L.F.P Inc v Supre Pty Ltd

[2005] ATMO 31

TRADE MARKS ACT 1995

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

Re:Opposition by L.F.P Inc to registration of trade mark application 924543(25) - HUSTLER - filed in the name of Supre Pty Ltd.

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Delegate:	Mary Skivington
Representation:	Opponent: Spiro Pappas of Chrysiliou Law, Patent and Trade Mark Attorneys. Applicant: Unrepresented and did not appear or file written submissions.
Decision:	Section 52 opposition – grounds of opposition under sections 58, 60 and 42(b) established – registration refused. Costs awarded against the unsuccessful applicant.

Background

1. Supre Pty Ltd, (‘the applicant’), filed trade mark application number 924543 to register the trade mark, HUSTLER, on 23 August 2002  for the following goods in class 25:

   Articles of clothing (including accessories related thereto) including but not limited to t-shirts, hats, caps, visors, belts, crop tops, singlets, dresses, jackets, coats, skirts, pants, shorts, tights, bike shorts, pyjamas, robes, underwear, lingerie, swimwear, surfwear, gymwear, sportswear and activewear; footwear.

2. Acceptance of the mark for possible registration was advertised in the Australian Official Journal of Trade Marks on 13 March 2003.

3. L.F.P Inc., (‘the opponent’), filed notice of opposition on 13 June 2003 listing all the grounds of opposition allowed under the Trade Marks Act 1995, (‘the Act’). In due course the opponent filed and served evidence in support of the opposition. The applicant did not file evidence in answer and in fact has taken no part in these proceedings. On 24 September 2004 the opponent applied to be heard and as a delegate of the Registrar of Trade Marks, I heard the matter in Sydney, on 15 March 2005.

4. The opponent was represented by Spiro Pappas of Chrysiliou Law, Patent and Trade Mark Attorneys. The applicant was not represented and did not appear or file written  submissions.

   The evidence

5. The evidence in support comprises a statutory declaration with Exhibits 1-5 and Annexures 1-2, made by James S Kohls, President of L.F.P Inc., on 5 May 2004.

6. Mr Kohls declares that the trade mark, HUSTLER, was first used in 1974 in respect of an adult entertainment magazine and that the trade mark was created by Larry Flynt, founder of HUSTLER magazine.  Mr Kohls declares that the trade mark was registered in Australia on 29 January 1976 in class 16 for an entertainment magazine. HUSTLER magazine has been published and sold in Australia since 1996. Exhibit 1 is a copy of HUSTLER magazine dated January 1996. Exhibit 2 comprises editions of the Australian HUSTLER from 1996 and 1997. Exhibit 3 comprises copies of international editions of HUSTLER. Annexure 1 contains the dollar value of sales for the magazine and other products for the years 1996 to 2001. Mr Kohls also provides an estimate of the dollar value of clothing sold from the end of 2000 to the end of 2003. These figures are not particularly high. Mr Kohls declares that his company has built up a family of HUSTLER trade marks and that in addition to the magazine the trade mark has been used in Australia in respect of clothing and headwear since at least 1999. Exhibit 4 is the December 1999 edition of HUSTLER which carries an advertisement for HUSTLER t-shirts.  In addition to these goods, Mr Kohls declares that other products sold in Australia include pre-recorded videos and DVDs. He declares that the opponent also operates a website, HUSTLERHollywood.com and that clothing bearing the HUSTLER trade mark was first sold by his company from this site in October 2001. Annexure 2 comprises printouts from that site, dated 12 January 2003 in which apparel and leather, videos, DVDs and adult toys, are offered for sale.  These goods are available for purchase in Australia via the Internet site. Exhibit 5 comprises t-shirts and a cap bearing the trade mark. The opponent also operates another HUSTLER pornographic website which, declares Mr Kohls, has had numerous Australian visits.

   Grounds of opposition

7. At the hearing Mr Pappas pressed grounds of opposition under sections 42(b), 43, 58 and 60 of the Act.  The remaining grounds were not pressed and in consequence I find they have not been established.

   Section 58

8. Section 58 of the Act provides that a trade mark application may be opposed on the ground that the applicant is not the owner of the trade mark.

9. In order to establish that the applicant is not the owner of the trade mark the opponent must establish that another person was the first user in Australia, of a trade mark in the course of trade, that was at least substantially identical with the applied for trade mark and that the use was in respect of goods or services that are the same or closely related.

   Substantial Identity

10. Gummow J, in Carnival Cruise Lines Inc. v Sitmar Cruises Limited 31 IPR 375, said in respect of substantially identical trade marks,

    It requires a total impression of similarity to emerge from a comparison between the two marks.  In a real sense a claim to proprietorship of the one extends to the other.

