Keune Haircosmetics Manufacturing BV v Guangzhou Hodm Professionals Cosmetics Co Ltd - [2017] ATMO 143

TRADE MARKS ACT 1995

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

Re:Opposition by Keune Haircosmetics Manufacturing B.V. to registration of trade mark application 1726666 (3) OTTO KEUNIS in the name of Guangzhou Hodm Professionals Cosmetics Co., Ltd.

Delegate:	Michael Kirov
Representation:	Opponent: Andrew Fox of Counsel instructed by Stuart Green and Teresa Elmey of DibbsBarker Applicant: Written submissions by Jacqui Pryor of Mark My Words Trademark Services, settled by Andrew Sykes of Counsel
Decision:	2017 ATMO 143 Opposition under s 52 of the Trade Marks Act 1995 – s 60 considered – confusion likely because of reputation of Opponent’s trade mark – opposition established and registration refused.

Background

This is an opposition brought by Keune Haircosmetics Manufacturing B.V. (“the Opponent”) pursuant to s 52 of the Trade Marks Act 1995 (“the Act”) to registration of the trade mark subject of the application detailed below in the name of Guangzhou Hodm Professionals Cosmetics Co., Ltd. (“the Applicant”):

Application Number:        1726666
Filing Date:  8 October 2015
Goods:Class 3: Hair care preparations; Shampoos; Cleaning preparations; Polishing preparations; Abrasive preparations; Essential oils; Incense; Cosmetics for animals; Air fragrancing preparations; Breath freshening sprays; Cosmetics                  (“the Designated Goods”)
Trade Mark:  OTTO KEUNIS            (“the Opposed Mark”)

Acceptance of the Opposed Mark for possible registration was advertised in the Australian Official Journal of Trade Marks on 3 March 2016. The Opponent filed a Notice of Intention to Oppose on 2 May 2016, followed by a Statement of Grounds and Particulars (“SGP”) on 25 May 2016. The Applicant filed a Notice of Intention to Defend the application on 14 June 2016.
I heard the matter as a delegate of the Registrar of Trade Marks in Canberra on 22 September 2017. Andrew Fox of Counsel, instructed by Stuart Green and Teresa Elmey of DibbsBarker, appeared for the Opponent and also filed written submissions prior to the hearing. The Applicant relied on written submissions only, these having been prepared by Jacqui Pryor of Mark My Words Trademark Services and settled by Andrew Sykes of Counsel.

Grounds of Opposition, Onus and Standard of Proof

The SGP lists grounds corresponding to ss 42(b), 44, 58, 60 and 62A of the Act but only the s 42(b), s 44 and s 60 grounds were pressed at the hearing. To succeed the Opponent bears the onus of establishing at least one of these three grounds, with the standard of proof required being the ordinary civil standard based on the balance of probabilities.[1] That said, I have only found it necessary to address the s 60 ground in this decision and this is discussed below. Of course should the decision be appealed, it would remain open to the Opponent to plead any ground it considered relevant in proceedings before the Court.
[1] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599 at [6] to [26], affirmed by the Full Federal Court (Besanko, Jagot & Edelman JJ) in Telstra Corporation Limited v Phone Directories Company Pty Ltd (2015) 116 IPR 207 at [132]-[133].
The date for assessing the registrability of the Opposed Mark is the date it was filed, 8 October 2015 (“the Relevant Date”).[2]
[2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, Kitto J at 595.

The Evidence

For their evidence the parties rely on the declarations described below, Green 1, Green 2 and Teoh being Statutory Declarations and the balance made pursuant to the Act and reg. 21.6 of the Trade Marks Regulations 1995 (“the Regulations”):

Evidence in Support

▪ Johannes Van der Velden made 7 September 2016, with Exhibits JV-1 JV-14 (“Velden”)

▪ Larry Gerace made 19 September 2016 (“Gerace 1”)

▪ Edward Gittos made 19 September 2016 (“Gittos 1”)

▪ Leanne Devine made 20 September 2016 (“Devine 1”)

▪ Holly Galea made 21 September 2016 (“Galea”)

Evidence in Answer

▪ Zhu Chun Hua made 22 December 2016, with Exhibits OK-01 to OK-09 (“Zhu”)

(Exhibit OK-07 comprises copies of 7 declarations by distributors of the Applicant’s products in Australia, Denmark, Hong Kong, Vietnam, Thailand, India and Egypt.)

Evidence in Reply

▪ Natasha Marshall Teoh made 3 March 2017, with Exhibits NMT-1 to NMT-19 (“Teoh”)

▪ Stuart Green made 3 March 2017, with Exhibits SG-1 and SG-2 (“Green 1”)

▪ Leanne Devine made 3 March 2017, with Annexure MG-1 (“Devine 2”)

▪ Larry Gerace made 3 March 2017, with Annexure LG-1 (“Gerace 2”)

▪ Edward Gittos made 2 March 2017, with Annexure EG-1 (“Gittos 2”)

▪ Cheryl Schmitzer made 3 March 2017, with Annexures CS-1 (“Schmitzer”)

▪ Stuart Green made 6 March 2017, with Exhibit SG-1 (“Green 2”)

Overview of the Evidence

It is convenient to commence with an overview of the parties’ evidence, beginning with the Opponent’s evidence in support. Johannes Van der Velden is Director and co-founder of an Australian company trading as “Keune Australia,” which has represented the Opponent in Australia since 1995 (“Keune Australia”). He says that the trade mark KEUNE (“the Opponent’s Mark”) “and associated marks such as KEUNE BLEND, KEUNE DREAM COLOR, KEUNE Logo, KEUNE HAIRCOSMETICS Logo and KEUNE TINTA COLOR” (collectively, “the KEUNE Trade Marks”) have “been used in Australia since at least as early as the 1960s” for goods said to “broadly cover those relating to [the Opponent’s] well-known range of haircare products, including shampoos, conditioners, permanent wave lotions, hair colouring products, hair lightening products, styling lotions and hairspray, hair treatments and lotions.” I will hereafter refer to such goods bearing one or more of the KEUNE Trade Marks as “the Opponent’s Goods.”
The following matters set out in Velden and touching on the claimed reputation of the KEUNE Trade Marks were not in contention:
10. I am aware that [the Opponent] was founded in Amsterdam, The Netherlands in 1922. [The Opponent] is a manufacturer of haircare products and is [a] company dedicated to providing professional hairdressers with high-quality products and excellent service. [The Opponent] has a strong focus on professional hair colour, styling and care. All its products are developed in one of Europe’s most advanced hair cosmetic laboratories, where the highest quality, most sophisticated ingredients and the use of innovative hair technology is combined together to create products which provide reliable and consistent solutions to people’s hair needs, wants and desires.
11. I am aware that [the Opponent] has exported [the Opponent’s Goods] to Australia since at least as early as 1960. Export sales to Australia were active during the period 1960 to 1995 via a number of importers with Salon Haircare in Adelaide, South Australia.
12. In 1995, [Keune Australia] was founded to establish permanent, continuous representation for [the Opponent] in Australia. From the beginning, [Keune Australia] has been committed to distributing the [Opponent’s] Goods according to [the Opponent’s] “salon only” principle and continues to operate with the same high standards, morals and ethics in which [the Opponent] has stood by.
13. Since 2005, [Keune Australia] has also operated the Keune Academy which provides education and training to hairdressing salons through courses and classes on how to use the [the Opponent’s Goods] in Australia. Since 2013, more than 3,000 hairdressers have attended courses or classes at the Keune Academy around the country…
14. [Keune Australia] is authorised to use the KEUNE Trade Marks in Australia on behalf of [the Opponent] and its related entities.
15. [Keune Australia] operates a team of sales representatives calling on a minimum of 360 hairdressing salons each and every working day. [Keune Australia] distributes the [Opponent’s Goods] exclusively to hairdressing salons via sales staff, distributors and cash and carry outlets throughout all states and territories of Australia.
16. In excess of 3,300 hairdressing salons currently stock the [Opponent’s Goods] in Australia. … Since 1995, [Keune Australia] has sold more than 44 million colour applications for use in salons, with an approximate market share of 15% of all colour applications sold in salons in Australia.
17. In Australia, all Goods are sold under the KEUNE Trade Marks and the mark is prominently displayed on the front of each product used and sold. Since [Keune Australia] became [the Opponent’s] representative in Australia, the manner in which the KEUNE Trade Marks have been used on the [Opponent’s] Goods has not changed. Now shown to me and [reproduced in part below] are images of a selection of the range of Goods sold under or by reference to the KEUNE Trade Marks in Australia:

