Kmart Australia Pty Ltd v A-Mart All Sports Pty Ltd

[2000] ATMO 95

TRADE MARKS ACT 1995

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

Re:Opposition by KMART AUSTRALIA LIMITED to registration of trade mark application 740591 (25,28 and 35) - a-mart all sports logo- filed in the name of A-MART ALL SPORTS PTY LTD.

Background

This application, by A-Mart All Sports Pty Ltd ("A-Mart") was filed with the Trade Marks Office ("TMO") on 1 August 1997 and is for registration of the trade mark shown below:

The application encompassed goods and services which, after amendment during examination, are now specified as follows:

Class: 25  Sportswear and sporting footwear

Class: 28  Games and playthings; gymnastic apparatus and sporting articles

Class: 35  Bringing together, for the benefit of prospective customers, of a variety of goods to enable customers to conveniently view and purchase those goods, the goods being games, playthings, gymnastic apparatus, sporting articles, clothing, headgear, footwear and/or bicycles, including the service of operating sporting goods stores; retailing of games, playthings, gymnastic apparatus, sporting articles, clothing, headgear, footwear and bicycles

After examination,  the application was advertised in the Official Journal of Trade Marks of 20 May 1999 as having been accepted under the provisions of sub-sections 44(3)(a) and 44(4). This published information indicated that the applicant had overcome a ground for rejection under s44 of the Trade Marks Act 1995 ("the Act") in order to obtain acceptance.  As is the practice of the Registrar in such cases, a letter was sent to the owner of the trade marks which had been cited as barriers to registration during examination, informing it of the acceptance.  The cited owner was KMart Australia Limited ("KMart").

On 16 July 1999, within the time allowed by the regulations, KMart filed a notice of opposition to registration of the application.  It served no evidence in support of its opposition.  Neither did the applicant serve evidence in answer during the time allowed for that purpose.  TMO then offered the parties an opportunity to be heard.  KMart, through its attorneys, Phillips Ormonde and Fitzpatrick of Melbourne, responded within the time allowed for this.  Its letter, dated 23 March 2000, advised that it would not seek a hearing but requested that the submissions prepared by the attorney, Mr John Gibbs, be taken into account in determining the opposition.

On 29 March 2000, the application was referred to me, as delegate of the Registrar, for determination.

Some further correspondence with the parties ensued, however.  There was a protracted argument with the attorney for the applicant about whether or not the Registrar should have regard to material on the file which had not been served on the opponent, but which had been taken into account during examination.  By letter dated 1 June I advised the parties that I intended to dismiss the opposition without regard to that evidence, but would again allow time for either of them to request a hearing in the matter.  No hearing has been requested. 

Grounds of Opposition

The grounds of opposition are set out in the Notice of Opposition. While not nominating any particular provision of the Act, they are phrased in terms of sections 41, 42, 43, 44, 55, 58, 59 and 60. However, there is nothing to support the grounds under ss58, 59 or 60. Nor do I see that there has been any error or omission in examination which would require me to find a reason for refusing the application in terms of the inherent attributes of the trade mark under the provisions of ss 41, 42 or 43. I therefore find these grounds to be unsubstantiated and dismiss them. This leaves the ss 44 and 55 grounds, and my discussion is therefore confined to these grounds only.

In its s44 ground of opposition, the opponent relies upon a list of 19 of its registered trade marks, covering both goods and services.

Submissions

The opponent's submissions firstly direct my attention to the large number of registrations owned by KMart and which contain the words K mart.  They nominate 324877, 324880 326495 and 326502 (all comprising the words K mart) and 387983 and 388181 (comprising the words Super K mart) as particularly relevant.  In addition, they indicate the relevance of registration 363591, All Sports logo, also owned by  KMart, to the present opposition.

The opposed trade mark is then stated to be deceptively similar to these registrations, because of their phonetic and visual similarities.

The writer then refers to two of the applicant's prior registrations, 582147 and 582148, which comprise the logo shown below.

The submissions draw attention to the endorsement that these registrations bear.  It reads:

Registration of this trade mark is limited to the State of Queensland and that part of the State of  New South Wales being north of a notional line extending east and west from the southernmost point of the boundary of the City of Armidale.

The writer then contends that as there is no admissible evidence of use either in a greater geographical area or on a greater range of goods and services, and as there is "certainty of confusion" arising if the trade mark proceeds to registration, the application should be refused unless A-Mart agrees to the same condition of registration as applies to its registrations 582147 and 582148.

KMart also seeks costs.

The Law

Section 44 deals with how very similar trade marks are to be treated. It provides as follows:

44.(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.

(2) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of services (applicant's services) must be rejected if:

(a) it is substantially identical with, or deceptively similar to:

(i) a trade mark registered by another person in respect of similar services or closely related goods; or
(ii) a trade mark whose registration in respect of similar services or closely related goods 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 services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

(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.

