Knowles Airconditioning & Plumbing Pty Ltd

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Trade mark application number 1420127(35, 37) - RITE PRICE- in the name of Knowles Airconditioning & Plumbing Pty Ltd.

Delegate:

Iain Thompson

Representation:

Applicant: Josh Simons, solicitor, and Sharon Bandick, trade mark attorney, of Minter Ellison

Decision:

2013 ATMO 42

s33 proceedings: expression ‘Rite Price’ not capable of distinguishing the Applicant’s services. No evidence that the expression has been used on its own by the Applicant as a trade mark.

Application rejected.

Background

In this matter Knowles Airconditioning & Plumbing Pty Ltd (‘the Applicant’) has applied under the Trade Marks Act 1995 (‘the Act’) to register the trade mark which appears below:
Application No: 1420127
Priority Date: 13 April 2011
Services:Class 35: Retail sales of heating and cooling systems; business management; marketing and advertising; arranging/facilitating trade services for others including plumbing and electrical
Class 37: Installation, maintenance and repair of heating and cooling apparatus and systems
Trade Mark: Rite Price (‘the trade mark’)
An examiner of trade marks has cited a ground for rejection of the trade mark under section 41 of the Act in the following terms:
The term RITE PRICE has an obvious and immediate meaning in relation to the services claimed in your application. It is also a term that is in common use.
Your trade mark indicates that the services you provide are offered at the RIGHT PRICE. I note that you have spelled the word “right” as “rite”; however, this is a very common alternative spelling and does not add an element of distinctiveness to your mark.
As your trade mark is laudatory in relation to the services claimed, it is not prima facie capable of distinguishing your services from those of another trader.
Other traders should be able to use RITE PRICE, or RIGHT PRICE, in connection with goods or services similar to yours.
The Applicant submitted evidence of the use of the trade mark and submissions couched in terms of having the ground favourably reconsidered; however, the examiner maintained the ground over a further two reports and the Applicant requested to be heard.
I note that the ground for rejection, above, is couched in terms of subsection 41(6) of the Act but subsequent examiner’s reports dealt with the ground for rejection in terms of subsection 41(5): that is, initially, the ground as stated conceded no inherent adaptation to distinguish whatsoever within the trade mark as a result of the misspelling of the word ‘right’ but subsequent correspondence (whilst conceding no inherent adaptation in the misspelling) stated the ground as being under subsection 41(5). The Applicant appears to have argued the ground (both to the examiner and myself) under the impression that the ground was correctly stated to be under subsection 41(6).
The dealings with the examiner having reached an impasse, the Applicant requested to be heard. As a delegate of the Registrar of Trade Marks I heard the Applicant’s legal representatives Josh Simons, solicitor, and Sharon Bandick, trade mark attorney, of Minter Ellison at a hearing in Melbourne on 28 May 2013.
Evidence
The evidence in this matter is comprised of a statutory declaration by Andrew Mark Knowles who is the director of the Applicant.
Mr Knowles states that the trade mark “depicted in application 1420127 was first used in Australia in May 1999 by [the Applicant]”.
Mr Knowles goes on to state that the Applicant has used the trade mark in relation to the services in respect of which registration is sought since 1999. This is a mis-statement as there is no evidence whatsoever that the Applicant has used any trade mark in relation to ‘business management; marketing and advertising’ services performed on behalf of others.
The material appended to the declaration shows that the words ‘Rite Price’ which form the trade mark are not used on their own by the Applicant. The words ‘Rite Price’ are used by the Applicant with other words or graphical elements such as those which appear below where the Applicant uses in various different iterations in which one or more of the graphical elements used with the words ‘Rite Price’ may be missing:
Other uses of the words ‘Rite Price’ by the Applicant suggest that it is being used as a part of a business name rather than as a trade mark, as in the examples which appear on the Applicant’s Internet website[1]:
[1] Price Heating & Cooling is a South Australian family business icon. With stores across Adelaide, and a solid history of great service and customer satisfaction, Rite Price guarantee [sic] service, quality and installation by qualified experts. Providing the very best air conditioning prices available, but without cutting corners, Rite Price Heating & Cooling will provide you with a FREE quotation that will surpass your expectations. Call Rite Price Heating & Cooling Today.
[and]
Welcome to Rite Price Heating & Cooling.
Rite Price Heating and Cooling has been established for over 20 years.
