La-Z-Boy Incorporated v Lazy Holdings Pty Ltd

[2019] ATMO 49

TRADE MARKS ACT 1995

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

Re:Opposition by La-Z-Boy Incorporated to registration of trade mark application 1781286 (20) - LAZYBED - in the name of Lazy Holdings Pty Ltd.

DELEGATE:

Iain Thompson

REPRESENTATION:

Opponent: Wrays

Applicant: Kemp Strang Lawyers

DECISION:

2019 ATMO 49

Trade Marks Act 1995

Section 52 opposition to registration - section 60 – because of the

reputation of the Opponent’s trade mark the use of the Trade Mark is likely to deceive or cause confusion.

Background

1. In these proceedings under section 52 of the Trade Marks Act 1995 (‘the Act’) Lazy Holdings Pty Ltd (‘the Applicant’) has applied to register the trade mark which appears below:

Application No:           1781286
Priority Date:               5 July 2016

Goods:Class 20: Foam mattresses (‘the Goods’)

Trade Mark:                LAZYBED

(‘the Trade Mark’)

1. The Trade Mark was examined in compliance with section 31 of the Act and, on 1 December 2016, advertised as accepted for possible registration in the Australian Official Journal of Trade Marks.

1. On 27 January 2017, La-Z-Boy Incorporated (‘the Opponent’) filed a Notice of Intention to Oppose the registration of the Trade Mark followed, on 27 February 2017, by a Statement of Grounds and Particulars detailing grounds under sections 44, 60, and 42 of the Act.

1. On 10 April 2017, the Applicant filed a Notice of Intention to Defend.

1. The parties have filed the following declarations as evidence in these proceedings:

Evidence in Support

Colleen M Fogle, Director of the Opponent, made on 26 June 2017 with Exhibits CF-1 to CF-16.2.

Evidence in Answer

Matthew John Turnham, a Director of the Applicant, made on 10 October 2017, Exhibits MJT-1 to MJT-18.

Evidence in Reply

Colleen M Fogle, Director of the Opponent, made on 19 December 2017, with Exhibits CF-17 to CF-19.

1. Both parties have been informed of their right to be heard or to make written submissions. Neither party elected to be heard. The Opponent has filed written submissions by Wrays and the Applicant has filed written submissions by Kemp Strang Lawyers.

1. Now, in order that the Registrar may discharge her obligation under section 55 of the Act to decide the matter, it has been passed to me, one of her delegates, for my decision on the written record which is comprised of those materials mentioned in the foregoing paragraphs.

Onus and Relevant Date

1. The Opponent bears the onus of establishing a ground of opposition which is detailed in the Statement of Grounds and Particulars on the balance of probabilities.1

2. The relevant date (‘the Relevant Date’) at which the grounds must be considered is the filing date2 of the opposed application and I note that where section 60 (under which I will decide this matter) specifies the “priority date” that date is here the same as the filing date.

Evidence

The Opponent

1. 
   The Opponent manufactures a range of furniture including lounges, reclining armchairs, and sofa beds which it sells in Australia under the trade mark LA-Z-BOY as well as the formative trade marks LA-Z-ROCKER (‘platform rocker chairs’ or ‘recliner rockers’) and LA-Z-BOY

   1 Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787; (2006) 70 IPR 599; [2006] AIPC 92-146 per

   Gyles J at [6] to [26]; Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156 at [132] to [133].

   2 Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1953] HCA 73; (1954) 91 CLR 592.

GALLERY (wholesaling and retailing of furniture). I will term the Opponent’s trade marks LA-Z-BOY and LA-Z-BOY GALLERY “the Opponent’s LA-Z Trade Marks”.

