Kraft Foods Global Brands LLC v International Foodstuffs Co - [2011] ATMO 104

TRADE MARKS ACT 1995

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

Re:Opposition by Kraft Foods Global Brands LLC to registration of trade mark application 1126005(29, 30) - FRITZ - filed in the name of International Foodstuffs Co.

Delegate:

Alison Windsor

Representation:

Opponent: Celia Davies of Freehills Patent & Trade Mark Attorneys

Applicant: Matthew Swinn of Corrs Chambers Westgarth Lawyers

Decision:

2011 ATMO 104

S52 Opposition: Grounds under ss 42(b), 44 and 60 pursued – no grounds established – application to proceed to registration – costs awarded against opponent.

Background

International Foodstuffs Co (‘the Applicant’) filed an application to register a trade mark under the provisions of the Trade Marks Act 1995 (‘the Act’). Current details of the application appear below:

Application Number: 1126005

Filing date: 27 July 2006

Goods specification: Class 29: Potato crisps, potato chips, potato sticks; soup products, not comprising sausages or containing sausage products; edible oils; fats; ghee; margarine; butter; milk and dairy products (specifically excluding cheese and cheese products); flavoured milk; milk shakes; fish; poultry and game; preserved, dried and cooked fruits and vegetables; jellies; jams; compotes

Class 30: Pasta; macaroni; noodles; spaghetti; vermicelli; yeast, baking powder and other bakery ingredients; salad dressings, mayonnaise; vinegar; ketchups; sauces(condiments); tea, cocoa, sugar, rice, tapioca, sago; honey; treacle; salt; mustard and flour; none of the foregoing containing or consisting of gingerbread

Trade Mark: FRITZ (‘the Trade Mark’)

The application was examined as required by section 31 of the Act, and after some amendments to the goods specification were effected, it was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks dated 11 October 2007.
On 10 January 2008, Kraft Foods Global Brands LLC (formerly Kraft Foods Holdings Inc, and hereinafter referred to as ‘the Opponent’) filed Notice of Opposition (‘the Notice’). Proceedings then entered the evidence stages, governed by the Trade Mark Regulations 1995 (‘the Regulations’).
The Opponent requested, under the provisions of regulation 5.15, an extension of time of three months in which to serve its evidence in support of the opposition. The extension application was allowed. Just prior to the expiry of the extended time both parties requested that the opposition proceedings be suspended for six months to allow them time to negotiate a settlement. That time period was extended for a further six months on request of both parties. At the end of the period as extended, suspension was terminated and a date was set for the Opponent to serve and file its evidence in support.
From the correspondence on the official file, it appears that the parties were engaged in negotiations for at least a further few months. The applicant’s goods specifications were further restricted on its request resulting in the specifications quoted in paragraph 1 of this decision. Service and filing of all evidence was finally completed in April 2011, after which the Opponent requested a hearing.
The parties appeared before me in my capacity as a Delegate of the Registrar of Trade marks in Melbourne on 20 July 2011. The Opponent was represented by Celia Davies of Freehills Patent and Trade Mark Attorneys. The Applicant was represented by Matthew Swinn of Corrs Chambers Westgarth Lawyers.

The Notice

The Notice as filed was couched in the broadest possible terms. However, prior to the hearing the Opponent advised that it would only be pursuing grounds for opposition relevant to sections 44, 60 and 42(b) of the Act. I treat the remaining grounds in the Notice, as having been abandoned.
I note that since the application was filed on 27 July 2006, the provisions of section 60 as they were prior to the amendments effected by the Trade Marks Amendment Act 2006 apply to this application.[1]
[1] See Apple Computer Inc v Todaytech Group Ltd [2007] ATMO 40

Onus

The onus is on the opponent to establish at least one of the grounds of opposition pursued on the balance of probabilities.[2]
[2] Pfizer Products Inc v Karam (2006) 70 IPR 599; Chocolaterie Guylian N.V. v Registrar of Trade Marks (2009) 82 IPR 13 at [22] to [26]; Sports Warehouse Inc v Fry Consulting (2010) 87 IPR 300 at [36] to [39]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011) at [16] to [32])

