Lidl Stiftung & Co Kg v Aquent LLC - [2010] ATMO 21

TRADE MARKS ACT 1995

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

Re:Opposition by Lidl Stiftung & Co KG to registration of trade mark application 1200990(9) (International Registration Designating Australia No 934438) - LITL - filed in the name of Aquent LLC.

Delegate:

Jock McDonagh

Representation:

Opponent: Celia Davies of Freehills Patent & Trade Mark Attorneys

Holder: Luke Merrick of Counsel, instructed by Griffith Hack Patent & Trade Mark Attorneys

Decision:

2010 ATMO 21

Request to adjourn hearing refused

Reg. 17A.29 opposition – Ground under section 44 established – trade marks deceptively similar to opponent’s LIDL trade marks – protection refused. Costs ordered against holder.

Background

Aquent LLC, a company based in the United States of America (“the holder”) requested protection in Australia for the following international registration designating Australia (“IRDA”):

Application number: 1200990 (IRDA No 934438)

Priority date: 24 August 2007

Advertised accepted: 1 November 2007
Goods:Class 9: Computers; mobile computers; notebook computers; laptop computers
Trade mark: LITL

Section 189A of the Trade Marks Act 1995 (“the Act”) governs the consideration of IRDAs. This section makes provisions for the regulations to “provide for such matters as are necessary to enable the performance of the obligations of Australia, or to obtain for Australia any advantage or benefit, under the Madrid Protocol.”
Notice of opposition to the protection of an IRDA is governed by the provisions of regulation 17A.29 of the Trade Marks Regulations 1995 (“the regulations”). Regulation 17A.31(3) applies the grounds of opposition under sections 58 to 61 and section 62A of the Act to oppositions to IRDA.
On 31 January 2008, Lidl Stiftung & Co KG, a company based in Germany (“the opponent”), filed a Notice of Opposition (“the notice”). After requesting and being granted an extension of time for the purpose, the opponent filed its evidence in support of the opposition on 29 July 2008. It comprised a declaration by Celia Jane Davies dated 29 July 2008, with two exhibits.
Following some apparent confusion as to the opponent’s intention to file any further evidence in support, the holder sought and was granted an extension of time to file evidence in answer. The evidence in answer was filed on 6 September 2009 and comprised a declaration by John H Chuang dated 8 July 2009.
The matter came before me, as a delegate of the Registrar of Trade Marks, for hearing in Melbourne on 24 November 2009. The opponent was represented by Celia Davies of Freehills Patent & Trade Mark Attorneys. The holder was represented by Luke Merrick of Counsel, instructed by Griffith Hack Patent & Trade Mark Attorneys.
At the hearing, counsel for the holder sought an adjournment to allow for this matter to be heard at the same time as a future removal opposition hearing with regard to an application to remove the opponent’s trade marks cited in this matter. The opponent opposed the holder’s request for adjournment.
I determined that I should hear submissions from the parties in respect of the adjournment issue, and to allow the opponent one month to file written submissions.
I further determined that I should hear submissions from the parties on the opposition matter, to allow me to decide the matter in the event that I did not allow the adjournment.
Counsel for the holder also sought leave to adduce evidence, being a declaration made 20 November 2009 and exhibiting a Wikipedia entry relating to the opponent’s operation, name and German pronunciation of the opponent’s name. I declined to grant leave, on the basis that the evidence was not relevant to the limited ground to be pursued at this hearing.