Owners Andrew and Alison Knowles are proudly South Australian, so you can rest assured you are buying from a local family business. Also, Rite Price buy in bulk and that means you’re always guaranteed the right price, on all the right brands including ….
When I drew the lack of evidence of use of the trade mark Rite Price on its own to the notice of the Applicant’s representatives at the hearing, they drew my attention to a radio jingle submitted in evidence by the Applicant in which the words ‘Rite Price’ repeatedly occur:
Rite Price Heating and Cooling are sure to have the price that’s right for you;
Rite Price Heating and Cooling for a free quote we’ll come to you;
We want to cool you down; freshen your home;
We’ll quickly install any side of town;
Rite Price;
Rite Price Heating and Cooling;
You can get the price right at Rite Price.
Details of expenditure on advertising and revenues are also supplied by Mr Knowles.
I consider it fair to observe that the claimed use of the trade mark is restricted to the Adelaide area.
Other
At the hearing Mr Simons submitted that the lack of a transitional provision for the new section 41 of the Act in the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 means that the amended form of section 41 should apply to the trade mark.
I consider however that it is unusual for any law to operate, in effect, retrospectively. The relevant date for the application of the Act to a trade mark application is that which applied at the filing date of the application since that is the date from which any rights might arise and is the relevant date for any opposition: see Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 595. The notion that a trade mark could not be opposed under the same ground as that under which it was accepted is obviously wrong.
Section 41
Section 41 provided (at the filing date of the application):
41Trade mark not distinguishing applicant’s goods or services
(1)For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.
Note 1:For applicant and predecessor in title see section 6.
Note 2:If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).
(2)An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.
Note:For goods of a person and services of a person see section 6.
(3)In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.
(4)Then, if the Registrar is still unable to decide the question, the following provisions apply.
(5)If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:
(a)the Registrar is to consider whether, because of the combined effect of the following:
(i)the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii)the use, or intended use, of the trade mark by the applicant;
(iii)any other circumstances;
the trade mark does or will distinguish the designated goods or services as being those of the applicant; and
(b)if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and
(c)if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.
Note 1:For goods of a person and services of a person see section 6.
Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).
(6)If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:
(a)if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
(b)in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.
Note 1:Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:
(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or
(b) the time of production of goods or of the rendering of services.
Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).
The scheme and operation of section 41 were discussed by Branson J in Blount Inc v Registrar of Trade Marks [1998] FCA 440; (1998) 40 IPR 498 where she said:
Subsections (3) to (6) of s 41 of the Act are designed to control the process by which the Registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (“the designated goods or services”). If the trade mark is not so capable, the application for its registration must be rejected (s 41(2)). Subsection (3) requires the Registrar first to “take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons”. Having taken such matter into account, it is theoretically open to the Registrar to conclude:
(a) that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or
(b) that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or
(c) that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the designated goods or services.
The structure of s 41 of the Act dictates that if the Registrar reaches conclusion (a) above, then he or she will decide the question whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons by reaching the answer that it is so capable by reason of its inherent adaptability to distinguish (s 41(2) and (3)). The Registrar will, in such circumstances, be required, by reason of the terms of s 33(1) of the Act, to accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application.
If the Registrar reaches conclusion (b) or (c) above, he or she is, within the meaning of s 41(4) “unable to decide the question”. That is, he or she is unable, simply by taking into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services, to answer the question whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons.