Evidence

The declarations provided as evidence in this matter are as follows:
Evidence in support
·     Beverly May Brooks, made 28 September 2010, with Confidential Annexures A and B and Exhibits BMB-1 to BMB-7 (‘Brooks 1’)
·     Ben Hill, made 7 October 2010, with Confidential Annexures A and B and Exhibits BH-1 to BH-10
Evidence in Answer
·     Sarah Frances Bellingham, made 23 December 2010 with Exhibits SFB-1 to SFB-9
·     Matthew Guy Swinn, made 11 January 2011 with Exhibit MGS-1
Evidence in reply
·     Beverly May Brooks, made 24 March 2011 with Exhibit BMB-1 (‘Brooks 2’)
·     Daniel Peter Forrest, made 11 April 2011 with Exhibits DF-1 to DF-8
Beverly May Brooks is the Opponent’s manager of trade mark administration and has worked with the Opponent and its predecessors in title for over 20 years. She states that the Opponent has a history which dates back to 1903 and that it is now the world’s second-largest food company, selling products in over 160 countries worldwide. Ms Brooks makes particular note of the Opponent’s Australian registrations for the trade mark RITZ. She cites three registrations, brief details of which are shown below:

Trade Mark No	Registered from	Trade mark	Goods specification
108161	15/11/1951	RITZ	Class 30: Biscuits and crackers
165333[3]	28/2/1961	Class 30: Biscuits, crackers and cookies
948709	31/3/2003	Class 30: Biscuits, cookies and crackers

[3] While Ms Brooks describes this trade mark as a RITZ trade mark, the word does not appear legibly in the representation, if it is there at all.

Ms Brooks states that the Opponent has registered the word RITZ in many countries worldwide and states that it is one of the Opponent’s global brands, with consumers in over 30 countries being familiar with the RITZ branded biscuits, crackers or cookies (‘the RITZ goods’). She says that the RITZ goods have been distributed in the USA for over 75 years, and in Australia for about 59 years. Estimates of worldwide wholesale sales and promotional and advertising figures for the RITZ goods are set out in Confidential Annexures A and B appended to Brooks 1. Since the material is claimed as confidential, I am unable to quote the figures here. Suffice it to say that the figures are very large indeed.
Ben Hill is the Opponent’s category head for biscuits in Australia and New Zealand with Kraft Foods Limited, which he says is a company related to the Opponent and part of the Kraft Foods group of companies.[4] He says that the principal retailers of the RITZ goods in Australia may be found in all states and territories and include national retailers such as Coles and Woolworths. In addition to the major retailers, he says that the RITZ goods may be found in most other supermarkets and supermarket chains throughout Australia.
[4] Brooks 1, paragraph 22 notes that officers of Kraft Foods Limited are authorised by the Opponent to make a declaration in support of this opposition.
Actual sales and advertising figures are again confidential. Figures have been supplied for the years 2002-2003 up until the date of the declaration and demonstrate very significant sales in Australia for these goods.[5] Mr Hill says that the RITZ trade mark appears on all packaging for the goods and that the range sold in Australia at the time of his declaration included RITZ STICKS crackers, RITZ ORIGINAL crackers, RITZ CHEESE crackers and RITZ reduced fat crackers. At the priority date of the application the range also included RITZ CHIPS crackers and RITZ TOP-EMS crackers.
[5] While unit prices for the Opponent’s goods did not form part of the evidence, an internet search of major supermarket websites discloses a price of less then $3 per item.
Promotion and advertisement of the products, Mr Hill states, is Australia wide and through print media and television. The goods are promoted through a number of widely distributed publications including Women’s Weekly, Who Weekly, Woman’s Day and Australian Good Taste. He says that point of sale promotional material is distributed to approximately 200,000 supermarket stores nationwide in Australia. He also refers to cheese and RITZ cracker combination products which have been served on Virgin Airlines flights to and from Australia, and makes mention of other combination products of this nature which the Opponent produces for general sale.
The Applicant’s evidence is brief, and does not provide any hard evidence about the Applicant’s goods or sales within Australia under the Trade Mark. Ms Bellingham provides information about the positioning of biscuits and potato chips on supermarket aisles via a number of composite photographs taken in major supermarkets in Melbourne, with her general contention being that they are not necessarily sold in close proximity to each other. She comments that biscuit brands which also have a potato chip product under the same brand are not common.
The Swinn declaration provides a listing of the Applicant’s registrations of the Trade Mark around the world, and exhibits a table listing the relevant trade mark registrations that the Applicant and Opponent have obtained in various countries around the world.
The Forrest declaration provides examples of the shelf-placing of biscuits and potato crisps in small supermarkets in order to demonstrate that in smaller establishments crisps and biscuits are likely to be sold on shelves in close proximity to each other. Brooks 2 notes that the Opponent is taking removal or cancellation actions against the Trade Mark in a number of jurisdictions.

Discussion

At the hearing the Opponent began its submissions with a discussion of the ground of opposition under section 44 of the Act.

