Le Vian Corporation v Bolton Gems Pty Ltd

[2016] ATMO 51

TRADE MARKS ACT 1995

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

Re:Opposition by Le Vian Corporation to registration of trade mark application 1564968(14) - AUSTRALIAN CHOCOLATE DIAMONDS BY ETERNITY DIAMONDS DEVICE - in the name of Bolton Gems Pty Ltd.

Delegate:

Jock McDonagh

Representation:

Opponent: Julian Cooke of Counsel instructed by Corrs Chambers Westgarth, Lawyers

Applicant: Blake Knowles of Cullens, Patent and Trade Mark Attorneys

Decision:

2016 ATMO 51

Reg 21.19 requests by Opponent (twice) and by  Applicant (once) for further material to be considered denied

Section 52 opposition to registration – ss 42(b), 58, 60 and 62A grounds pressed – no ground of opposition established – application to proceed to registration

Background

1. Bolton Gems Pty Ltd (‘the Applicant’) has filed an application under the Trade Marks Act 1995 (‘the Act’) to register a trade mark, details of which appear below:

Application No.	Trade Mark	Priority Date	Goods & Services
1564968	28.06.13	Class 14: Diamonds; Jewellery incorporating diamonds; Custom jewellery; Gold jewellery; Jewellery; Jewellery incorporating precious stones; Necklaces (jewellery); Pendants (jewellery); Personal jewellery; Ring bands (jewellery)

1. The application was examined in accordance with section 31 of the Act and on 21 November 2013 it was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks.

2. Le Vian Corporation (‘the Opponent’) filed Notice of Intention to Oppose the application on 21 January 2014, and a Statement of Grounds and Particulars (‘the Statement’) on 17 February 2014. The Statement nominated grounds under sections 42(b), 58, 60 and 62A of the Act.

3. Subsequently the parties filed their evidence in accordance with the Trade Mark Regulations 1995 (‘the Regulations’).

4. The parties requested to be heard and matter was set down to be heard in Sydney on 12 October 2015. The hearing was before me as a delegate of the Registrar of Trade Marks. Julian Cooke of counsel instructed by Corrs Chambers Westgarth, Lawyers, appeared for the Opponent. Blake Knowles, Trade Mark Attorney with Cullens Patent and Trade Mark Attorneys, appeared for the Applicant.

5. The Opponent did not press the section 58 ground for the applications noted above, and I formally find that that ground has not been established.

   Onus and Relevant Dates

6. The Opponent nominated the grounds of opposition detailed as set out in the Statement. The onus is upon the Opponent to establish at least one of these grounds on the ‘balance of probabilities’.[1]

   [1] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, following Sports Warehouse Inc v Fry Consulting [2010] FCA 664; (2010) 87 IPR 300 at [36] to [39], Chocolaterie Guylian NV v Registrar of Trade Marks [2009] FCA 891, (2009) 82 IPR 13 at [22] – [27] and Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599

7. The time at which the grounds of opposition must be established is the date of filing of the application.[2]

   [2] See Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 595

   Evidence

8. Evidence was filed as follows:

Declarant	Position	Date Made		Annexures
Evidence in Support
Edmond LeVian (‘LeVian 1’)	Director of Opponent	3.06.14		EL-1 to EL‑22
Evidence in Answer
Brett Matthew Bolton (‘Bolton’)	Managing Director of Applicant	19.08.14		BMB-1 to BMB-29
Evidence in Reply
Edmond LeVian (‘LeVian 2’)	Director of Opponent	24.11.14		A to E
Bruno Sane (‘Sane’)	General manager Global Marketing Rio Tinto Diamonds	21.11.14
Farnaz Hakimian (‘Hakimian’)	General Counsel for Opponent	24.11.14

Preliminary Matter

1. On 29 July 2015, prior to the scheduling of the hearing, the Opponent’s attorneys filed a declaration that it sought to be considered under Regulation 21.19 of the Regulations. Attorneys for the Applicant were advised that the material had been filed and how to access it on the IP Australia ‘Objective Connect’ system. Both parties were advised that the request would be considered at the hearing of the substantive matter.

2. A month after the hearing, attorneys for the Opponent sought to have further material considered under Regulation 21.19. The material was a declaration exhibiting what was said to be an unsolicited email to the Opponent, asking if there was a connection between the Applicant and the Opponent. Submissions were sought from the Applicant’s attorneys.

3. The Applicant’s attorneys opposed the consideration of both sets of material, based on the same reasoning as for the first request. I shall discuss such reasoning later.