If the Registrar reaches conclusion (b) above, then the provisions of paragraphs (a) and (b) of s 41(6) are brought into operation. If the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the Registrar will not reject the application pursuant to s 41(2). The Registrar will, in such circumstances, accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application (s 33(1)). If the applicant fails to establish that because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the Registrar must reject the application pursuant to s 41(2).
If the Registrar reaches conclusion (c) above, then the provisions of paragraphs (a), (b) and (c) of s 41(5) are brought into operation. If the Registrar, having considered the combined effect of the matters listed in subparagraphs (i), (ii) and (iii) of s 41(5)(a), is satisfied that the trade mark does or will distinguish the designated goods or services as being those of the applicant, he or she will not reject the application pursuant to s 41(2). The Registrar will, in such circumstances, accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application (s 33(1)). If the Registrar, having considered the combined effect of the matter listed in subparagraphs (i), (ii) and (iii) of s 41(5), is not satisfied that the trade mark does or will distinguish the designated goods as being those of the applicant, the Registrar must reject the application (s 41(2)).
The first step in terms of the above is to take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons (subsection 41(3)).
The classic test of ‘inherent adaptation’ lies in the words of Kitto J in Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 (‘Michigan’) at page 514:
[B]ut to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
Mr Simons stressed the last phrase of the above passage and submitted that:
While the Applicant concedes the expression 'RIGHT PRICE' may be one of which the public would want to make honest use, use of the Mark as a trade mark would not be honestly required. Applying the test described in Clark, the Applicant submits that third party use other than as a trade mark is not a relevant consideration when considering a mark's inherent adaptability to distinguish.
[…]
The Applicant submits that the examiner erred in her assessment that '[o]ther traders should be able to use RITE PRICE, or RIGHT PRICE, in connection with goods or services similar to those claimed'. In the Applicant's submission, that is not the correct question to be answered. Rather, the question should have been posed: are there circumstances in which third parties may legitimately wish to use Mark, and would be prevented from doing so if the Mark is registered?
In the Applicant's submission, other traders do not have any legitimate need to use the Mark in connection with similar goods in any manner which would infringe the Mark (if registered). The Mark is not descriptive of the goods in respect of which it is sought to be registered (notwithstanding that it may be descriptive of the price to be paid for such goods).
With respect, I consider that this submission stands accepted trade mark law on its head. Firstly, it looks forward to the effects of registration. However, as Kitto J said in Michigan:
The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others.
Secondly, in my consideration, this submission looks forward to the possibility of another trader using the defence offered by section 122 of the Act against an action for infringement.
Thirdly, if the submission had merit, the trade mark MICHIGAN referred to above should have been found to be immediately registrable by the Court and it was not.
Fourthly, further examples of trade marks which should be immediately registrable if the submission had merit are the trade marks PERSIAN FETTA[2], CAPS THE GAME[3] and SCHOOLIES[4] and yet these had been found by the Court to lack any inherent adaptation to distinguish and have been expunged from the Register. Mr Simons observed at the hearing that these trade marks were ‘descriptive’ and that the Applicant’s trade mark was not – however, the examples I gave were not expunged on the basis of their descriptiveness, the word ‘descriptive’ does not occur within section 41 of the Act. As an additional example, the trade mark ‘GO ON …’ the subject of the decision in Unilever Australia Ltd v Societé des Produits Nestlé SA [2006] FCA 782; [2006] 154 FCR 165; (2006) 69 IPR 255 is not in any way descriptive of ‘ice cream products’ and was also expunged by the Court. What is to be considered is not the descriptiveness of the trade mark Rite Price but its inherent adaptation to distinguish the services of the Applicant from those of other traders.
[2] Yarra Valley Dairy Pty Ltd v Lemnos Foods Pty Ltd [2010] FCA 1367; (2010) 191 FCR 297; (2010) 90 IPR 117
[3] Larry John Powell v Glow Zone Products Pty Ltd [1996] FCA 1021; (1996) 36 IPR 343
[4] Sports Break Travel Pty Ltd v P & O Holidays Ltd [2000] FCA 924; (2000) 50 IPR 51