Mr Van der Velden annexes confidential figures setting out the value of sales of the Opponent’s Goods in Australia from 1995 to 2016, these on the face of it being substantial. He goes on to detail several of the Opponent’s advertising and promotional activities since 1995, which include advertising in magazines including Vogue Australia, Marie Claire, lnstyle and Glamour, distribution of brochures and catalogues, posters, banners and point of sale material to salons, and participation in bi-annual industry shows in Melbourne and Sydney. He exhibits archived screenshots from 2005 onwards of the Opponent’s website and screenshots from some of the social media channels used by Keune Australia to promote the Opponent’s Goods, “including Facebook, Instagram, Pinterest, Periscope, YouTube, Twitter and Linkedin.” He annexes a confidential table detailing the amounts spent on advertising and promotion from 1995 to 2016. Again, these figures are on their face substantial.
In addition to operating the Keune Academy, Mr Van der Velden also attests to Keune Australia’s further promotional activities:
24. In 2005, I founded the Keune Foundation with my wife Theresa, which provides financial support to Australian families who have a child under the age of 18 who has been diagnosed with a life threatening illness. [Keune Australia] generates the funds and provides all administrative support to the Keune Foundation. Funds are generated through sales of [the Opponent’s Goods] and events. For example, the product KEUNE TINTA COLOR, generates more than AU$100,000 per annum for the Keune Foundation. Other items that contribute to the Keune Foundation are special Mother’s Day packs and Christmas packs. In addition, many salons that stock [the Opponent’s Goods] hold their own fund raising events for the Keune Foundation.
25. Since 1995, [Keune Australia] has organised an annual themed ball to raise funds for the Keune Foundation. The Keune Foundation Ball is one of the largest events for hairdressers in Australia with each year attracting over 1,000 hairdressers in attendance…
26. Since its inception, the Keune Foundation has assisted more than 500 Australian families.
Mr Van der Velden concludes with his observations on the Opposed Mark itself, saying he considers it “deceptively similar” to the KEUNE Trade Marks because (a) it “contains the dominant word element KEUN” and (b) “the word ‘otto’ is another term for ‘attar’, a fragrant essential oil, typically made from rose petals which, in my view, has descriptive connotations in respect of the [Designated Goods].” Thus, he says, “any visual and aural differences between the mark KEUNE and OTTO KEUNIS are minor and insignificant, and as the dominant and non-descriptive element of each mark is identical, this is likely to lead to confusion amongst consumers.”
He says that the Designated Goods are “identical and/or closely related” to the Opponent’s Goods and “are provided to consumers via the same trade channels, namely hairdressing salons.” In support he exhibits screenshots from the website of the Applicant’s Australian distributor “Otto Keunis Australia” (“OKA”) (at commenting:
31. … I note that in the screenshots, the haircare products sold under the OTTO KEUNIS trade mark are described as “professional luxury haircare. Used and recommended by leading professional hair stylists”. In addition, the Applicant has adopted a font for the trade mark OTTO KEUNIS that is very similar to the font used by [the Opponent] for [the Opponent’s] Goods.
32. I note from [the screenshots] that the Applicant has listed 5 stockists’ locations in Australia under the tab “STOCKIST” which indicates that there is very low support and use of the OTTO KEUNIS haircare products.
33. I am concerned that if the use of the OTTO KEUNIS mark is further promoted that it will result in consumer confusion.
34. Given the descriptiveness of the word OTTO, there is a substantial risk that use of the OTTO KEUNIS trade mark will result in consumer[s] mistakenly believing that the goods provided under the OTTO KEUNIS trade mark are a brand extension of the [Opponent’s] Goods or are somehow associated with or endorsed by the Opponent.
It is convenient here to note that at the hearing Mr Fox specifically drew my attention to further aspects of the exhibited screenshots, such as the website’s “2016” copyright notice and the (apparently misleading) use of the symbol “®” after the OTTO KEUNIS brand name on the labelling of the products shown. He noted that references to the Applicant’s name and brand shown in the screenshots were almost invariably in the form “OTTO KEUNIS AUSTRALIA,” suggesting, he submitted, affiliation with an overseas enterprise which Australian consumers might assume was the Opponent. He added it was clear that the Applicant was not only aware of the Opponent’s Goods, but that it was apparently itself concerned about the possibility of confusion with the Opponent’s Mark given the exhibited webpages contain the following copy:[3]
Otto Keunis is a trademark of Guangzhou HODM Professionals Cosmetics Co., Ltd. The Otto Keunis brand, and Otto Keunis Australia are not affiliated with Keune Haircosmetics or the KEUNE brand in any way.
[3] Mr Fox also referred to Mansfield J’s decision in Britt Alcroft (Thomas) LLC v Miller (t/a) The Thomas Shop) [2000] FCA 699 (a matter involving allegations of misleading or deceptive conduct) at [52]-[57] holding that, while each case depended on its own facts, disclaimers of this kind were unlikely to be effective. His Honour’s view was subsequently affirmed by the Full Court (Beaumont, Heerey and Lehane JJ) on appeal in Miller v Britt Alcroft (Thomas) LLC [2000] FCA 1724 at [23].
The remaining four declarations making up the Opponent’s evidence in support are from the owners of hairdressing salons in New South Wales (two), Queensland and Western Australia. All say that the Opponent’s Goods “are used in the back bar, on clients and sold to clients for retail purposes to complement our professional services.” Larry Gerace has spent 35 years in the haircare industry and says he “encountered the KEUNE haircare brand approximately 22 years ago, when [he] attended the Sydney Hair Expo.” He has used and sold the Opponent’s Goods since then and says that, “In my experience, KEUNE haircare products are very popular, and have spread like wildfire around Australian salons over the last 20 years.” Both he and his staff have attended Keune Australia’s Keune Academy for training in how to use the products. He explains that:
Many of my clients are repeat clients and have been using the same products for a number of years. They are therefore familiar with the range of products and often ask for specific haircare products sold under the brand KEUNE, by name. For example, a client will ask specifically for the KEUNE Design Repair shampoo, conditioner or styling product.
While in its submissions the Applicant strongly disputes the Opponent’s contention that the following represents a genuine instance of actual confusion, Mr Gerace concludes by saying:
14. I became aware of a range of haircare products sold under the brand OTTO KEUNIS when a client came into my salon, and we had the following conversation:
She said:         “Did KEUNE changed their products, or changed   their name?” (sic)
I said:             “No, what makes you think that?”
She said:         “I got this product and it’s [not very good]”
I said:             “It can’t be KEUNE then, did you get it from us?”
She said:         “No, but the name was spelt differently”
15. I was confused about the conversation I had with the client, and later performed a search of the internet using the search engine, Google. It was during these searches that I became aware of haircare products being sold under the brand OTTO KEUNIS.
16. I have not used any haircare products sold under this brand in Australia. However, once I saw the brand online, and the haircare products sold under the brand OTTO KEUNIS, I thought it likely that consumers will think that products sold under the brand OTTO KEUNIS are the same as, or connected to, the haircare products sold under the brand KEUNE.
17. The word KEUNE is so unusual; the words KEUNE and OTTO KEUNIS look similar to me.
Edward Gittos owns a salon in Western Australia and has been working in the hairdressing industry for an impressive 55 years. He too is very familiar with the Opponent’s Goods, having used them for over 20 years and given that:
4. In addition to my hairdressing responsibilities, I have also been a hairdressing educator for many years. In particular, for the past 21 years, I have been an educator for the brand KEUNE at the KEUNE Academy, an education and training facility operated by Keune Australia. I am also currently working for TAFE as hairdressing educator part time when necessary.
5. As an educator with the KEUNE Academy, I regularly run training courses, whenever the full time educator is unable to do so. I have also attended many courses over the years, for example, I have attended the Blonde Voyage, Redify, Hepburne Effect and Minimalistic courses in 2016.
He describes how he and his staff assess his salon clients and then recommend the Opponent’s Goods as appropriate, concluding:
14. As my Salon stocks and regularly recommends all ranges under the KEUNE brand, my clients (particularly repeat clients) often request that I use a specific range of haircare products (or specific individual haircare products), by referring to the KEUNE brand in connection with the range name. In my experience, this is because many of my clients have been using the same products for a number of years and are familiar with the range of products.
…
15. In my opinion, the haircare products sold under the brand KEUNE are recognised and well regarded and have acquired a substantial reputation in the Australian haircare industry.
Leanne Devine owns a salon in Sydney and has over 20 years experience in the hairdressing profession. She knows the Opponent’s Goods well, having “attended many hair shows…with the KEUNE brand” and having “hosted the launch of the KEUNE Blend range in Australia,” which she says “was well attended, with bloggers, magazine reps, and celebrity stylists attending.” She has also attended several courses at the Keune Academy and has “on occasion offered my salon as the location for classes.” Originally from Ireland, Ms Devine first became familiar with the Opponent’s Goods in that country and continued to use them after coming to Australia in 2002. With some of her staff already enthusiastically familiar with the Opponent’s Goods, she has used them exclusively in her salon for more than six years and reports that they are very popular with the salon’s clientele. She concludes:
16. From my experience, the KEUNE haircare products are recognised by stylists and customers alike, and are high quality and reputable products.
Holly Galea has been in the hairdressing industry for 11 years and owns a salon in Mackay, Queensland which stocks the full range of the Opponent’s Goods. She too has attended a number of events and classes held by the Keune Academy, on occasion making her own salon available for these. She also says the products in question are very popular with her staff and clientele and considers they “have a great reputation as being a great quality and versatile product.”