Section 44 – identical etc trade marks

Briefly, subsection 44(1) provides that an application for registration must be rejected if the applied for trade mark is substantially identical with, or deceptively similar to, the trade mark of another person’s application or registration that has an earlier priority date and covers similar goods to those the Applicant is claiming. The Trade Mark must meet all these requirements before it is taken to have offended against the section.
The Opponent has nominated two earlier dated trade mark registrations which it considers to be relevant for section 44 consideration, namely 108161 (RITZ) and 948709 (MINI RITZ). The Opponent’s goods encompass biscuits, cookies and crackers in class 30, which I have referred to as “the RITZ goods”. The Opponent submitted that some of the Applicant’s goods, in particular potato crisps, potato chips and potato snack food items, are goods of the same description as the RITZ goods. It also submitted that both parties sold goods which were comprised of similar ingredients and that many of the Applicant’s goods could realistically be ingredients for the Opponent’s products. It also noted that some of the parties’ goods are routinely served together, specifying as examples crackers served with soup, butter or jam and biscuits served with tea or coffee. In addition, the Opponent submitted that manufacturers routinely expand their ranges of goods to include co-branded and co-packaged items as exemplified by the Opponent’s television commercial depicting RITZ STICKS being served with a dip, and with the tagline “made to dip”.
I consider that there is some merit in the contention that crackers and savoury biscuits may have similar uses to potato crisps and other potato based snack items, but that is as far as the similarity of goods goes. The Opponent’s argument that similarity occurs because the Opponent’s biscuits and crackers are likely to be used in conjunction with the Applicant’s goods in the situation of, for example, crackers and dip or crackers and cheese, simply does not stand up to scrutiny.
Section 14 of the Act defines ‘similar goods’ in the following terms:
(1) For the purposes of this Act, goods are similar to other goods:
(a) if they are the same as the other goods; or
(b) if they are of the same description as that of the other goods.
For the purposes of section 44 the Opponent’s goods need to be the same as, or of the same description as, the Applicant’s goods before the provisions of the section can be said to apply. Put bluntly, goods are not necessarily of the same description simply because someone has put them onto the same plate. For example, patés or cheese spreads are not goods of the same description as either biscuits or potato chips, even though one may be eaten on top of the other. Similarly, the fact that a sweet biscuit may be eaten in conjunction with a cup of coffee or a cup of tea does not make the biscuit of the same description as the beverage. Neither is it the case that an ingredient which is used to manufacture particular foods needs to be seen as in any way related to the finished product using that ingredient. A degree of commonsense needs to be applied in making distinctions between diverse goods, even if consumers are used to a single company producing and selling a very broad range of products.
In this instance I am satisfied that the Applicant’s potato crisps, potato chips and potato sticks are similar goods to the Opponent’s crackers and biscuits because of their nature and purpose as snack foods and their mode of sale, display and purchase.[6] It is now necessary for me to decide whether or not the two trade marks are either substantially identical or deceptively similar.
[6] Jellinek’s Application (1946) 63 RPC 59; McCormick & Company Inc v McCormick (2000) 51 IPR 102
The Opponent made a single reference to substantial identity in its submissions but did not provide any arguments in support of the issue. I am satisfied that if the accepted test of a side by side comparison is made,[7] it is clear that the words RITZ and FRITZ are not substantially identical.
[7] The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407 at 414.
In respect of deceptive similarity, the Opponent referred to the words of Windeyer J,[8] where he articulated the relevant test:
On the question of deceptive similarity, a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is … between on the one hand the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have, and, on the other hand, the impressions that such persons would get from the [impugned mark].
[8] The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407 at 414.
The Opponent also referred to the comparison of two trade marks requiring both visual and aural assessment of the trade marks, and referred to the words of Lord Parker in Pianotist:[9]
You must take the two words. You must judge them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances, and you must further consider what is likely to happen if each of those trade marks is used in the normal way as a trade mark for the goods of the respective owners of the marks.
[9] Re Application by Pianotist Co Ltd (1906) 23 RPC 774
The Opponent submitted that the goods both it and the Applicant produce are low cost food and snack food items and that the relevant customers are unlikely to labour over their choice of these items. It submitted that decisions to purchase food items are often made quickly and with less concentration and much less scrutiny than would be the case for more expensive items such as electronic goods. In addition, it said, most food items are usually self-service and the food items covered by the FRITZ application and Kraft Foods’ RITZ registrations, including potato snack food items, biscuits and crackers are purchased by categories of consumer who are not particularly discerning.
The Opponent also submitted that crackers, crisps and potato snacks sold under another of the Applicant’s trade marks are mostly packaged in soft and malleable packaging. This, the Opponent said, increases the likelihood that the Trade Mark will be partially obscured once the goods are packed on shelving in retail outlets if the FRITZ goods are sold in similar malleable packaging.
In addition, the Opponent specified that there were both visual and aural similarities between the two trade marks. In respect of the visual aspects of the trade marks, it said that the two trade marks differ only by one letter – the letter F which has been added to the Trade Mark. Both trade marks share the letters R I T Z. The Opponent considered that there is a real likelihood that the Trade Mark could be partially obscured on a supermarket shelf if packaged in soft packaging, resulting in the Trade Mark being mistaken for the Opponent’s RITZ trade mark.
The Opponent contended that the two words, FRITZ and RITZ, are monosyllabic short words, that they have similar length and construction and identical terminations and vowel sounds. After a consideration of the “articulatory phonics” of the words, the Opponent came to the conclusion that the letter F, as a ‘fricative consonant’, would be a subtle sound likely to be unheard, misheard or ignored at the beginning of what amounts to the Opponent’s trade mark. As a result, the Opponent considered that from a phonetic perspective, FRITZ and RITZ are virtually indistinguishable.
On this point I do not entirely agree with the Opponent’s contentions. Certainly, the Opponent’s trade mark RITZ is wholly enclosed within the Trade Mark and they are similar in both appearance and sound. But the addition of the letter F to the Trade Mark does, to my mind, make a significant difference.
To begin with, the word FRITZ is well known as a male given name, which the Oxford[10] and Macquarie[11] dictionaries say is a nickname derived from the German name Friedrich. It was a pejorative name used during World War I for a German soldier. It is a surname as well, though not a common one in Australia, occurring only 415 times on the Search for Australian Surnames database which is based on the electoral roll. According to the dictionaries it has other uses and meanings – for example, saying that something is “on the fritz” apparently means that it is broken or not in working order.
[10] Oxford English Dictionary, 3^rd edition, online version September 2011.
[11] The Macquarie Dictionary Online, Macquarie Dictionary Publishers Pty Ltd.
The word RITZ is also referenced in the Oxford dictionary. ‘The Ritz’ is the proprietary name of a chain of luxury hotels originally founded in the late 19^th century by César Ritz, a Swiss hotelier. The word has moved into the language as a reference to luxury and ostentation – ‘to put on the ritz’ is an expression with the meaning of ‘to make a show of wealth or luxury’, or ‘to behave ostentatiously or haughtily’.
In addition, I am not satisfied that the initial fricative ‘F’ sound at the beginning of the Trade Mark is likely to disappear when the word is spoken. The ‘F’ sound may well be relatively soft, but as it is an initial letter, the mouth must be appropriately shaped for its production and once it is added to the next letter, the letter ‘R’, the result is an ‘FR’ combination which is far from an insignificant portion of any word. I do not consider that the pronunciation of the Applicant’s and Opponent’s trade marks is so close as to render them deceptively similar.