4. On 8 December 2015, the Applicant’s attorneys also sought to have five declarations taken into account under Regulation 21.19, as a form of ‘further evidence in reply’.

5. For reasons that follow, I have decided not to take any of the proffered material into account when making my decision.

6. Attorneys for both parties referred me to Fed Square v Federation IP Pty Ltd[3] (‘Fed Square’) and AgCare Biotech Pty Ltd v Crop Smart Pty Ltd[4] (AgCare) in their submissions on the first request under Regulation 21.19.

   [3] [2015] ATMO 42

   [4] [2015] ATMO 7

7. Mr Cooke, for the Opponent, submitted that the decisions supported the guiding principle that a serious opposition should be decided on the merits of the case with all relevant information available to the delegate of the Registrar to make a decision.

8. He continues in submitting that the delegate in Fed Square took additional material into account where it was of highl probative value and was likely to significantly affect the outcome of the opposition.

9. Mr Cooke noted that the delegate in AgCare took material into account where it was closely relevant to existing critical evidence.

10. While Mr Knowles, for the Applicant, generally concurred with Mr Cooke’s characterisation of the cited authorities, he pointed out that the delegate in Fed Square stated (at [55]) that:

    it is not sufficient to simply show that the evidence is relevant and there is a possibility that the opposition may fail without it … there must be further circumstances that make it reasonable for the material to be taken into account.

11. I have perused the initial material sought to be considered under Regulation 21.19 in this matter. I note that the two declarants are involved in the retail jewelry industry and both have commercial relationships with the Opponent. While I do not doubt that the opinions held by the declarants are honestly held and given, the weight I would give to their evidence would not significantly affect the outcome of this opposition.

12. I do not intend to take the additional material into account under the provisions of Regulation 21.19.

13. The material forwarded to me after the hearing by the Opponent’s attorneys is a declaration exhibiting an unsolicited email from the general manager of an Australian jewelry firm on 1 November 2015 to the Opponent asking if the Applicant’s web site was affiliated with the Opponent.

14. I have already stated that the time at which the grounds of opposition must be established is the date of filing of the application. The email post-dates the date of filing by some two years. In any event, I consider that I would give a single query by one industry insider little weight in deciding this matter.

15. Therefore, again I do not intend to take the additional material into account under the provisions of Regulation 21.19.

16. As the additional material sought by the Applicant’s attorneys to be considered was sought to repudiate the Opponent’s additional material, there is no need for it to be considered in this opposition. I do not intend to take the Applicant’s additional material into account under the provisions of Regulation 21.19.

    Discussion

17. The Applicant, including its predecessor and related entities, has always been a family owned and operated Australian business. It was established by the grandparents of the current Managing Director of the Applicant, subsequently acquired by the parents of the managing Director, and is now owned by the Applicant. See Bolton at [5].

18. The Opponent is a family business of Persian descent that established its modern business in New York City, USA, in 1950: LeVian1 [5] and [6]. Since about 2000, the Opponent has experienced considerable growth with its products being sold in over 5,000 stores in the USA and internationally: LeVian1 [7].

19. The Opponent attributes much of its recent success to its marketing strategy in relation to brown-coloured diamonds, which it has marketed as ‘chocolate diamonds’: LeVian1 [8].

20. In recent years, the Opponent has gained registration for the trade mark CHOCOLATE DIAMONDS in the USA, Canada and the European Community: LeVian1 [16]. It applied for recognition of the word mark CHOCOLATE DIAMONDS as an International Registration Designating Australia (IRDA) – Application 1605774, International Registration 1121032 – on 17 December 2013: LeVian1 [16] and Annexure EL-7.

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

    30. Section 60 of the Act provides:

    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.

    31. It is not necessary to show under section 60 that the respective trade marks are deceptively similar although such a finding can be relevant in determining the likelihood of deception or confusion.

    32.   Reputation is to be assessed according to the test set out in McCormick & Company Inc v McCormick (“McCormick”)[5] by Kenny J at [81] – [82]:

    [5] (2000) 51 IPR 102

    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”.

    Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public’s mistakenly attributing a business connection between the two or attributing her product to the company?

    33.   Further, at [86], Kenny J said:

    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.