The Applicant’s evidence in answer consists of a declaration by its “director and manager,” Zhu Chun Hua, of Guangdong in China. Mr Zhu says that:
3. [The Applicant] promotes several brands in respect of hair care and related products. I consider myself experienced in the field and aware of brands, trends and popular items. My company prides itself on its professionalism and ability to meet market demands with its products. I do not consider OTTO KEUNIS to be confusingly similar to the Opponent’s KEUNE brand.
4. My experience in the hair-care product industry started about 20 years ago. In 1997 my company started developing hair care products, and our professional salon products were accepted and well-known in the China domestic market. Since 2009 our professional salon products have been sold also outside of China. Around that time, we were focusing on development of Keratin Treatment products for smooth hair results, which is now a world-wide know [sic] treatment. Since around 2010 we have producted [sic] a range of hair products containing argan oil. We have actively promoted the current products and company, including the OTTO KEUNIS brand since 2012.
5. I consider therefore that [the Applicant has] a good reputation in the relevant industry and [has] been involved in the relevant industry for a long time.
6. [The Applicant] offers two core brands to the market:
OTTO KEUNIS - which focuses on organic and natural products, and provides a range of products for professional salons.
PRO-TECHS, which is a professional salons brand focused on the Keratin Treatment products.
7. [The Applicant] company also offers “private label” manufacturing services to other companies and brands.
8. Accordingly, I consider myself very experienced in the industry and that I have good knowledge of the industry in respect of brands, requirements, trends and customer wishes.
Referring to Mr Van der Velden’s declaration, he says:
10. I do not agree that OTTO KEUNIS is deceptively similar to the KEUNE marks even if they both in some way include the letters KEUN. [The Applicant’s] brand starts with the word OTTO. This is the most memorable feature, and the one consumers will likely first recall and associate with [the Applicant’s] products. In fact, it is the word OTTO that [the Applicant] uses and abbreviates the brand to when discussing it internally. It is also the word most of our distributors use in their communication with us or when discussing the brand and products. It was not until reading the Opponent’s evidence that I learned “Otto” may be taken as another term for “attar” that is a fragrant essential oil. I do not think the average person will see the Otto component as descriptive in respect of the relevant goods.
Mr Zhu says that he is unaware of any confusion between the parties’ trade marks, notwithstanding the Applicant “has extensively promoted Otto Keunis around the world for [sic] since 2012, including in countries that Keune is also in use or registered (per their Exhibit JV-01).” He questions whether the one possible instance of confusion described earlier from Gerace 1 is persuasive, suggesting that “the consumer may have purchased a product with a very similar name to KEUNE that perhaps infringed that brand but was not OTTO KEUNIS.”
He disagrees that the font used by the Applicant for its branding imitates that used by the Opponent, explaining:
12. …I think the font is reasonably standard and simple such that there are many companies that would likely use a “similar” font for their branding. [The Applicant] engaged a designer in August 2012 who proposed the font (Candara) and device components, which we liked and accepted.
As to when and why the Applicant chose the Opposed Mark Mr Zhu says:
18. [The Applicant] chose the name OTTO KEUNIS for these products in 2012. My company wanted a brand that suggested “beauty” or “beautiful”. I undertook searches of the word beautiful in other languages and found that in Finnish the word “Kaunis” means beautiful. I liked this word, but thought it might be difficult for consumers to pronounce so we modified this component to Keunis. The Otto component came from the fact I heard this as a boy’s name and really liked it. On searching the meaning, I found it has origins that mean wealth and prosperity. On seeing that meaning I thought Otto (rich/wealthy) Keunis (derived from Kaunis - beautiful) had a strong brand message to align with our products and as such we adopted OTTO KEUNIS. Attached and marked as Exhibit OK-02 are screen shots from websites demonstrating the meanings for OTTO and KAUNIS.
19. In the interest of transparency and honesty, I note that prior to commencing [sic] [the Applicant] I had participated in two separate trade fairs in Italy for the hair care/cosmetics industry. I believe the Opponent may have been in attendance at either or both of these fairs. When I later adopted OTTO KEUNIS for [the Applicant’s] brand, I did not recall the KEUNE company or products in that branding process whatever; I had not given them any special thought when at the fair or later. It was only when we received an initial opposition from the Opponent to our OTTO KEUNIS trademark in New Zealand that I remembered them at all. I maintain that our adoption was honest and also maintain there is no danger of confusion.
Mr Zhu says the Applicant “adopted OTTO KEUNIS early in 2012 and first commenced use and promotion of OTTO KEUNIS in respect of class 3 goods, particularly hair care products in the marketplace in October 2012.” He says that the Applicant has used, applied to register and registered the Opposed Mark “in many countries of the world in respect of hair care goods” including “countries in which I have learned that the Opponent’s ‘Keune’ marks are also registered.” He says that any obstacles to registration encountered in those countries were due to opposition by the Opponent and not because of citation objections raised during examination. That said, Mr Zhu only exhibits evidence of registrations in four jurisdictions, China (filed 19 October 2012), the United States (filed 22 December 2014 and indicating first use in 2014), Nigeria (filed 19 May 2015) and the European Union (filed 6 October 2015). The sole applications of which he exhibits evidence are from Canada (currently being opposed by the Opponent) and New Zealand (now “abandoned” following opposition by the Opponent) which were filed on 10 May 2015 and 5 October 2015 respectively.
Mr Zhu says that the Applicant has used the Opposed Mark continuously since 2012 and that, as at the date of his declaration in December 2016:
16. The OTTO KEUNIS mark is promoted, and the goods sold under the mark, in at least the following countries: Australia, China, Philippines, Vietnam, Thailand, Malaysia, Singapore, Saudi Arabia, Hong Kong, Yemen, Bahrain, Russia, Ukraine, Poland, UK, Belgium, France, Lithuania, Nigeria, Madagascar, Sudan, Fiji, Canada, USA, Nicaragua, Egypt and Panama.
…
21. [The Applicant] promotes OTTO KEUNIS and sells goods under the brand in the countries seen above, via local and [sic] distributors within the countries. The OTTO KEUNIS brand and products are also promoted extensively online via our own websites, distributor websites and online marketplaces like eBay, Amazon and Alibaba. This includes through our local Australian Distributor who operates as Otto Keunis Australia (“OKA”). Attached now and marked as Exhibit OK-03 are pages and screenshots from websites promoting OTTO KEUNIS in respect of the goods.[4]
22. In addition to [the] websites above, the OTTO KEUNIS trademark is promoted in respect of the goods via Social Media platforms such as Facebook, Pinterest and others.[5]
23. OTTO KEUNIS has been promoted in respect of [hair care products] through printed materials such as flyers, posters and catalogues by [the Applicant] and by our distributors throughout all of the countries. The OTTO KENUIS [sic] brand is also promoted by way of the product labels, and packaging bags and the like. Examples of these are attached now and marked as Confidential Exhibit OK-04.[6] [The Applicant] provides artwork and promotional material to each distributor for use in their own marketing efforts. [The Applicant’s] brand and the products have been promoted continuously in this way since 2012. Included under OK-04 are promotional materials specifically designed for and used by OKA in Australia. Each distributor conducts similar marketing exercises as can be seen in these examples.
[4] These are mainly from foreign, third party websites, several in languages other than English and most on the face of it not offering products for sale in Australian dollars.
[5] Mr Zhu does not exhibit any examples, or give any further details, of this claimed social media use.
[6] Although Exhibit OK-04 comprises some 25 pages, Mr Zhu says it is “confidential” because one of its pages is a “wholesale price list” (dated January 2016). He does not say when, where or in what quantities any of the material shown in the Exhibit may have been distributed.