11. The applicant’s trade mark HUSTLER is clearly identical with the opponent’s common law trade mark, HUSTLER used in respect of clothing.  Mr Pappas submitted that the applicant’s trade mark is also substantially identical with the trade mark, ‘HUSTLER Hollywood.com’. The opponent retails a range of goods through this website including apparel, videos, DVDs, and adult toys.  Mr Pappas noted that the word HUSTLER appears in upper case and the lettering is larger and darker than the lettering for the word Hollywood in which only the first letter is in upper case. The .com is in lower case and of course is merely a common Internet address designation.  He submitted that the tests to determine substantial identity were defined by Windeyer J in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 where he said,

    In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.

12. Mr Pappas said that applying these tests it was obvious that HUSTLER which is clearly differentiated from Hollywood is the essential feature of the trade mark and that this word is identical to the applied for trade mark and thus the marks are substantially identical. Mr Pappas drew my attention to Microcom Pty Ltd v Microcom Systems Inc (1998) 41 IPR 163 where MICROCOM and MICROCOM NETWORKING PROTOCOL were found to be substantially identical and Imax Corporation v Vago Imports Pty Ltd [2002] ATMO 80 where IMAX and IMAX SPORTS were also found to be substantially identical.

13. The American film industry has ensured that Hollywood is exceedingly widely if not universally recognised as a geographic location and is thus devoid of any trade mark significance.  However, while the .com also has no trade mark significance it does change the identity of the trade mark from a word to an address. This substantially alters the identity of the trade mark. I find that HUSTLER and HUSTLER Hollywood.com are not therefore, substantially identical.

    Use of the trade marks

14. The priority date of the application is 23 August 2002. The applicant has provided no evidence of use prior to that date. The opponent declares that the HUSTLER trade mark was first used in Australia by the opponent in respect of clothing and headgear in 1999. Exhibit 4 is an advertisement for t-shirts in the HUSTLER magazine of December 1999 in which two of the t-shirts carry the HUSTLER trade mark.  Annexure 2 comprises pages from the opponent’s website, dated 12 January 2003, showing use of the HUSTLER trade mark in respect of clothing including men’s and women’s t-shirts and tank tops. I note that consumers in Australia may purchase these goods from the opponent’s site.

1. I find the opponent’s use of the HUSTLER trade mark in respect of clothing precedes the priority date of the application. The opponent was the first to use its substantially identical trade mark in respect of the same goods and is therefore the owner of the trade mark.  This ground of opposition has been established.

   Section 60

2. In order to satisfy a ground of opposition under the provisions of section 60 of the Act, it must be established that the applied for trade mark is substantially identical with or deceptively similar to another trade mark or trade marks cited by the opponent which have acquired a reputation in Australia, before the priority date, to such an extent that use by the applicant of its trade mark, would be likely to deceive or cause confusion. Section 60 does not require the relevant goods or services to be the same or closely related nor does it require the trade mark on which the opponent relies to be registered or the subject of an application for registration.

3. I have already found that the applicant’s HUSTLER trade mark is in fact identical to the opponent’s HUSTLER trade mark so that the threshold test for the purposes of section 60 has been met.

4. In support of the opponent’s reputation in the HUSTLER trade mark Mr Pappas cited Kenny J in McCormick & Co v Mary McCormick (2001) 51 IPR 102 where he quoted with approval a discussion, by Hearing Officer Ian Thompson in Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl GmbH & Co KG (1999) 47 IPR 423 of ways in which reputation in a trade mark can be developed. Mr Thompson said,

   [I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.

   As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also the esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the `recognition' component of the trade mark's reputation. The credit, image and values projected by a trade mark attaches to the `esteem' component of the reputation as do the public events and other trader's marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, `contra deals' and so forth.

   It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.

5. Mr Pappas submitted that the evidence shows that the opponent’s HUSTLER trade mark has both a strong ‘recognition’ component and a strong ‘esteem’ component due to national and international use of the trade mark, sales of its products and the operation of its websites

6. Clearly, an opponent's reputation can accrue in a variety of ways. The evidence shows moderate sales for the opponent’s magazines where clothing bearing the HUSTLER trade mark is advertised for sale. The evidence also shows that clothing including t-shirts, tank tops and caps, as well as adult toys, videos and DVDs may be purchased in Australia via the Internet. HUSTLER magazine has a restricted classification from the Office of Film and Literature Classification so that it comes in a sealed bag and is not prominently displayed at points of sale. The websites are restricted pornographic sites which would deter many consumers from entering them.  Because of the nature of many of the goods sold by the opponent opportunities for advertising and promotion are limited as are the venues where the goods may be displayed. For the same reason the opportunities to sponsor public events and philanthropic activities, all of which would go towards establishing a reputation, are limited. This inevitably works against the development of a reputation of any significance with the public at large. However, on the other hand the film, The People Versus Larry Flynt, based upon the founder of HUSTLER, Larry Flynt, has contributed to the recognition of the trade mark amongst a significant number of consumers who would otherwise be unaware of the trade mark. The magazine has been available for purchase since 1996. Its continuing presence indicates that it has an established readership and for a number of years the opponent has actively promoted its goods and services via its various websites. I consider that within the niche market where goods of this nature are bought and sold the opponent has achieved a reputation such that consumers would be likely to be deceived or confused if the applicant were to use its trade mark. This ground of opposition has been established.