21. The Opponent has provided evidence of extensive international sales and promotions of its CHOCOLATE DIAMONDS trade mark, particularly in the United States. The Opponent also provided a redacted list of some 220 certificates of authenticity sent to various Australian addresses following sales of the Opponent’s goods to Australian residents who purchased goods in stores in the United States. Many of the addresses are from the same suburb, but redactions conceal  whether or not the certificates were sent to the same or different addresses in such suburbs, or whether the certificates  are for one or more items of jewellery.

22. Mr Cooke submitted that this was significant in establishing a reputation in Australia, because Australians, particularly affluent Australians likely to buy diamonds, travel to the United States and other destinations where the CHOCOLATE DIAMONDS goods are sold. As well as the certificates of authenticity issued, Mr Cooke submitted that one could infer that the number of Australians who would have been exposed to the Opponent’s products and be aware of the Opponent’s CHOCOLATE DIAMONDS trade mark is many times the number of certificates of authenticity issued.

23. No examples of certificates of authenticity were provided in the Opponent’s evidence.

24. The Opponent also points to evidence of its exhibits at numerous international trade shows that have been attended by a number of Australia’s well known jewellers.

25. LeVian 1 also states that a sub-brand of the Opponent, Carlo Viani, advertised and sold ‘Carlo Viani chocolate diamonds’ on the Australian TVSN television channel in the period 2007 to 2009. The Opponent was unable to exhibit material showing how the products were shown on the TVSN.

26. Mr Knowles, for the Applicant, referred to the standard authorities for reputation, including McCormick and Conagra Inc v McCain Foods (Aust) Pty Ltd [6](“Conagra”). He questioned whether the exposure to travelers of foreign brands could equate to reputation especially where the brand was descriptive rather than distinctive. Mr Knowles also submitted that the exposure of the CHOCOLATE DIAMONDS brand to a small number of tourists and a small number of ‘industry insiders’ within the relevant market was insufficient to establish a reputational basis under section 60.

    [6] (1992) 23 IPR 193

27. I note that the majority of examples of use of the CHOCOLATE DIAMONDS trade mark has been in conjunction with or in close proximity to the LE VIAN Chocolatier or CARLO VIANI brands, in particular the former. Notwithstanding the overseas trade mark registrations for CHOCOLATE DIAMONDS and the use of the United States trade mark registration symbol, the use of the words seem to me to be purely descriptive of the colour and nature of the goods with the badge of origin being LE VIAN Chocolatier or CARLO VIANI.

28. I was referred to, and concur with, Hearing Officer Thompson’s remarks in Bendigo Cemeteries Trust[7] regarding the use of descriptive material in the presence of more distinctive elements:

    Further, where the business name has very low inherent adaptation to distinguish, and it is being used close to a distinctive trade mark such as that shown at paragraph 18, above, that name may be doomed to shuffle forever in the shadow of that distinctive trade mark as a kind of limping trade mark of the ilk referred to by Jacob J in Philips Electronics NV v Remington Consumer Products (1997) 40 IPR 279.

    [7] [2014] ATMO 82 at [20]

29. Taking into account the limited use and low inherent distinctiveness of the Opponent’s CHOCOLATE DIAMONDS trade mark, I am not satisfied that the Opponent has established the requisite reputation required for section 60 amongst consumers of the relevant goods at the Priority Date. Further, any deception or confusion would be likely to arise from the descriptive nature of the words, rather than as a result of reputation. Therefore, the Opponent has not established the ground of opposition pursuant to section 60 of the Act.

    Section 42(b): Trade mark’s use contrary to law

30. Section 42 of the Act relevantly provides:

    42 Trade mark scandalous or its use contrary to law

    An application for the registration of a trade mark must be rejected if:

    […]

    (b)         its use would be contrary to law.

31. The Opponent nominated section 18 of the Australian Consumer Law (‘ACL’), which is contravened when a party engages in conduct in trade or commerce that is misleading or deceptive, or is likely to mislead or deceive customers. There must be a ‘real but not remote chance or possibility’ of misleading or deceiving regardless of whether it is less or more than 50 percent.[8]

    [8] Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25 at 34, per Bowen CJ, Lockhart and Fitzgerald JJ.

32. The Opponent also nominated a breach of section 29(1)(g), that the Applicant’s use of the words CHOCOLATE DIAMONDS would be a false representation that the Applicant’s goods have the sponsorship or approval of the Opponent.

