

·     That the applied for trade mark is substantially identical with, or deceptively similar to the opponent's mark.

It is not disputed that the opponent's registered trade marks have earlier priority dates than the subject applications so the first condition is satisfied.

The subject applications are for broad specifications that read clothing, footwear and headgear. If these applications should proceed to registration the rights the applicants' would gain would allow them to use their trade marks for all of the goods specified in the registrations cited by the opponent.  I am obliged to consider the situation as if both parties use or intend to use their trade marks to the full extent of their specifications and for this reason I am satisfied that the goods are similar and that the demands of the second condition are met.

I turn now to the third condition concerning the issue of substantially identical or deceptively similar trade marks.  I must decide if the two trade marks,

 

LEI THONG    and

L.E.I.

 

are substantially identical or deceptively similar to the  trade marks shown below.

782987  79361  799362  799364  

A side by side comparison of the LEI THONG  trade marks with all of the L.E.I. trade marks shows numerous differences so that they are clearly not substantially identical. 

On the matter of deceptive similarity Dixon and McTiernan JJ said in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 at 658:

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 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.

Accordingly, the comparison to be made is one between the impression based on the recollection of the opponent's trade marks that persons of ordinary intelligence and memory would have and the impressions those same persons would derive from the LEI THONG marks.  This may be an imperfect recollection.  The test is to be applied in the knowledge of one mark, and the presence of the other, taking into account the market and other surrounding circumstances in which the goods are traded and trade marks are used - Pianotist Co's Appn supra.

I believe that the 'ordinary person' will see, pronounce and remember the opponent's trade marks as the letters L. E. I. which form the essential or only feature of these trade marks. Letters are a shortened form of reference and they are widely accepted and used as such.  For instance, letters are frequently strung together to represent, the initials for person, (LBJ), an organization, (OPEC), a piece of legislation, (OH&S Act) a drug (LSD), a drink (OJ) or a phenomenon, (REM).  The inclusion of the words LIFE, ENERGY and INTELLIGENCE in two of the opponent's trade marks contrasts with the initial format of letters presented as L.E.I. and emphasise the non-word appearance of this letter and punctuation combination.

LEI and THONG on the other hand are two words in common English usage. A lei is a garland or wreath of flowers or leaves, for wearing around the neck or on the head, frequently associated with the welcome given to visitors to Hawaii, and a thong is an item of footwear, a long narrow strip of animal hide or leather for fastening or an item of underwear.  Although the applicants' trade marks consist of or contain words with known meanings, I think at first sight, it is as likely as not  that consumers will read the words LEI THONG as the name of a person.

I do not think it is a common practice for customers to spend much time analysing trade marks, however, it may occur to some, that LEI and THONG are an unusual combination of words with known meanings. However, it is not at all likely that potential purchasers will mentally go to the effort of inserting punctuation marks into the well known word LEI to create three letters, even if they are aware of the opponent's trade marks. The additional word THONG, although descriptive of some items included in the specification, and the flower device in trade mark number 872607, for the purposes of section 44, contribute strongly to the identity of the trade marks and make it less likely that possible customers would perceive LEI as L.E.I. I consider that taken as a whole, the impression created by each of the applicants' trade marks is quite different from that created by the opponent's trade marks. I am satisfied that neither of these trade marks is deceptively similar to any of the opponent's trade marks.

I have found that the trade marks are neither substantially identical with nor deceptively similar to each other and for this reason I have no need to consider the subject trade marks under the honest concurrent provisions of subsection 44 (3) (a) of the Act.  This ground of opposition has not been established.

Section 60

Section 60 of the act provides:

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

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

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

Sections 44 and 60 share the threshold tests of substantial identity and deceptive similarity. Where, as in this case, the trade marks in question have been found to be neither substantially identical with nor deceptively similar to each other, the balance of section 60 does not need to be considered. This ground of opposition has not been established.

Decision

The opponent has not established any of its grounds of opposition. I therefore direct that, subject to payment of any outstanding registration fees, trade mark numbers 872607 and 872608 may proceed to registration one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that the registration shall not occur until the appeal has been decided or discontinued.

Costs

As to costs, I see no reason why costs should not follow the event. I direct that the opponent pay the costs of the applicant in accordance with the Official Scale (Schedule 8 of the Trade Marks Regulations 1995)

Mary Skivington

Hearing Officer

Trade Marks Hearings

5 March 2003