   Section 43

7. Section 43 provides that registration must be rejected in respect of particular goods or services if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark is likely to deceive or cause confusion.  It has been confirmed in Winton Shire Council v Lomas (2002) 56 IPR 72 that this ground is directed to the mark itself, and not to any deception or confusion caused by the reputation in Australia of some other trade mark. The mark itself must connote that the goods or services to which the trade mark is to be applied have a quality or attribute which they do not actually possess per Re Trade Mark 'Orwoola', (1909) 26 RPC 850.

8. The Macquarie online dictionary defines HUSTLER as,

   1. an energetic person, especially someone pursuing an opportunity to make money, who sweeps aside all obstacles in their path.

   
   

   2. one who obtains money by questionable methods, especially in gambling.

9. Mr Pappas submitted that in addition to these primary meanings the evidence establishes that the opponent’s trade mark is so well known that use by the applicant of its HUSTLER trade mark would falsely connote that the opponent has in some way approved that use or that the services are sponsored, endorsed or in some way connected with the opponent.

10. Cases such as Twentieth Century Fox Film Corporation v Durkan, 47 IPR 651 and Down to Earth (Victoria) Co-operative Society Ltd v Schmidt (1998) 41 IPR 632, indicate that a connotation that the product is sponsored, endorsed or somehow connected with another individual will arise only where the expression or name in question has achieved a currency in general language or amongst the specialist audience to whom the goods or services will be made available.

11. On the basis of the evidence before me and Mr Pappas’ submissions I am not satisfied that HUSTLER does enjoy a currency in the general language or indeed even with the customer base for adult goods and services.  This ground of opposition has not been established.

    Subsection 42(b)

12. Subsection 42(b) of the Act provides that an application for the registration of a trade mark must be rejected if its use would be contrary to law.

13. Mr Pappas submitted that use of the trade mark would be contrary to section 52 of the Trade Practices Act 1974, which provides that ‘a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.’

14. The applicant meets the threshold test of being an incorporated body.  I must now decide if use by the applicant of its trade mark would be contrary to law. It is not sufficient to establish this ground of opposition to find only that use of the trade mark could be contrary to law, per Madgwick J in Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683. The relevant standard to be applied is that there must be a ‘real or not remote chance or possibility’ of a reasonably significant number of people being misled or deceived per Equity Access Pty Limited v Westpac Banking Corporation (1989) 16 IPR 431. It is not necessary to prove that misleading and deceptive conduct has actually occurred. It is enough if there is a real likelihood of misleading or deceptive conduct. Shanahan's Australian Law of Trade Marks and Passing Off, 3rd edition, 2003 at page 598, states:

    Misleading conduct does not merely cause confusion; it actually directs a person towards the wrong choice.

15. Mr Pappas submitted that consumers would be misled into a belief that the applicant was in some way connected with the opponent through an association, endorsement or sponsorship. He noted that the opponent was the first to use its trade mark in respect of the same kind of goods claimed by the applicant.

16. The opponent’s goods cater for a niche market. They are advertised for sale in the opponent’s HUSTLER magazine and via the opponent’s pornographic websites and thus exposure to the purchasing public is more limited than it would be if the goods were advertised and promoted via more conventional channels. However the film, The People Versus Larry Flynt, has exposed the trade mark to a significantly greater number of people than would be the case if the opponent had to rely entirely on its normal means of advertising.

17. On the basis of the opponent's evidence and submissions, I am satisfied that substantial number of potential customers on being confronted by the applicant’s HUSTLER trade mark would be likely to be misled into believing that they were connected in the course of trade with the opponent. This ground of opposition has been established.

    Decision

18. The opponent has succeeded in establishing its grounds of opposition under sections 58, 60 and 42(b) of the Act. Therefore in accordance with section 55 of the Act, I refuse to register trade mark 924543.

    Costs

19. The opponent sought its costs.  The general rule in awarding costs is that costs are usually awarded against the unsuccessful party. I see no reason why costs should not follow the general rule. I award costs against the applicant and direct that the applicant pay the costs of the opponent in accordance with the Official Scale (Schedule 8 of the Trade Marks Regulations 1995).

    Mary Skivington
    Hearing Officer
    Trade Marks Hearings
    24 June 2005