There are also a number of assumptions in the Opponent’s submissions which are not supported by the evidence provided. The Opponent has asked me to infer that the customers buying the Opponent’s and Applicant’s goods will be ‘time poor’; not discerning; unlikely to labour over their choices; distracted and lacking concentration. The Opponent’s view of the customer’s behaviour is said to be exacerbated by the likelihood that the Trade Mark will be used on flexible packaging which may result in it being partially obscured.
This description of a food purchaser is not the customer with which I am familiar, and my view of customer behaviour serves to distinguish this matter from the facts in a previous decision of mine, to which the Opponent referred, made in respect of a comparison between the trade marks TAFT and HAFT.[12]
[12] Hans Schwarzkopf & Henkel GmbH & Co KG v Tars International Limited [2008] ATMO 72
In the TAFT v HAFT opposition, the conflicting goods were those in class 3 and in particular involved preparations for the hair. My comments in that case were that goods sold in cylindrical bottles would, when stacked upon a supermarket shelf, be likely to show only part of the trade mark because of the curvature of the bottle, thus resulting in a likelihood of customer confusion or mis-purchase. I consider the likelihood of this kind of confusion occurring when foodstuffs are involved to be much less because in most cases people tend to be very careful in purchasing things they intend eating. This is, I consider, as true for those people who are ‘time poor’ as it is for those with the leisure to stroll the supermarket aisles slowly. I consider that purchasers of foodstuffs are, in general, less likely to be careless in their choice of goods then are the purchasers of products for cleansing.
I am satisfied, therefore, that the trade marks RITZ and FRITZ are not deceptively similar. The section 44 ground for opposition has not been established.