1. While the Applicant does not concede the extent of the use of the Opponent’s LA-Z Trade Marks, I consider that the Opponent’s summation in its written submissions is an accurate reflection of such in Australia:

The Opponent has been using the LA-Z-BOY Trade Mark globally since the 1920s and in Australia since 1958, which is almost 60 years prior to the [Relevant Date]. The Opponent’s reputation and recognition by the public generally is supported by the following facts:3

(a)    the Opponent retails the Opponent’s Goods in approximately 300 stores throughout Australia (see Fogle Declaration No. 1, paragraph 28);

(b)     the Opponent’s consolidated revenue attributable to its sales […] under the LA-Z-BOY trade mark between 2005 and 2017 was [in the hundreds of millions of dollars] (see Fogle Declaration No. 1 at paragraph 32);

(c)     the Opponent’s consolidated revenue attributable to its sales of sleeper sofas which have been, and continue to be, sold in connection with mattresses in Australia under the LA-Z-BOY trade mark since November 2007 [many hundreds of thousands of dollars] (see Fogle Declaration No. 1 at paragraph 34);

(d)   over the previous 10 years (since 2007) the Opponent has spent [extensively] per year on advertising the [Opponent’s LA-Z Trade Marks] in Australia (see Fogle Declaration No. 1 at paragraph 39);

(e)    the Opponent has authorised the publication of advertising featuring the [Opponent’s LA-Z Trade Marks] in many different catalogues, magazines and flyers. The Opponent has provided 45 examples of this (see Fogle Declaration No. 1, paragraphs 40 to 43 and annexures CF-7.1 to CF-10.4);

(f)   the Opponent obtains aural brand exposure for its LA-Z-BOY and LAZY BOY trade mark in Australia in relation to the Opponent’s Goods via, amongst other mediums, television. Examples of television exposure include appearances of the LA-Z-BOY and LAZY BOY trade marks in connection with furniture goods on such famous game shows as ‘Wheel of Fortune’ and ‘The Price Is Right’ (see Fogle Declaration No. 1 at paragraph 44);

(g)   the Opponent promotes the [Opponent’s LA-Z Trade Marks] on its website and on social media platforms including Facebook, Pinterest and

3 I note that subparagraphs (a) to (d) contain confidential figures which I have redacted.

The Applicant

YouTube (see Fogle Declaration No. 1 at paragraphs 47 to 50 and accompanying annexures CF-11.1 and CF-12.4);

(h)     the Opponent conducts sales promotions in connection with the LA-Z- BOY trade mark via popular fast-food outlet, Red Rooster, multiple men and women’s magazines, and in connection with national cricket legend, Shane Warne and popular Australian beer, Victoria Bitter (see Fogle Declaration No. 1 at paragraph 51 and accompanying annexures CF-13.1 to CF-13.5);

1. the Opponent has previously marketed and continues to market, its LA- Z-BOY trade mark at various trade shows in Australia annually in connection with the Opponent’s Goods (see Fogle Declaration No. 1 at paragraph 52 and accompanying annexures CF-14.1 and CF-14.2).

1. Mr Turnham declares as to the evolution of the idea for the Applicant’s product, a “bed-in-a- box” and the development of the Trade Mark. The “bed-in-a-box” concept is one where the Goods are delivered to the consumer to be instantly unpacked. The balance of Mr Turnham’s declaration is a detailed visual comparison of the Trade Mark with those of the Opponent. However, such detailed comparisons are not helpful because aural similarities are also relevant, purchasers will rarely have the trade marks and the products side by side for comparison and, in fact, either of the parties’ trade marks might be imperfectly remembered: Australian Woollen Mills Ltd v FS Walton & Co Ltd.4

Section 60

Statement of Grounds and Particulars

1. In its Statement of Grounds and Particulars the Opponent asserts:

[…] in order to establish an opposition under section 60, the Opponent must demonstrate, on the balance of probabilities, that at the Priority Date:

a.      the La-Z-Boy Marks had acquired a reputation in Australia (that is, recognition of the La-Z-Boy Marks by the Australian public generally); and

b.       because of that reputation, the Applicant’s use of the Trade Mark is likely to deceive or cause confusion.