33. However, in the circumstances of this matter, where the Opponent has not established that the use of the trade mark would be likely to deceive or cause confusion in terms of section 60, it follows that neither can it establish that the use of the trade mark would ‘mislead or deceive’ under the ACL (or its common law equivalent), which is a higher standard. In Parkdale Custom Built Furniture Pty. Limited v Puxu Pty Limited[9], Gibbs C.J. said at [8]:

    The words of s. 52 require the court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive . . . . . The words “likely to mislead or deceive”, which were inserted by amendment in 1977, add little to the section; at most they make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone. In McWilliams v. McDonalds [1980] FCA 159; (1980) 33 A.L.R. 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 C.L.R. 592, a decision on the Trade Marks  Act 1905 (Cth) as amended, is distinguishable: I need not add to what their Honours said on this subject (33 A.L.R.) at 397-8 and 412-3. I agree too with those learned judges that the court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive, and that evidence that members of the public have actually been misled is not conclusive: see at 399-400 and 413-4. I would add that evidence that members of the public were misled, not by any conduct of the defendant, but by other circumstances for which the defendant was not responsible, would be quite irrelevant.”

    [9] [1982] HCA 44; (1982) 149 CLR 191.

34. In the same case Mason J. said at [30]:

    “. . . the onus is on the plaintiff to show that the conduct is likely to mislead or deceive. Therefore conduct which merely causes some uncertainty in the minds of relevant members of the public does not breach s. 52.”

35. I am not satisfied that this ground of opposition, under section 42(b) of the Act, has been established.

    Section 62A: Trade mark application made in bad faith

36. Section 62A provides:

    The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

37. In DC Comics v Cheqout Pty Ltd[10] (DC Comics) at [62], Bennett J summarised relevant principles established in UK authorities and set out in Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2)[11] (Fry (No 2)), that would be relevant in considering whether an application has been made in breach of s 62A, including:

    Bad faith is a combined test that involves subjective and objective elements. The subjective element refers to the knowledge of the relevant time of making the application. The objective element requires the decision-maker to decide whether, the light of that knowledge, the relevant person’s behaviour fell short of acceptable commercial standards.

    The question is whether conduct falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area. It is whether the knowledge of the applicant was such that the decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.

    [10] (2013) 101 IPR 334

    [11] (2012) 94 IPR 551

38. Mr Cooke submitted that although the Managing Director of the Applicant (in Bolton) does not give any evidence about whether or not he was aware of the Opponent’s CHOCOLATE DIAMONDS mark before filing the application, given the extent of the Opponent’s advertising and promotion of its products, it would be extremely improbable that Mr Bolton would not have been aware of the Opponent and its mark.

1. Mr Cook further submitted that the choice of script used by the Applicant on the words ‘chocolate’ and ‘diamonds’ in its trade mark device and in advertising (for example see Bolton Exhibit 2) are virtually identical to the Opponent (for example Le Vian 1, Exhibits EL-10 and EL-12). Additionally, the Applicant has used chocolate and chocolate‑dipped strawberries in advertising (see Bolton Exhibit 1 and Le Vian 2 Exhibit B) in a similar way to the Opponent (for example Le Vian 1 Exhibit EL-10 and Le Vian 2 Exhibit E).

2. Taken as a whole, the Applicant’s trade mark comprises a map of Australia, the words ‘Australian Chocolate Diamonds by Eternity Diamonds’ and the representation of two diamonds. The trade mark clearly suggests Australia as the place of origin of both the Applicant and its goods. The Applicant has declared that these attributes were included to offer ‘clear, concise information about the product it represents.”[12] There can be no bad faith in selecting descriptive words for the sake of their ordinary meanings and even if the Applicant has knowledge of the Opponent, the use of the same descriptive words does not necessarily indicate bad faith.[13]

   [12] Bolton, at [16]

   [13] Barossa Valley Estate Pty Ltd v Australian Vintage Limited [2015] ATMO 70 at [67]

3. The use of a fancy script in advertising luxury items such as jewelry is not surprising and the use of chocolate and chocolate-dipped strawberries is also not surprising in marketing of luxury goods and the idea of indulgence. I do not consider that these marketing themes evidence any bad faith on the part of the Applicant.

4. I am not satisfied that this ground of opposition, under section 62A of the Act, has been established.

   Decision

5. Subsection 55(1) of the Act requires me to decide either to refuse to register the trade mark, or 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.

6. The Opponent has not established any of its grounds of opposition.

7. The trade mark applications may then proceed to registration one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued.

   Costs

   59.   Both parties sought their costs. Costs may follow the event and I award costs against the Opponent at the scale set out in the Regulations.

   Jock McDonagh

   Hearings Officer

   Trade Marks Hearings

   15 July 2016