The expression ‘rite price’ is phonetically indistinguishable from the expression ‘right price’. The expression ‘rite price’ thus falls within the class of trade marks referred in in Registrar of Trade Marks v. W. & G. Du Cros Ltd. (1913) AC 624, at pp 634 to 635 by Lord Parker of Waddington:
The applicant's chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use. [Stress added]
I thus consider that on its ordinary English meaning the expression ‘rite price’ indicates:
1.that the services offered by the Applicant are affordable; and further that,
2.many traders tout their goods and services as being available at the ‘right price’.
As a consequence, the trade mark Rite Price lacks any inherent adaptation to distinguish the Applicant’s services and subsection 41(6) of the Act applies.
In terms of subsection 41(6) the Applicant must establish that its trade mark does distinguish the designated goods or services as being those of the applicant because of the extent to which the applicant has used the trade mark before the filing date in respect of the application and, if it does so, I am to take the trade mark to be capable of distinguishing the designated services from the services of other persons.
As I observed at the hearing, the problem for the Applicant is that the trade mark Rite Price is not used on its own separate to the graphical elements which variously accompany it. Thus the evidence of use goes to the use of the trade mark with the graphical elements rather than lending support for a view that the words as filed for registration on their own have gained distinctiveness through use and might be taken to be capable of distinguishing the Applicant’s services.
Mr Simons suggested that the use of the trade mark with the graphical elements was a use of two or more trade marks of the Applicant together: Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd [2004] FCA 438; (2004) 61 IPR 242; [2004] AIPC 91-983; [2005] ALMD 363 (‘Wellness’). However, as was observed in Wellness, whether two trade marks are being used together is a matter for the decision maker to decide with resort to common sense: Pepsico Australia Pty Ltd v Kettle Chip Company Pty Ltd (1996) 33 IPR 161 at 163.
Bennett J observed at [31] in Wellness:
In the present case, in addition to the matters raised by counsel and referred to above, there is use of PRO-BIO with LIVING WATERS (as in the logo), without LIVING WATERS (as on the container labels) and with other phrases (as in the third logo). These different uses indicate a separate purpose for the words PRO-BIO.
In my view, as used and as it would be understood by consumers, PRO-BIO is used to denote the company that is the origin of the range of waters collectively marketed and distinguished in the course of trade under the name LIVING WATERS. LIVING WATERS is thereby used as a separate trade mark.
I do not consider that the expression ‘Rite Price’ that occurs within the various iterations of the Applicant’s composite trade marks functions in a way so as to suggest that it might be a separate and distinct trade mark. Further, the use of the expression ‘Rite Price’ in the Applicant’s radio advertisements is as a part of the phrase ‘Rite Price Heating and Cooling’ which, within the context of the jingle’s words ‘Rite Price Heating and Cooling are sure to have the price that’s right for you’ make it plain that what is being used is in fact a business name rather than a trade mark and that consequently this use does not qualify as a use of a separate trade mark at all.
Section 17 of the Act provides:
17What is a trade mark?
A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
Note:For sign see section 6.
The phrase ‘Rite Price Heating and Cooling’ within the jingle does not serve to distinguish goods or services; rather, it serves to identify the Applicant via its business name.
This use of the expression ‘Rite Price’ as a part of the business name ‘Rite Price Heating and Cooling’ is also reflected, as I have observed above, on the Applicant’s website.
I note that a further problem with the use of the words ‘Rite Price’ (were they not a part of a business name) in radio advertising is that the misspelling is not apparent to a radio audience and therefore is likely to be understood as being a use of the words ‘Right Price’.
Accordingly, I consider that the trade mark falls into the category of trade mark which was labeled as a ‘limping’ trade mark by Jacob J in Philips Electronics BV v Remington Consumer Products [1998] RPC 283, at 312:
...what we have here is a kind of “limping mark”, always used with what is obviously a proper trade mark. The same was true of Treat which was always used with “Silver Spoon”.[5] Neither sign was ever used by the proprietor on its own. And this was evidence of a lack of capacity to distinguish. I do not of course say that you cannot have two trade marks used for the same goods, or that part of a sign - a “sub-sign” - cannot also be a trade mark: both Ford and Fiesta are obviously valid marks. But there are these other cases, where a sign proffered as a valid mark cannot really stand up on its own.
[5] British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281
The Applicant has not established that the trade mark is capable of distinguishing the Applicant’s services.
Decision
Section 33 of the Act provides:
33Application accepted or rejected
(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 under this Act for rejecting it.
Note:For this Act see section 6.
(2)The Registrar may accept the application subject to conditions or limitations.
Note:For limitations see section 6.
(3)If the Registrar is satisfied that:
(a)the application has not been made in accordance with this Act; or
(b)there are grounds under this Act for rejecting it;
the Registrar must reject the application.
Note:For this Act see section 6.
(4)The Registrar may not reject an application without giving the applicant an opportunity of being heard.
Note:For applicant see section 6.
I reject application 1420127.
Iain Thompson
Hearing Officer
Trade Marks Hearings
14 June 2013

[2013] ATMO 42

14 June 2013