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

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

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

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

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

The term "deceptively similar" is defined by the Act, as follows:

Definition of deceptively similar

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

Section 44 and the concepts it expresses have a very long history in the law. Most recently, and of particular relevance to the proceedings here, there is the judgement of French J in Registrar of Trade Marks v Woolworths Limited[1] . This case concerned the application of s 44 by the Registrar to block a trade mark application for services, where trade marks registered in respect of goods had been cited against it. In his reasons, His Honour gave particular attention to the changes wrought by the 1995 Act, and the impact of those changes upon the processes whereby an application is considered for acceptance. Notably, he discussed the shift in onus introduced by s 33. This section reads as follows:

[1] [1999] FCA 1020. The majority judgement dismissed an appeal from a decision of a single judge of the same court, Wilcox J.

33.(1) The Registrar must, after the examination, accept the application unless he or she is satisfied that:

(a) the application has not been made in accordance with this Act; or
(b) there are grounds for rejecting it.

(2) The Registrar may accept the application subject to conditions or limitations.

(3) If the Registrar is satisfied that:

(a) the application has not been made in accordance with this Act; or
(b) there are grounds for rejecting it;

the Registrar must reject the application.

(4) The Registrar may not reject an application without giving the applicant an opportunity of being heard.

Commenting on this, His Honour said, at paragraph 24:

The mandatory language of s 33 gives effect to the intention...that there is to be a presumption of registrability when the application in examined by the Registrar of Trade Marks.

Further, at paragraph 34, His Honour deals with the difference between the acceptance and opposition stages of trade mark registration under the 1995 Act, stating:

The mandatory language of s 33 and the legislative policy which informs it also suggest that the acceptance stage is not the time for the kind of detailed adversarial examination of the application that might emerge from a contested opposition.

To summarise the law as it affects the present case, the position under the Act is that a presumption of registrability applies under s 44 unless the Registrar is satisfied that there is a ground in terms of s 44 for rejecting an application, and that the opposition process is the time for an opponent to demonstrate that a ground exists under s 44 if the Registrar has decided to accept an application.

In considering whether the trade marks in question were deceptively similar, His Honour reformulated, at para 50 of his reasons,  the classic tests derived from Australian Woollen Mills Ltd v F.S. Walton & Co Ltd[2] and  Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd[3] as follows:

[2] (1937) 58 C.L.R. 641 AT 658

[3] (1954) 91 CLR 592 at 594-5

(i)     To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring.  A mere possibility is not sufficient.

(ii)     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.

(iii)    In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration.  These include the circumstances in which the marks will be used, the circumstances in which the goods and services will be bought and sold and the character of the probable acquirers of the goods and services.

(iv)    The rights of the parties are to be determined as at the date of the application.

(v)      The question of deceptive similarity must be considered in respect of all goods and services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark.  The question is not limited to whether a particular use will give rise to deception or confusion.  It must be based upon what the applicant can do if registration is obtained.

Discussion

This is not the first time that these two parties have been at odds over much the same matter.  In K Mart Corporation v A-Mart Allsports Pty Ltd[4],  Assistant Registrar Farquhar decided that A-Mart's applications 434232 and 434233 (trade mark shown below) were deceptively

[4] 23 IPR 149

similar to KMart's registrations 324880 and 326502 for the plain words K-mart, and to registration 387983 for the plain words Super K-mart.   Likewise, she decided that A-Mart's applications 448192 and 448193 (trade mark shown below) were deceptively similar to KMart's plain word K mart registrations 324880, 387983 and 326502. 

In coming to this conclusion, the Hearing Officer had regard to the nature of the word Mart as poetic, fanciful, and not apt for conversational use, and to its combination with the letter K as idiosyncratic.  She also took into account the nature of the retail services in connection with which the respective trade marks were used and noted that they were used on the stores, on signage and price tags within the stores and seldom on the goods themselves.  She noted that a driver or pedestrian looking for a shop has only one eye on the signage - the other is on the traffic or the press of people.  She concluded that

...there is a good likelihood, although not a very high one, that the ordinary person of average intelligence would be led by the similarity of the trade marks to wonder as to whether the services had the same origin, or whether the applicant had some kind of licensee or franchise arrangement with the opponent. (Emphasis added).

Further, she found the trade marks phonetically similar, and thus likely to be confused in aural use on radio and television.  The date of filing of these applications, and thus the relevant date for the purpose of the Assistant Registrar's decision, was 17 April 1985.

There was an appeal, which led to a settlement by consent.  The Assistant Registrar's decision to restrict the use of 434232 and 434233 to Queensland was varied, with the result that these trade marks were registered subject to the endorsement noted previously.[5]

[5] Registration of this trade mark is limited to the State of Queensland and that part of the State of  New South Wales being north of a notional line extending east and west from the southernmost point of the boundary of the City of Armidale.