The Opponent is a world-famous, leading producer of furniture products. The Opponent has been operating since the 1920s (beginning in the United States of America and adopting the LA-Z-BOY trade mark in 1929 for use, initially, in

4 [1937] HCA 51; 58 CLR 641 at pp 658-659.

connection with reclining chairs) and now trades in nearly every major international country in the world. Along with residential furniture, the Opponent also licenses the LA-Z-BOY trade mark for use with furniture products outside the home, including outdoor furniture, spas and hot tubs.

The Opponent entered the Australian market in 1958. […]

Through use in Australia since 1958, the Opponent has acquired a reputation in [Opponent’s LA-Z Trade Marks] in Australia in connection with, among other things, sleeper sofas, sofas, chairs, lounge chairs, bed settees, dining furniture, ottomans, outdoor furniture, folding armchairs, spas, hot tubs, recliners, tables, sectionals and loveseats.

The Opponent has an extensive reputation globally, and relevantly, in each State and Territory of Australia for the [Opponent’s LA-Z Trade Marks] in connection […] furniture and the retailing of furniture.

The Opponent’s furniture is sold by a large number of popular retailers including Harvey Norman and Domayne. […]

By reason of the Opponent’s extensive reputation in Australia and around the world, use and registration of the Trade Mark by the Applicant is likely  to deceive or cause confusion. The Applicant’s use and registration of a mark containing the phonetically equal prefixes “LAZY” or “LA-Z” in relation to the Applicant’s Goods would likely be regarded by consumers as indicating goods and services from the same trade source as the Opponent.

Essentially, consumers seeing the Trade Mark in reference to the Applicant’s Goods are likely to be misled5 into believing that:

a.   the Applicant is, and at all material times was, and will continue to be, the Opponent; or

b.   the Applicant is, and at all material times was, and will continue to be, affiliated, endorsed or sponsored by the Opponent; or

c.    the Applicant’s Goods supplied under the Trade Mark are, and at all material times were, and will continue to be, those of the Opponent; or

d.    the Applicant’s Goods supplied under the Trade Mark are, and at all material times were, and will continue to be, affiliated, endorsed or sponsored by the Opponent, when none of the above is true.

Section 60 - Framework

1. Section 60 of the Act provides:

5 I note that word “mislead” couches the question at a higher standard than that within section 60 of the Act which refers to “deceive or cause confusion”: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191; (1982) 42 ALR 1; (1982) 1a IPR 684; [1982] ATPR 40-307; (1982) 56 ALJR 715; 1 TPR 282 at [30].

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

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

(a)    another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

(b)    because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

Note:       For priority date see section 12.

1. The Opponent must therefore establish that the trade mark(s) upon which it relies:

a.had, at the priority date, a reputation in Australia such that

b.the use of the Trade Mark would be likely to deceive or cause confusion.

1. In McCormick & Co Inc v McCormick (‘McCormick’) Kenny J said of “reputation”: 6

What is intended by the word “reputation” in s 60? The word is defined in The Macquarie Dictionary as follows:

reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.

Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to “the recognition of the McCormick & Co marks by the public generally.

1. In Le Cordon Bleu B.V. v Cordon Bleu International Ltee7 Heerey J said that the reputation required to be demonstrated (albeit in relation to section 28(a) of the repealed Trade Marks Act 1955)8 was to be:

   ... one of which a significant number of persons were aware...What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient.

6 [2000] FCA 1335; (2000) 51 IPR 102; [2000] AIPC 38-192 at [81].

7 [2000] FCA 1587; (2000) 50 IPR 1.

8 The word ‘reputation’ was not used in subparagraph 28(a) of the superseded Act. All that was required for subparagraph 28(a) was that use of the trade mark “be likely to deceive or cause confusion” and Heerey J

imported the word “ reputation “ into his quoted remarks because he was following Gummow J’s judgment in

Johnson & Johnson v Kalnin [1993] FCA 210; (1993) 26 IPR 435 at 438.