I note that one of the (non-confidential) pages contained in Confidential Exhibit OK-04 is a copy of what appears to be a business card for a person named Stuart Gough, who is described on the card as the “National Director” of OKA. A copy of a one page declaration by Mr Gough in which Mr Gough says he became a distributor of the Applicant’s products in January 2016 forms part of Exhibit OK-07 to Zhu and is discussed further below.
Mr Zhu says that “recently” the Applicant also commenced promoting its hair care products at trade fairs and specifically mentions attendance at an event in Hong Kong in November 2016, with attendance planned for trade fairs in Italy and Dubai in 2017.
Mr Zhu provides confidential “turnover and promotional figures” for its OTTO KEUNIS branded goods for the years 2012 to (November) 2016. However, these figures are for world-wide activity and figures for Australia itself are not given other than for the year 2016, being after the Relevant Date. I mention that I would in any event characterize both the world-wide figures provided and those for Australia for 2016 as relatively modest. Mr Zhu does exhibit five pictures of an “in store promotion and product display” said to have been undertaken in Australia by OKA, although does not say when this took place. Such is also the case with any further (unspecified) promotional activities that may have been undertaken by OKA, which Mr Zhu says he is “informed” have been undertaken in Australia, but of which he “does not have records.”
In order “to further speak on the matter of [the Applicant’s] ownership of OTTO KEUNIS and the reputation we have in this brand,” Mr Zhu exhibits copies of seven declarations said to have been made by:
27. …third parties that act as distributors for our OTTO KEUNIS range of products in various countries, which confirm their knowledge of our brand and also discuss that there has not been confusion to their knowledge between OTTO KEUNIS and KEUNE in their jurisdictions. I acknowledge that some distributors were aware of the KEUNE brand at the time they became aware of our OTTO KEUNIS brand, however, they remain of the opinion confusion is unlikely and that they are not aware of confusion between the two brands.
Each of the seven declarations is essentially identical and only one relates to Australia, being that of Scott Gough. Mr Gough has been working in the hair salon industry for some 22 years and has managed a salon in Sydney since 2010. He says he “first became aware of [the Applicant] in January 2016 [being after the Relevant Date] as a distributor for their products” and that he has “consistently ordered and used and sold [them] since [then].” He says he is unaware of any confusion between the products of the Applicant and the Opponent and, like most of the other six declarants, he says:
7. At the time of first knowing of the OTTO KEUNIS brand, I was aware of the KEUNE products. I did not then, nor do I now, consider that confusion between the two range names is likely.
The remaining six declarations, of which Mr Fox was particularly critical in his submissions, are by distributors of the Applicant’s products in Denmark, Hong Kong, Vietnam, Thailand, India and Egypt. It is not necessary to describe these further or to detail Mr Fox’s specific criticisms here since, while I agree with his critique, none of the overseas declarations is in any event relevant to my decision.
Specifically addressing the s 60 ground of opposition, Mr Zhu goes on to say:
30. …I acknowledge the Opponent has demonstrated use of its KEUNE marks prior to the date of the Otto Keunis trademark application in Australia and prior to [the Applicant’s] first use in 2012. I also acknowledge the goods of each party are largely the same. However, I do not agree that Otto Keunis is similar to Keune, whether they have established a reputation or not. I am aware from the examiner’s manual the likelihood of deception or confusion must be considered and that:
The opponent must show that there is a real tangible danger of deception or confusion (Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020) among a “significant” or “substantial” number of consumers.
The Opponent has not shown a real tangible danger of deception or confusion among a significant or substantial consumers, as such cannot succeed under section 60.
Also pertaining to the likelihood of confusion, Mr Zhu adds:
32. …I also note that we both supply product primarily to salon operators and/or distributors in the hair care industry. Such professionals are all likely to be familiar with their supplier’s brands and various brands on the market and will pay special attention to brands of relevant products and are not likely to confuse two such different names.
Turning to the Opponent’s evidence in reply, the most significant declaration as far as my decision is concerned is that of Natasha Teoh, who is a Senior Associate with the Opponent’s Australian attorneys and who reports on a range of research she undertook prompted by Mr Zhu’s declaration. Referencing Mr Zhu’s statement that the Opposed Mark is “abbreviated and referred to internally by the Applicant and its distributors as the word ‘Otto’,” she annexes the results of a search she made of the Trade Marks Register for the exact word “Otto” in Class 3 and notes that the sole application or registration identified is the opposed application. She adds that in reviewing the Exhibits to Mr Zhu’s declaration she “was unable to locate instances of the Applicant’s goods being referred to by an abbreviated trade mark ‘Otto’.”
Ms Teoh says that both “Keune” and indeed the suite of letters “KEUN” shared by the parties’ marks are “unusual.” In this regard she notes that “Keune” (or “keune”) is not a word with a dictionary definition and that as indicated on the Opponent’s website the KEUNE trade mark “is derived from the name of the Dutch chemist, Jan Keune, who first started developing hair products in 1922.” She annexes the results of a search of the Trade Marks Register for applications or registrations (alive or not) in Classes 3 and 5 and associated Classes for marks containing the exact letter combination KEUN. Characterised by Mr Fox in his submissions as “very telling,” the search only identified a single application or registration other than those of the Opponent and the opposed application, being a registration in Class 29 for TONGKEUN CHICKEN & Korean Characters.
Ms Teoh also exhibits the results of:
17. …a search of the Internet using the Google^® search engine with the search terms “KEUN*”, “hair care” and “.au”. The majority of the results referred to the Opponent’s KEUNE branded hair care products. No results were revealed in respect of another hair care product containing the same combination “KEUN”.
Also exhibited are the results of “additional Internet searches on popular .au online sellers of hair and beauty products for products containing the letters KEUN” which produced no results.
Referring to Mr Zhu’s statement that the Applicant’s hair care products are promoted in Australia via OKA’s website at < Ms Teoh exhibits a domain name search result showing the URL’s “creation date” was 11 April 2016. In similar vein she exhibits extracts from OKA’s Facebook^® page, noting that the content also starts from 11 April 2016 and that, “An entry of 1 May 2016 mentions the ‘launch of a new and exciting premium professional salon haircare brand in Australia: Otto Keunis Australia’.” She also exhibits the results of a search from the online records of the Australian Securities & Investments Commission “which revealed a business name OTTO KEUNIS registered on 14 June 2016.”
Referring to the declaration by Scott Gough exhibited by Mr Zhu, Ms Teoh exhibits the results of “a search using the Google Maps search engine for [Mr Gough’s stated] address, which appears to be a residential address.” Also exhibited is “an extract of Mr. Scott Gough’s profile on LinkedIn in which he is listed as “National Brand Manager, Otto Keunis Australia, February 2016-present.”
Ms Teoh also exhibits photographs showing how the parties’ respective haircare products and the similar products of third parties were displayed in a number of hair salons in Sydney in late February 2017. Based on this research she exhibits “side-by-side images of products to which the KEUNE trade mark is affixed, and products to which the OTTO KEUNIS trade mark is affixed.” I observe from this comparison that the Applicant’s products are packaged and presented in similarly shaped and coloured containers as the corresponding products of the Opponent, albeit that there are certainly differences between them that would in principle assist in distinguishing the parties’ products from each other.
Based on the side by side photographs of the Applicant’s products and the similar products of third parties also exhibited by Ms Teoh, however, it is difficult to avoid suspecting that the Applicant has made a deliberate effort to imitate the trade dress or “get up” of some of those third party products. The comparative photographs in question are reproduced below:

OTTO KEUNIS brand Third Party brands

For the sake of completeness I note Ms Teoh attests to further matters which need not be detailed here. I do nevertheless mention that, referring to the confidential January 2016 price list for the Applicant’s products in Australia exhibited by Mr Zhu, Ms Teoh exhibits a local price list for the Opponent’s Goods and that the corresponding products of the parties are similarly priced. She also says that, “It is not uncommon practise [sic] in promoting products to take a part, or a word element of a trade mark, and use it as a standalone trade mark” and she gives the example, inter alia, of the well known trade marks CHRISTIAN DIOR and DIOR.
While I am unable to say whether or not purely coincidental, I also mention for the record that Ms Teoh exhibits extracts from the website of a German fashion designer named Otto Kern downloaded in March 2017. The website describes Mr Kern as “the creator of a fashion empire at the beginning of the 70s” and says, “Today, the name Otto Kern stands not only for fashion but also for high quality cosmetics and fine perfumes.” The exhibited extracts feature a range of OTTO KERN branded “fragrance products” for men and women, including items such as deodorants, shower gels, after shave, eau de toilette, body milk and “hair & body shampoos.”
Turning to the balance of the evidence in reply, Stuart Green is a principal with the Opponent’s attorneys. As an experienced trade marks lawyer and branding expert of some 13 years standing he says in Green 1 that it is common in his experience “for brands to evolve over time.” He says it is also common for brand owners to develop sub-brands, “that is, a secondary brand which is affiliated with the parent brand…used as a way for a parent brand to reach a new market, while still maintaining an association with the parent brand.” He provides some examples of these practices which I will not detail here. It is convenient here to mention that Mr Green’s second declaration does not contain any new information or material as such, but was prepared and filed simply to correct a minor omission from the Teoh declaration apparently caused when that declaration was uploaded to IP Australia.

Cheryl Schmitzer is a Finance Manager who has since January 2017 been attending a salon in Sydney which uses the Opponent’s products. Shown photographs of the Applicant’s products by the Opponent’s attorneys (which are exhibited with the declaration), she says:
6. When I saw those photographs my first impression was that people could be confused into thinking OTTO KEUNIS products are related to KEUNE. For example, I thought that people might think OTTO KEUNIS is an associated brand, or a product range.
7. I believe that if I saw OTTO KEUNIS products for sale in a retail store, I would think it was the retail range of the KEUNE brand.
The remaining three declarations making up the evidence in reply are by the owners of hair salons who contributed to the Opponent’s evidence in support. They were also shown pictures of the Applicant’s products (which are exhibited with the declarations) and they make essentially similar comments.
As mentioned, Leanne Devine is a Sydney based salon owner with over 20 years experience in the hairdressing industry. In Devine 2, declared in March 2017, she says that until shown the photographs she had “not seen (for sale or in marketing materials), nor heard in the industry, of the brand OTTO KEUNIS” and that, “None of my customers have mentioned OTTO KEUNIS hair care products to me.” She says:
7. When I saw the photographs, my impression was that consumers might be confused because the word KEUN is in both KEUNE and OTTO KEUNIS. I haven’t seen “KEUN” in any other product names other than the KEUNE hair care products. The word KEUN is unique.
8. I believe consumers might think that KEUNE has launched a new product line. Consumers might think that the “OTTO” in OTTO KEUNIS might indicate that it is a different range of KEUNE hair care product or a sister brand of KEUNE hair care products – part of the KEUNE family of products. For example, KEUNE already has product lines like SO PURE, CARE and DESIGN – people might think OTTO is a new range.
9. Consumers might also think that KEUNE owns OTTO KEUNIS, because of the word KEUN in the name.
Larry Gerace, also based in Sydney, has around 35 years in the industry. In Gerace 2 he says that:
7. When I first saw the photographs, I thought that the packaging was very similar to some of KEUNE’s product packaging. For example, the packaging of the coloured bottled oil products (on page 4 of the photos) is very similar to the packaging of the KEUNE SO PURE range of products.
8. In my opinion, at first glance, the packaging of the products on pages 1 to 3 of the photographs is very similar to KEUNE products.
9. In particular, the photo of the straightening products shows packaging which is the same as KEUNE’s former keratin straightening products. The silver sachet of [the] product is very unique.
Mr Gerace adds that:
11. When I first saw at [sic] the OTTO KEUNIS products, my eyes went straight to the letters KEUN. For a short time, I thought the OTTO KEUNIS products were part of a new KEUNE range. Upon further inspection, I realised that it was a different brand of product.
12. I think that at a first glance, consumers are likely to think the OTTO KEUNIS products are KEUNE products. On a closer inspection, I believe consumers would think the OTTO KEUNIS products are an extension of the brand - a sub-brand, or a new line of KEUNE products (such as the BLEND, CARE or SO PURE ranges).
13. Even as a professional, and someone who knows what to expect in the industry, I was confused to begin with, and had to do a double take to realise that the products are different.
Edward Gittos has some 55 years in the industry and owns a salon in Western Australia. In Gittos 2 he says that:
6. When I first saw the photographs, I instantly thought that the packaging was very similar to the packaging of some of KEUNE’s hair care products.
7. In particular, the last photograph of the straightening products in the foil look sachet with pink label is almost identical to the packaging of the former KEUNE chemical hair straightening product.
8. Upon seeing the OTTO KEUNIS product photographs, I was immediately drawn to the “KEUN” in the name. I am not aware of any other hair care products which use the letters KEUN in the name, and do not believe that the word “KEUNE” has any specific meaning within the hair care industry. The letters KEUN have, in my experience, always been in reference to the products sold by Keune Haircosmetics.
9. I think that consumers would be confused, and would draw an association between the OTTO KEUNIS hair care products and the KEUNE hair care brand. In particular, I think that consumers would believe that the OTTO KEUNIS products might be related to KEUNE hair care products because of the use of “KEUN” in the brand name.
10. Consumers might believe that OTTO KEUNIS is attached to, or is another line of KEUNE hair care products.
I move on now to consider the s 60 ground of opposition.

Discussion

Section 60

Section 60 of the Act is reproduced below:

Trade mark similar to trade mark that has acquired a reputation in Australia

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

(a) another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, 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.
Note: For priority date see section 12.