The question to be determined here is effectively the same question, but under the provisions of the Trade Marks Act 1995, applied in the light of Woolworths, supra, and as at the date of filing, which is 1 August 1997.

Is this present trade mark, reproduced for convenience below, deceptively similar to any of the registered trade marks on which KMart is relying?

Registrations 324877, 324880, 326495 and 326502 are for K mart and 387983 and 388181 for Super K mart.  I accept that the goods and services of these trade marks overlap or are the same as those encompassed by the present application.  The question comes down to whether there is a likelihood that the ordinary person driving or walking in a retail area will mistake an A-Mart store for a KMart store, or will wonder if there is a licensing arrangement between the two parties, or will be likely to mishear A-Mart as KMart when the trade mark is in oral use. 

The date at which this is to be determined is the date of filing: 1 August 1997.

I take it to be common knowledge that many businesses these days identify themselves by a letter or letters of the alphabet and customers are used to distinguishing between them.  The upper-case letter A and the upper-case letter K do not, to my mind, constitute letters which are easily confused visually.

In terms of "the idea of the mark", the letter A in ordinary usage often connotes primacy and first-class performance.  It thus creates a quite different mental picture from the letter K, which has no such affective dimension.  Additionally, A is a vowel and K a consonant.  Their orthographical and functional grouping is therefore quite distinct.  People do not normally confuse vowels and consonants, because they have an almost instinctive understanding of this difference. 

The term mart has, over the years, become increasingly common.  True, it remains something of a fancy word - one that is not used conversationally.  But it is commonplace nowadays to find businesses and traders styling themselves as marts of one kind or another.  Customers observe the shared element mart in these names, but automatically look for some distinguishing feature which differentiates one from another.

For these reasons, I do not think that it is likely that a customer who is familiar with the retail services provided under the K mart and Super K mart trade marks would mistake an A-Mart store for a KMart store even when in an unfamiliar area, or in haste, or when coping with traffic.  I also think it would be inappropriate to ignore the particular get-up of the words in the opposed trade mark.   In the absence of any evidence of such confusion occurring, I am disinclined to believe that the ordinary customer would be so easily led astray.  Neither do I think that people of ordinary intelligence and normal experience of life today would wonder whether there was a licensing arrangement between the two parties.  

With regard to aural impression, however, I am in rather more doubt as to whether the trade marks should be considered deceptively similar.  A and K are indeed verbalised similarly - the only difference between them is the initial back voiceless stop consonant, rendered as [k] in the international phonetic script.  Nevertheless, I am inclined to think that the fundamental difference which all speakers make - and have made since the beginnings of speech acquisition - between vowel and consonant sounds, means that this difference is easily perceived, and not likely to be misheard.  On balance, I am not satisfied that they are deceptively similar, and have nothing before me to persuade me otherwise.  While the opponent has asserted that deception or confusion will occur, it has not discharged the onus on it to demonstrate how and why it believes this to be the case.

In summary, then, so far as these trade marks are concerned, I do not consider that one can come to the same conclusion today as did Ms Farquhar, because of the changes in the Act taken together with changes in language, to which must also be added the increasing sophistication of the ordinary customer and the lack of any evidence in support of the opposition. I find that these trade marks are not deceptively similar. There is not, in my opinion and on the material before me, a real tangible danger of confusion or deception[6].

[6] Supra, at 594-5, per Kitto J.

KMart also relies on its registration 363591, AllSports logo. 

I reproduce this trade mark here:

I take it as obvious that this logo is not substantially identical to A-Mart's trade mark.  The presence of the words A-Mart in the opposed trade mark, and the overall get-up of its logo, constitute significant differences.  With regard to deceptive similarity, there is a possibility of confusion based on the commonality of the words All Sports in both trade marks.  However, the shared words are so directly descriptive of the nature of the goods sold under the two trade marks that I am inclined to doubt that deception or confusion is likely to arise from the use of "All Sports", in conjunction with "A Mart", in the opposed logo.

I also note that A-Mart's prior registrations 582147 and 582148 contain these words, and co-exist on the register with the opponent's registered mark.  Although these registrations are subject to a geographical limitation, it would be likely by now that if there were a real tangible likelihood of deception or confusion, it would already have occurred in the area where both trade marks are in use. 

Again, I am not satisfied that the trade marks are deceptively similar. The opposition also fails on this ground.

The upshot of these conclusions is that there is no requirement for the trade marks to be registered subject to the provisions of subsections 44(3)(a) and 44(4), nor to be subject to a territorial limitation in terms of s 55.

Decision

None of the grounds of opposition has been made out.  I therefore direct that application 740591 proceed to registration without endorsement and without territorial limitation after 30 days 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

The opponent sought costs, but the opposition has failed.  I see no reason why costs should not follow the result.  I therefore order that the opponent pay the applicant's costs in the matter, according to the Official scale.

Arminel Ryan
Senior Examiner

30 August 2000