1. Kenny J explained in McCormick how the reputation of a trade mark is assessed by the decision-maker:9

   In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product: see, e.g., Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer plc v Effem Foods Pty Ltd (2000) AIPC 91- 560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This Court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd [2000] FCA 618 (“Gymboree”), Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 (“Nettlefold”), in which Heerey J relied upon the public visibility of the applicant’s marks over approximately two decades as well as a

   $100,000 promotional campaign in finding that a reputation for the purposes of    s 28 of the 1955 Act existed.

1. As to the assessment of the likelihood of deception or confusion, it is moderated by the factors discussed by French J in Registrar of Trade Marks v Woolworths.10 Absent any requirement under section 60 that the trade marks under consideration be deceptively similar, these factors are:

(i)     [...] 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

9 Op cit at [81].

10 [1999] FCAFC 1020; [1999] FCA 1020; (1999) 93 FCR 365; (1999) 45 IPR 411; [1999] AIPC 91-499 at

[50].

goods or 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 [...] must be considered in respect of all goods or 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.

In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v The Bali Company Inc (‘Berlei’) [1973] HCA 43; (1973) 129 CLR 353 at

362:

“...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion.”

1. Further, the terms “deception” and “confusion” refer to two different mental states. The differences between “deception” and “confusion” were explained by Richardson J in Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd:11

   ‘Deceived’ implies the creation of an incorrect belief or mental impression and ‘causing confusion’ may go no further than perplexing or mixing up the minds of the purchasing public .... Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant’s mark come from some other source and confused to being caused to wonder whether that might not be the case.

1. Additionally, as Rich J said in Radio Corporation Pty Ltd v Disney:12

In matters such as this we are dealing with the vague and indefinite impressions of the great mass of the public who neither are required nor desire to refine upon distinctions of this sort. To them it is shown that the name “Walt Disney” summons up a picture of “Mickey Mouse” and the picture of Mickey Mouse reminds them of “Walt Disney.” The foundation of this is authorship no doubt. But somehow or other, how, it is fruitless to inquire, they connect the appearance on an article of the name or form of “Mickey Mouse” with “Walt Disney.” This being so, it is, I think, impossible for the appellant to negative all likelihood of confusion.13 It is no part of our duty to state in definite terms precisely how the public will be misled or what kind of connection they will impute. Confusion involves indefiniteness of ideas.

11 1979] RPC 410 at 423.

12 1937] HCA 38; (1937) 57 CLR 448.

13 I note that the onus is now on an opponent to establish the likelihood of deception or confusion.

1. It is also axiomatic that “confusion” may occur only when initially considering the purchase of the goods and might not persist: in Nettlefold Advertising Ply Ltd v Nettlefold Signs Pty Ltd Heerey J said:14

   A probability of confusion, if it is real, is sufficient even though the confusion may be unlikely to persist up to the point of, and be a factor in, inducing actual sales: Southern Cross at 495. There may be confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived: Re Hack’s Application (1940) 58 RPC 9 at 103-104.

Section 60 - Discussion

1. In my consideration, based on the matters outlined in paragraph [11] above, the Opponent’s LA-Z-BOY trade mark (and to a slightly lesser extent its LA-Z-BOY GALLERY trade mark) had, at the Relevant Date, strong reputations in Australia in relation to “lounge suites”, “recliner rocker chairs” and “sofa beds”.

1. Further, most people, on seeing the Opponent’s LA-Z-BOY trade mark will recognise and remember it as being pronounced “Lazy Boy” despite the alphabetical letter Z, in this context, utilising the American pronunciation “zee” rather than the Australian pronunciation of that letter: “zed.” And, in any event, most Australians who have watched the television gameshows on which the Opponent’s goods have been prizes have, in effect, been educated that the Opponent’s LA-Z-BOY trade mark is pronounced “lazyboy”. The aural uses of the Opponent’s LA-Z-BOY trade mark in this way are, in terms of subsections 7(1) and 7(2) of the Act, uses of that trade mark as LAZYBOY without additions or alterations which substantially affect its identity.