The ground based on s 60 is particularised in the SGP as follows:
Prior to and as at the [Relevant Date] and at least as early as 1995, the Opponent possessed a reputation in Australia in the trade mark KEUNE. Prior to the [Relevant Date] and at least as early as 1995, the Opponent has used the KEUNE trade mark on identical or at least similar and closely related goods and services to the [Designated Goods], including but not limited to “hair care preparations; shampoos; cleaning preparations; polishing preparations; abrasive preparations; essential oils; incense; cosmetics for animals; air fragrancing preparations; breath freshening sprays; cosmetics” in class 3.
As to assessing reputation, as Mr Fox noted, Kenny J’s words in McCormick & Co Inc v McCormick[7] are generally cited with approval:
In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product…
[7] (2002) 51 IPR 102 at [86].
Based on the Opponent’s evidence summarized earlier I am satisfied that at the Relevant Date the Opponent’s KEUNE trade mark had the kind of reputation for hair care products contemplated by s 60, notwithstanding the Applicant’s submissions do fairly question the extent to which the evidence demonstrates that reputation existed “at least as early as 1995.” As mentioned, the sales and market share figures provided by Mr Van der Velden for the years 1995 to 2016 are substantial, as are the amounts spent on advertising and promotion over the same period. The promotional activities undertaken by Keune Australia over that period appear to have been both considerable and effective and the Opponent’s hair care products, on the information before me, have clearly enjoyed wide exposure and popularity in this country for many years. I note too that Mr Zhu says he was aware of the Opponent’s Goods before the Applicant adopted the Opposed Mark in 2012, as were most of the seven distributors of the Applicant’s hair care products whose declarations are exhibited with Zhu.
The Applicant’s submissions do argue that, whereas the SGP refers to “the KEUNE trade mark” as being the mark in which the claimed reputation resides:
62. Largely, the evidence filed does not depict that trademark in use by the Opponent or [Keune Australia]. Or, where it does appear it is secondary or in content where it is not viable to include a logo. The mark seen throughout the evidence, and particularly on the relevant goods, is displayed as per the following (or different colours thereof):
The Applicant accordingly submits that “any reputation would be in connection with this distinct trademark, which offers even further distinction from the Opposed Mark.” I do not however think that this arguably technical objection is well founded in this case. Consumers of hair care products are not in the main also experts in the ins and outs of trade mark law. The relatively small device element in question is not a significant addition that would in my view affect the impression consumers are likely to retain. Both marks would on the face of it be recalled by reference to the element KEUNE and this would obviously be the manner in which both would be referred to in speech or be located by persons searching via Internet search engines and the like. I would only add that I am in any event satisfied that use of the unadorned mark KEUNE has been sufficient to enliven the Opponent’s s 60 ground of opposition.
Taking the reputation of the Opponent’s Mark into account, then, I must consider whether notional use of the Opposed Mark in a normal and fair manner for the Designated Goods would be likely to deceive or cause confusion amongst, as Mr Zhu observed in his declaration, a “significant” or “substantial” number of potential consumers as at the Relevant Date. As Heerey J put it in Le Cordon Bleu B.V. v Cordon Bleu International Ltee:[8]
…the reputation contended for by the [opponent] would have to be one of which a significant or substantial number of persons were aware: ConAgra at FCR 346.[9] What is “significant” or “substantial” will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient.
[8] (2000) 50 IPR 1 at [91]. His Honour’s observation was in the context of s 28(a) of the Trade Mark Act 1955 which, in the circumstances of that case, also required reputation to be established.
[9] ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193.
In the case of s 60, unlike with s 44, it is not necessary that the parties’ respective goods be “similar” in the sense specified by s 14(1) of the Act, although this is obviously a relevant factor in assessing the likelihood of deception or confusion arising.[10] In the present case the Opponent’s Goods essentially fall under the general description “hair care products.” For their part the Designated Goods embrace these very goods, although extend also to arguably quite different items such as “Polishing preparations; Abrasive preparations, Incense; Cosmetics for animals; Air fragrancing preparations; Breath freshening sprays.” I note Mr Fox’s written submissions do address this issue, particularly in relation to the s 44 ground of opposition, offering reasons why each of the Designated Goods should in principle be considered the same as, or of the same description as, the Opponent’s Goods, but that the Applicant’s submissions in response do not. Indeed, the Applicant’s submissions explicitly concede that, “The relevant goods predominately concern hair care products, cosmetics and the like” and “the [parties’] goods are similar and perhaps the type of customer may be the same.” As mentioned in paragraph 33 above, Mr Zhu himself says “I…acknowledge the goods of each party are largely the same.” I do not therefore think it necessary or helpful in this decision to dwell on the differences between hair care products per se and the other goods covered by the opposed application given Mr Zhu’s evidence that the Applicant’s particular goods of interest, those for which it has used and apparently intends in future to use the Opposed Mark, are in fact hair care products and given the Applicant does not submit I should do otherwise.
[10] See for example Qantas Airways Limited v Edwards [2016] FCA 729 at [143].
That said I proceed on the basis that the potential market for hair care products would in principle extend to the entire population, children below a certain age aside. Moreover I agree that, as the Applicant’s own submissions put it, “Such goods can range in value and are not of such a specialist nature that one would expect a consumer to take a long time to consider their purchase.” I do note that the Applicant goes on to argue hair care products are nevertheless “not fast moving consumer goods in [the] same nature of soft-drinks or confectionary, which may be purchased quickly and carelessly” and that accordingly, “Some level of discernment would be expected from a consumer of the relevant goods and this further lessens the chance of confusion.” I accept that this may be true of many consumers of hair care products, although in my consideration of the s 60 ground I have not found this factor determinative.
While on the one hand the Applicant accepts that hair care products generally are not of a specialist nature, it nevertheless submits the parties’ particular products, being marketed principally through hairdressing salons, are less likely to be confused for this reason. At paragraph 34 above I quoted Mr Zhu on this point. The Applicant’s submissions take this further, arguing that because the Opponent’s Goods appear only to be available in Australia through Keune Australia, “There is effectively one customer of the Opponent’s in Australia (the Distributor) who then sells exclusively to hairdressing salons via sales staff and appointed distributors and such.” Accordingly, the Applicant submits:
71. …The Distributor’s customer(s) will be familiar with the distribution process for the Keune branded products such that they are not likely to draw any connection to the Opponent should they come across the goods under the Opposed Mark. End users of the products branded by KEUNE will likely be purchasing in conjunction with salon professional advice such that they are not likely to be confused either, as there will be a high level of attention paid during the purchase process.
I cannot agree with this submission. It ignores, for example, potential future commercial customers of Keune Australia, those aware of the Opponent’s Goods and perhaps with a less than perfect recollection of the Opponent’s Mark, but not necessarily familiar at all with the particular distribution channel currently in place for the goods. For their part, “end users” of the parties’ hair care products may well know of the Opponent’s Goods through word of mouth via say the recommendation of friends or acquaintances, or through the Opponent’s advertising, but have insufficient familiarity with, or an imperfect recollection of, the precise branding those products bear. Such end users, even those ostensibly paying “a high level of attention,” may yet effectively be “confused” (in the sense contemplated by s 60) when they see for sale or are offered goods bearing the Opposed Mark. Moreover I mentioned earlier Mr Zhu’s evidence that the Applicant sells its products via, inter alia, “online marketplaces like eBay, Amazon and Alibaba.” On checking the manner of the Applicant’s use on these three named websites it is apparent that the Opponent’s Goods are also offered for sale on these sites, where they can be purchased directly by Australian consumers.
Particularly given the apparently minimal use of the Opposed Mark in Australia before the Relevant Date indicated by the evidence I must also reject the Applicant’s further submissions that the lack of evidence of actual confusion is significant or that:
72. …the goods under the Opposed Mark have some speciality qualities, which again will result in consumers paying particular attention to the brands appearing on the Goods. As set out at paragraph 20 of [Zhu], the Opposed Mark is used in connection with sulphate free products, whereas the Opponent does not appear to use the Keune Trade Mark/s in respect of such products.
The opposed application is not limited to goods which have any particular qualities or ingredients, but rather covers, inter alia, “hair care preparations” generally. As mentioned, it is the notional use the Applicant might make in future of the Opposed Mark for any goods falling within that description that I must consider. In the familiar words of Barwick CJ from Berlei Hestia Industries Limited v The Bali Company Inc.[11] quoted by Mr Fox in his submissions:
But the question whether a mark is likely to confuse is not limited to whether there has been actual confusion in the use of the mark. The question is whether its use is likely to confuse. In answering that question, the capacity of the respondent to apply its mark to merchandise of the same kind as that sold by the appellant must be borne in mind even though as yet it has not done so. The answer to the question cannot be confined to the circumstances of the trade presently obtaining.
[11] [1973] HCA 43; (1973) 129 CLR 353.
As to the significance of the words “likely to deceive or cause confusion” used in s 60, the Full Federal Court (Black CJ, Sundberg and Finkelstein JJ) said in The Coca-Cola Company v All-Fect Distributors Ltd:[12]
[39] …No intention to deceive or cause confusion is required: Re Bali Brassiere Co Inc's Registered Trade Mark (1968) 118 CLR 128 at 139. The distinction between “likely to deceive” and “likely to cause confusion” lies not in some element of culpability in the user to be inferred from the word “deceive”, but in the effect of the mark on prospective purchasers. In Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410 at 423 Richardson J, in the New Zealand Court of Appeal, said:
“Deceived” implies the creation of an incorrect belief or mental impression and causing “confusion” may go no further than perplexing or mixing up the minds of the purchasing public … Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant’s mark come from some other source and confused to being caused to wonder whether that might not be the case.
[12] (1999) 96 FCR 107; 47 IPR 481 at [39].
Moreover, it is well established that the kind of confusion contemplated by s 60 need not lead to actual purchase of the goods covered by the impugned trade mark. As Heerey J put it in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd:[13]
A probability of confusion, if it is real, is sufficient even though the confusion may be unlikely to persist up to the point of, and be a factor in, inducing actual sales: Southern Cross at CLR 495. There may be confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived: Re Hack's Application (1940) 58 RPC 91 at 103–4.
[13] (1997) 38 IPR 495 at 501. His Honour’s remarks were made in the context of s 28 of the Trade Marks Act 1955, but are no less applicable to s 60 of the current Act. The decision itself was overturned on appeal to the Full Federal Court (Wilcox, Tamberlin and Merkel JJ) (1998) 45 IPR 393, but not on this point.
Given the threshold for finding a likelihood of confusion is lower than that for a likelihood of deception I will focus on the former in the discussion which follows. In this regard I note the well accepted guiding principles concerning confusion highlighted by French J in Registrar of Trade Marks vWoolworths Ltd:[14]
A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt. It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.
[14] (1999) 45 IPR 411 at [50], based on Kitto J’s formulation in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592.