Section 60 – Trade mark similar to one with a reputation in Australia

As noted earlier, the provisions of section 60 applicable to this opposition are those which were in place prior to the legislation changes effected by the Trade Marks Amendment Act 2006 and are as follows:
60. The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had acquired a reputation in Australia; and
(b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.
Note 1: For deceptively similar see section 10.
Note 2: For priority date see section 12.
The threshold test for the application of this section of the Act requires that the trade marks under consideration be either substantially identical or deceptively similar. As I am not satisfied that this is the case, this ground for opposition fails at the outset.
I think it appropriate to point out, however, that even if this application was governed by the current provisions of section 60 of the Act I would not have found in the Opponent’s favour. I am satisfied that the Opponent does have a considerable reputation in its RITZ trade marks but I am not satisfied that the Applicant’s use of its trade mark would be likely to deceive or cause confusion. I consider that the two trade marks are sufficiently different that even the most careless purchaser would be unlikely to perceive any kind of a connection between the goods of the Applicant and those of the Opponent. Without any likelihood of deception or confusion resulting from the applicant’s use of its trade mark the provisions of section 60 either as it applies in this case or as it currently stands are not met.

Section 42 – Trade mark scandalous or its use contrary to law

Section 42 of the Act relevantly provides:
42. An application for the registration of a trade mark must be rejected if:
(a) …
(b) its use would be contrary to law.
The Opponent’s arguments in respect of section 42(b) refer to breaches of the Trade Practices Act 1974 (‘TPA’) which was superseded by the Competition and Consumer Act 2010 as from 1 January 2011. However, as the TPA was in force at the application’s priority date, it is the provisions of the TPA which are to be considered here, in particular sections 52 and 53 of that Act.
Section 52 of the TPA relevantly stated:
A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
Section 53 of the TPA relevantly provided the following:
A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:
…
(d) represent that the corporation has a sponsorship, approval or affiliation it does not have.
In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd[13] Gibbs CJ noted (at 688):
In McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd (1980) 33 ALR 394 it was rightly held by Smithers J and by Fisher J that to prove a breach of s 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source, and that Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; 1A IPR 465, a decision on the Trade Marks Act 1905 (Cth) as amended, is distinguishable.
[13] (1982) 149 CLR 191
As I have found that the use of the opposed trade mark is not, at a minimum, likely to deceive or cause confusion, it follows that use is not, on the stricter test posited by the TPA, likely to mislead or deceive, nor do I believe use would amount to a false representation in terms of section 53 of the TPA.
The Opponent’s case in respect of section 41(b) also claimed use of the Trade Mark would be contrary to law because it would constitute the tort of passing off. In this regard the words of the Registrar’s Delegate in Baron Philippe de Rothschild SA, Societe Civile de Chateau De Lafite Rothschild, and Groupement Foncier Agricole Des Vignobles De La Baronne Philippine De Rothschild v DCI International Pty Ltd [2011] ATMO 2 (17 January 2011) are apt:
To succeed in an action for passing off, an opponent must establish reputation, misrepresentation and the likelihood of damage[14]. My findings with respect to section 60 of the Act and sections 52 and 53 TPA inevitably mean that this limb of the ground of opposition must likewise fail.
[14] Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302, Betta Foods Australia Pty Ltd v Betta Fruit Bars Pty Ltd (1998) ATPR 41-624
These words being as relevant to this opposition as they were to that decided by Hearing Officer McDonagh in the above decision, I am not satisfied that the Applicant’s use of its trade mark would be contrary to law,[15] and this ground for opposition therefore is not established.
[15] Advantage Rent-A-Car Inc v Advantage Car Rental Pty Ltd (2001) 52 IPR 24 at 32

Decision

Section 55 of the Act provides:
Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:
(a) to refuse to register the trade mark; or
(b)to register the trade mark (with or without conditions or
limitations) in respect of the goods and/or services then specified in the application;
having regard to the extent (if any) to which any ground on which the application was opposed has been established.
I find that none of the grounds of opposition on which the Opponent relied at the hearing have been established.
Trade mark application 1126005 may therefore proceed to registration one month from the date of this decision. If the Registrar has been served with a notice of appeal on or before that time, I direct that registration shall not occur until the appeal has been discontinued or, in the event of a decision from the Court, that the application be subject to that decision.

Costs

The parties sought their costs. Since costs usually follow the event, I award costs against the Opponent pursuant to the official scale.

Alison Windsor

Hearing Officer

Trade Marks Hearings

24 October 2011