1. Whilst the Applicant stresses that its business model is that of the concept of a “bed-in-a- box” being delivered to a customer’s door, what I am to consider is the Goods to the full breadth of the specification, which includes such goods sold through department and  furniture stores. The words of Mason J in Berlei may withstand reiteration:15

   ...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion.

14 [1998] FCA 1704 (1997) 38 IPR 495 at p 501.

15 [1973] HCA 43; (1973) 129 CLR 353 at p 362.

1. It is therefore no answer for an opponent in these circumstances to observe that there have been no instances of confusion because it follows that, if the goods involved had, as at the Relevant Date, been marketed in different ways, the lack of confusion might be unsurprising.

1. In Pottle Productions Inc v Rute Ithalat Ve Ihracat Anonim Sirketi the Registrar’s delegate observed:16

   The assessment of the likelihood of deception or confusion under section 60 is informed by the strength of the reputation of the Opponent’s trade mark(s), the inherent distinctiveness thereof, the degree of similarity between the trade marks under consideration and the nexus or connection between the goods and/or services of the parties. Each of these is a variable and it is possible that a trade mark’s reputation might be sufficiently strong and the degree of similarity to an opposed trade mark be so great (particularly where the trade marks are inherently distinctive) that confusion or deception will be a likelihood where very little, if any, nexus or connection exists between the goods and/or services under consideration.

1. The element “LA-Z” and its phonetic equivalent “lazy” is, in relation to “lounge suites”, “recliner rocker chairs” and “sofa beds”, both distinctive and memorable. It occurs at beginning of both the Opponent’s LA-Z Trade Marks and the Trade Mark; the beginning of a trade mark is usually the most important for the purposes of comparison: see London Lubricants (1920) Limited’s Application where Sargent LJ observed that:17

   The tendency of persons using the English language to slur the termination of words also has the effect necessarily that the beginning of words is accentuated in comparison and, in my judgment, the first syllable of a word is, as a rule, far more important for the purpose of distinction.

1. Whilst the Applicant has filed evidence which suggests that “mattresses” and “sofa beds” are not sold in the one shop, the Opponent has also filed evidence which suggests that those goods are sold through the same shops and that it does, in fact, sell mattresses as separate items. Moreover, there is, in my consideration, a strong notional connection, or associative force, between “sofa beds” and “mattresses”.

1. Additionally, the word “bed” within the Trade Mark also has (within the context in which it appears) both an associative force with the Opponent’s goods, “sofa beds” and an alliterative resonance with the word “boy” within the Opponent’s LA-Z-BOY trade mark.

16 [2012] ATMO 124 at [40].

17 (1925) 42 RPC 264 at p 279.

1. In balancing these factors, and taking into account the reputation of the Opponent’s LA-Z- BOY trade mark, and the similarities of the trade marks as well as their differences, I consider that a person within a shop upon encountering the Goods bearing the Trade Mark would, because of the reputation of the Opponent’s LA-Z-BOY trade mark, be likely to be at the least caused to wonder whether the Trade Mark indicates that the Goods were made by the Opponent or under its aegis.

1. The Opponent has established its ground under section 60 of the Act.

Decision

1. Section 55 of the Act relevantly provides:

55 Decision

(1)    Unless subsection (3) applies to the proceedings, the Registrar must, at the end, decide:

(a)    to refuse to register the trade mark; or

(b)    to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

having regard to the extent (if any) to which any ground on which the application was opposed has been established.

Note:       For limitations see section 6.

1. I refuse to register application 1781286.

Costs

1. Both parties have requested their costs in these proceedings but it is the Opponent which has established its opposition to registration. Therefore, pursuant to section 221 of the Act, I award costs against the Applicant at the official scale set out in Schedule 8 to the Trade Mark Regulations 1995.

Iain Thompson Hearing Officer

Trade Marks Hearings 26 March 2019