In brief, the Opponent submits confusion is likely in the present matter due to the reputation of the Opponent’s Mark and particularly given the mark’s inherent distinctiveness, the similarity of the Opposed Mark to it, the fact that ultimate consumers of the parties’ hair care products are in principle identical and the fact that the ultimate consumers in question would in principle include almost all of the Australian population. Additionally, the Opponent strongly questions the Applicant’s bona fides in adopting the Opposed Mark in the first place, referring in this regard to the observation of Dixon J (as he then was) and McTiernan J in their joint judgment in Australian Woollen Mills Ltd v FS Walton & Co Ltd that:[15]
The rule that if a mark or get-up for goods is adopted for the purpose of appropriating part of the trade or reputation of a rival, it should be presumed to be fitted for the purpose and therefore likely to deceive or confuse, no doubt, is as just in principle as it is wholesome in tendency. In a question how possible or prospective buyers will be impressed by a given picture, word or appearance, the instinct and judgment of traders is not to be lightly rejected, and when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive.
[15] (1937) 58 CLR 641 at 657.
As already discussed I agree that the parties’ goods are to all intents and purposes the same. I agree too that “Hair care preparations; Shampoos” as specified in the opposed application are in essence common, relatively inexpensive consumer goods used by most people. Whereas the Opponent’s Goods are currently distributed directly to salons via Keune Australia for on-selling to the salons’ clientele and the Applicant’s hair care products may also be sold to the public via salons, Mr Zhu’s evidence is that the Applicant’s products are also offered to the Australian public at large, being “promoted extensively online via our own websites, distributor websites and online marketplaces like eBay, Amazon and Alibaba.” The potential market for the Applicant’s products is accordingly not limited to consumers, “discerning” or otherwise, who habitually use the services of hair dressing salons.
As to the similarity of the parties’ marks, Mr Fox firstly highlighted the inherent distinctiveness of the KEUNE trade mark. Referring to Ms Teoh’s research, which I summarized earlier, he noted that “Keune” was a relatively rare surname in Australia[16] and that it had no other significance in English. While pointing out that, unlike s 44, it was not necessary under s 60 that the parties’ marks be “deceptively similar” (as defined in s 10 of the Act), he went on to reiterate his earlier submissions in relation to the s 44 ground, which are reproduced below (with footnotes omitted):
(a) KEUNE and KEUNIS are likely to be regarded by consumers as being surnames. KEUNE is in fact the surname of the founder of the Opponent’s business (see Exhibit NMT-4), and although KEUNIS is apparently an invented word, it will be taken by consumers to be a surname, given that it is prefixed by the male first name OTTO ([Zhu] at [18]). As surnames and as words generally, KEUNE and KEUNIS are unusual and are similar to one another.
(b) The primary similarity between KEUNE and KEUNIS is in the beginning of the words and the shared first syllable, which is particularly important to the look and sound of each of the words. That beginning – KEUN – is an unusual and distinctive common element shared by the Opponent’s Trade Marks and the Opposed Mark.
(c) The additional word OTTO in the Opposed Mark does not change the meaning of the Opposed Mark or the overall impression of the Opposed Mark, or to [sic] distinguish it from KEUNE, because OTTO is a first name that can be used with both the surname KEUNE and the surname KEUNIS. That is, the brand OTTO KEUNIS could be confused as being related to the brand KEUNE (i.e. OTTO KEUNE), in the same way that DIOR and CHRISTIAN DIOR are related (Marshall Teoh at [29]), or other brands such as ARMANI and EMPORIO ARMANI or GIORGIO ARMANI, and ZEGNA and ERMENEGILDO ZEGNA.
(d) Further, in addition to being a male first name, the word “otto” is a word for “rose oil”, which has beauty and cosmetic uses (Exhibit NMT-8). This further reduces any distinction between OTTO KEUNIS and KEUNE.
(e) KEUNE and KEUNIS look and sound similar. Phonetically, the Opponent’s KEUNE trade mark is pronounced and recalled as “KOONAY”. In the same way that “COULIS” is phonetically pronounced and recalled as “KOOLAY”, so too will the Applicant’s use of KEUNIS be recalled as “KOONAY”.
(f) The relevant goods are often recommended, or selected for a consumer and applied, by a hairdresser in a salon (see e.g. Gittos 1 at [9]-[11]; Gerace 1 at [6], [10]; Devine 1 at [6]-[8]; Galea 1 at [5], [8]). It may be presumed that this will often occur while the consumer may be lying back having their hair washed by the hairdresser, and they cannot see the packaging of the goods being used on them. The noisiness of the salon environment will also increase the likelihood of the trade mark not being heard precisely when spoken by the hairdresser to the consumer.
[16] The surname Keune occurs some 75 times on the Australian Electoral Roll.
The Applicant’s submissions in relation to s 60 do not address the issue of similarity other than to say, “It is submitted the Opposed Mark is not similar to the Keune Trademark relied on by the Opponent in the SGP.” However its submissions on the s 44 ground do challenge the Opponent’s above-quoted contentions regarding “deceptive similarity,” providing the following summary of the Applicant’s principal arguments (with footnotes omitted):
4. For its part, the Opponent alleges, inter alia, that OTTO KEUNIS is deceptively similar to KEUNE. However the number of weaknesses in their arguments is telling of their difficulties in meeting their onus in this proceeding, in particular;
(i) the fact they engage in an impermissible break down of OTTO KEUNIS into its parts rather than considering the two marks as wholes. This “break down” approach dominates their submissions;
(ii) the fact they try to paint the distinctive and first primary element of OTTO in OTTO KEUNIS as non-distinctive but in doing so ascribe two possible meanings to it without seeming to indicate which a consumer is more likely to adopt. One meaning is advanced at paragraph 37(d) of the Opponent’s submissions whilst the other is later pressed at paragraph 59. This indecisiveness indicates a consumer will in fact view OTTO KEUNIS as a unique mark and is unlikely to discount OTTO and focus primarily on KEUNIS in the manner described by the Opponent;
(iii) the fact they attempt to draw a phonetic similarity which is unsupported by both the ordinary pronunciation of the two trade marks being compared that would be expected of an English speaker and unsupported by the evidence.
Elsewhere in its s 44 submissions the Applicant elaborates on some of the above points, arguing for example that “the first syllable of a word is, as a general principle, far the most important for the purpose of distinction” and that:
27. …Here the first syllable of the Opposed Mark is “Ot” or “Ott” and the first syllable of the Keune Marks is “Keun” – there is no resemblance between them.
The leading element of OTTO in the Opposed Mark alters the sound and appearance of the Opposed Mark when compared against the Keune Trade Marks.
While submitting that the parties marks do not share a “common idea” in this case, the Applicant’s submissions also note that in any event the High Court has said that this “is not sufficient in itself to create a deceptive resemblance…although this fact could be taken into account in deciding whether two marks which really looked alike or sounded alike were likely to deceive.”[17]
[17] Cooper Engineering Company Pty Ltd v Sigmund Pumps Limited (1952) 86 CLR 536 concerning the trade marks RAIN MASTER and RAIN KING in connection with sprinklers and irrigation equipment.
The essential difficulty I have with these submissions from the Applicant is that I do not agree that in comparing the parties’ marks in this case the Opponent is “engag[ing] in an impermissible break down of OTTO KEUNIS into its parts rather than considering the two marks as wholes.” Generally speaking, of course, marks should be compared as wholes when evaluating whether they look or sound alike. However that is not the Opponent’s contention here. Rather, the Opponent’s submission is that “KEUNE and KEUNIS are likely to be regarded by consumers as being surnames” and that in this context it is then necessary to consider the similarity of these two elements in particular. As explained below, I think the Opponent is correct in this view.
As I understand its submissions the Applicant accepts the KEUNE mark is likely to be perceived as a surname, although its submissions are silent on whether consumers are also likely to perceive the element KEUNIS in the Opposed Mark as such. I have little doubt they would given that, as Mr Fox noted, “KEUNIS” would have no other significance to an English speaker and it is preceded by what I accept would be generally perceived as a male given name. I accept too Mr Fox’s submission that the practice of traders using the combination of a given name and a surname as a trade mark is quite common. Consumers, who one may assume would be aware of this common practice, are thus all the more likely to assume the Opposed Mark is a trade mark of this kind. I do not agree with the Applicant that this conclusion is somehow undermined because the Opponent’s evidence indicates “otto” is apparently also an alternative term for rose oil. Indeed, I think Mr Zhu is correct in his belief that like him, “the average person,” as he put it, would be unaware of this meaning and that the public at large would simply assume it to be a given name.
Moreover I think Mr Fox’s point that it is not unusual for marks which are based on a person’s full name to develop, or coexist with, derivations based upon the surname only, (or vice versa, as the case may be), is well taken. The Applicant objects in its submissions that of the three examples Mr Fox gave in his above-quoted submissions only the first of these, DIOR/CHRISTIAN DIOR, was mentioned in the Opponent’s evidence. However I do not think specific evidence is necessary for the Registrar to accept that this practice is not unusual, particularly in cases where the surname in question is relatively distinctive.
It is accordingly appropriate in my view that in this case, as Mr Fox submitted, I focus on the similarity of the KEUNE mark and the element KEUNIS in the Opposed Mark in particular. In this regard I also agree with Mr Fox that the relative distinctiveness of the KEUNE mark is a relevant factor in the comparison.
That said, the Applicant disputes the Opponent’s claim that the letter combination “KEUN” is unusual. I earlier mentioned Ms Teoh’s search of the Register for any applications or registrations in Classes 3 or 5 or associated Classes for marks that included these letters which, apart from the parties’ marks, only identified a single registration in Class 29 for TONGKEUN CHICKEN & Korean Characters. The Applicant’s submissions claim that search “omits the fact that there are other marks incorporating these letters on the ATMOSS database in Australia in other classes.” In fact, as Mr Fox pointed out at the hearing, widening Ms Teoh’s search to include all applications or registrations, alive or dead, in any Class, only identifies one more registration (and no more applications), being for the (obviously irrelevant) mark BLOKEUNDIES & Device in Class 25. In similar vein the Applicant submits that
There are many four letter words in the English language commencing with the consonant “K”, ending with the consonant “N” and including two vowels in the middle. It is far from an unusual grammatical formulation. This again suggests the letters are not as uncommon or unusual as the Opponent would like the Registrar to believe.
I disagree. As a brief perusal of any dictionary indicates, words simply commencing with the letter “K” are in fact relatively rare in English and the majority of even these words commence with the combination “KN” with the letter “K” being silent. Far from “common,” as far as I am aware the only four letter words commencing with the letter “K” to be found in an English dictionary “ending with the consonant ‘N’ and including two vowels in the middle” are “keen” and “kaon” (being the name of an elementary particle used by physicists).
I do agree with the Applicant that Mr Fox’s above-quoted reasoning suggesting that the element “KEUNIS” in the Opposed Mark would be pronounced as “KOONAY,” (that is identically to the way the Opponent’s KEUNE mark is apparently pronounced), is rather forced. Nevertheless, I do not accept the Applicant’s further submission that the combination “KEUN” would necessarily be pronounced by consumers as [koon] in the Opposed Mark but as [kyoon] in the Opponent’s mark. I think it much more likely that consumers would pronounce the letter combination in question in the same manner, (most likely as [koon]), in each case. Taking this into account, I think that the element KEUNIS is phonetically very close to the possessive form of the surname Keune, namely “Keune’s.” For the reasons already discussed I do not therefore think the addition of the male given name Otto to the element KEUNE assists significantly in distinguishing the parties’ marks when they are compared as wholes.
As mentioned, Mr Fox also questioned the Applicant’s bona fides in adopting the Opposed Mark in light of the long-standing reputation of the Opponent’s Mark. He pointed to Mr Zhu’s concession that he knew of the Opponent’s Goods before adopting the mark and had previously attended two trade fairs in Italy which he believed the Opponent had also attended. I note too that a schedule of the Opponent’s world-wide registrations for the Opponent’s Mark exhibited with Mr Van der Velden’s declaration shows the mark has been registered around the world for many years, including in the Applicant’s home jurisdiction of China since 1995. Whether or not the word “kaunis” was a Finnish word meaning “beautiful,” Mr Fox submitted Mr Zhu’s claim that he decided to change it to the (meaningless) word “keunis” because he “thought it might be difficult for consumers to pronounce” was inherently implausible on the face of it and at the very least required further explanation as to why this would be so. Mr Fox also highlighted the various similarities in the get-up used for the Applicant’s hair care products and that of other traders and particularly that used for the Opponent’s Goods, submitting that this appeared calculated to “leverage” or “piggy back” on the reputation of the KEUNE trade mark.
Based on the evidence before me it is not possible to determine with any certainty that in adopting the Opposed Mark the Applicant deliberately set out to benefit from its similarity to the relatively well known KEUNE mark. I am nevertheless at least satisfied that the various resonances between the parties’ marks and the get-up used for the parties’ products discussed above would effectively have this consequence.
To conclude, I find I am satisfied on balance that because of the reputation of the Opponent’s KEUNE trade mark as at the Relevant Date use of the Opposed Mark for hair care products was likely to at least cause confusion (in the sense discussed in paragraphs 66 to 68 above) amongst a significant number of Australian consumers, even if such confusion might not persist to the point of inducing purchases. This is particularly so given consumers may only know of the unusual KEUNE trade mark via word of mouth and what I see as the very real likelihood that the Opponent’s Mark might be imperfectly recollected. The parties’ goods are essentially the same, are relatively low priced and are aimed at the same market. The parties’ marks are of the same nature in that most people would I believe perceive them as names and I think they are likely to leave similar impressions on the minds of relevant consumers.
The Opponent has accordingly established its ground of opposition under s 60.

Decision

Section 55(1) of the Act provides that 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.
Note: For limitations see section 6.
I have found the Opponent has established the ground based on s 60 of the Act. I accordingly refuse to register trade mark application number 1726666.

Costs

In the event of success Mr Fox requested an award of costs in the Opponent’s favour. As the successful party, the Opponent is so entitled and I accordingly award costs against the Applicant as per Schedule 8 of the Regulations.

Michael Kirov
Hearing Officer
Trade Marks Hearings
22 November 2017