Request for Adjournment

The holder filed applications for the removal of a number of the opponent’s trade marks, including those cited in its section 44 ground of opposition in these proceedings. The filing date was 23 November 2009, the day before the hearing of the subject opposition.
Counsel for the holder submitted that I had the discretion to adjourn proceedings pursuant to regulations 5.16(1) and (3) and 21.15 (9) and (10) of the Regulations, being regulations pertaining to directions generally and adjournment of hearings.
Mr Merrick submitted that this discretion should take into account the recent High Court decision Aon Risk Services Australia Ltd v Australian National University (2009) 258 ALR 14 at paragraph 102. Counsel submitted that this was authority for the proposition that the proper administration of justice required proceedings to avoid unnecessary costs and delays for the parties and multiplicity of proceedings was to be avoided where the same parties were involved in the same subject matter.
Mr Merrick distinguished the finding of Finkelstein J in Cadbury UK Ltd v Registrar of Trade Marks [2008] FCA 1126 (1 August 2008) that “the suspension of the opposition proceedings for an indefinite period amounted to a denial of justice and a refusal by the delegate to perform her duty to hear and determine those proceedings” (at paragraph 16). Counsel suggested that the suspension of opposition proceedings in order to await the outcome of separate Federal Court proceedings was a quite different situation than this case.
In essence, counsel for the holder submitted, it would be a grave injustice if protection was refused on the basis of trade marks that were later removed from the Register for non-use. Further, the adjournment would not prejudice either party.
Ms Davies, for the opponent, submitted that the holder’s position was not supported by the Federal Court’s decision in E&J Gallo Winery v Lion Nathan Australia Pty Ltd [2009] FCAFC 27, which establishes that trade mark removal actions, if successful, result in an order to remove the registrations that takes effect as at the date of the order. Thus, at the moment, and as at the relevant date, the opponent’s registrations were and remain in full force and effect. Ms Davies stated that the opposition should be determined on existing rights.
Having considered the submissions from both parties, I am not persuaded that I should exercise my discretion to adjourn the proceedings until such time as the removal proceedings were to be heard.
While not necessarily amounting to an abuse of process, I cannot help but conclude that there is a tactical aspect to the timing of the removal applications that are sought to require an adjournment to be granted. The filing of the applications the day before the hearing of the matter bears the hallmarks of an ambush.
While there is an internal logic to the proposition that an injustice would arise from the removal for non-use of trade marks cited to prevent protection of the IRDA, the situation is rather more complex.
As at the date of the hearing, and at the time of writing this decision, there is no indication of when the removal opposition hearing is likely to be. At best, with no extensions of time to perform the various tasks, the hearing is unlikely to be set down before November 2010.
The ultimate removal for non-use of the opponent’s trade marks, while possible, is not certain. Unless and until the matter is determined by a delegate of the Registrar, it would be improper of me to speculate on the outcome of the proceedings.
Furthermore, as Ms Davies has pointed out, so long as the opponent’s trade marks remain on the Register, the opponent is entitled to exercise all of the rights that derive from registration. To suspend such rights for an uncertain period of time to await an uncertain result would create the same sort of injustice referred to by Finkelstein J in Cadbury UK Ltd v Registrar of Trade Marks (supra).
In Aon Risk Services Australia Ltd v Australian National University (supra), the parties and the subject matter were the same. Here, while the parties may be the same, the subject matter is different. The current proceedings relate to the eligibility of the holder’s international registration to be protected in Australia as at the priority date, 24 August 2007. The possible removal proceedings relate to the opponent’s use or otherwise of its trade marks in Australia, with possible extinguishment of the opponent’s trade mark rights to be effective only after such hearing.
I have decided not to direct that the proceedings be adjourned. Therefore, I shall continue to consider the evidence and submissions with regard to the grounds of opposition.

Notice of opposition, grounds of opposition pursued and onus

The notice canvassed most of the grounds of opposition allowable under the Act. However, at the hearing, Ms Davies advised that the opponent would only be pursuing grounds under the provisions of section 44 of the Act. For completeness, I note that none of the other grounds claimed on the notice has been established.
The onus of establishing any ground of opposition rests with the opponent. The ground need only be established on the balance of probabilities: Pfizer Products Inc v Karam (2006) 70 IPR 599, per Gyles J at [6] to [26].
The registrations relied upon by the opponent in support of the section 44 ground are as follows:

Registration number	Trade Mark	Classes	Relevant Goods	Priority Date
844989	1, 2, 3, 4, 5, 7, 8, 9, 11, 13, 14, 16, 18, 21, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 39, 41, 42	Class 9: Electric apparatus and instruments in this class; apparatus for the recording, transmission and reproduction of sound and images; magnetic data carriers, compact discs and diskettes, music cassettes, recording discs and diskettes; data carriers with information and/or sound and/image; calculating machines, data processing equipment and computers; computer peripheral equipment and firmware; parts and accessories in this class for the aforesaid goods	3.08.05
844990	LIDL	As above	As above	3.08.05
1096698	As above	Class 9 Electric apparatus and instruments included in this class; apparatus for recording, transmission and reproduction of sound and images; magnetic data carriers, compact discs, music cassettes, phonograph records; data carriers with information and/or sound and/image; calculating machines, data processing equipment and computers	3.08.05
1097846	LIDL	As above	As for 1096698	3.08.05

The relevant applicable legislation for the section 44 ground is as follows:

Identical etc. trade marks

44.(1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of goods (applicant's goods) must be rejected if:
(a) the applicant's trade mark is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar goods or closely related services; or
(ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b) the priority date for the registration of the applicant's trade mark in respect of the applicant's goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

The definition of the term deceptive similarity is provided in the Act as follows:

Definition of deceptively similar

10. For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

There was no dispute that the trade marks cited by the opponent have earlier priority dates and are registered in respect of similar goods. The opponent did not argue that the marks are substantially identical. The key issue in this ground is thus whether or not the holder’s mark is deceptively similar to one or more of the cited marks.
Both parties were in general agreement that the underlying relevant authorities included Jafferjee v Scarlett (1937) 57 CLR 115, De Cordova v Vick Chemical Co. (1951) RPC 271, Re Application by Pianotist Co. Ltd. (1906) 23 RPC 774, Shell Co of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407 and Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411.
Ms Davies, for the opponent, introduced her submissions by stating that the trade mark examiner’s work file had been obtained pursuant to a Freedom of Information request and was exhibited in the Davies declaration.
This initial examination did not cite the opponents trade marks. Ms Davies submitted that the search strategy employed by the examiner was flawed in that all searches included the letters L and T. Simply put, the searches did not involve variations on the word that did not contain the prefix “lit”.
This strategy made it impossible to identify the opponent’s trade marks. Ms Davies gave examples of what she submitted were more cogent searches. Each involved the use of a “wild card” search using a “wild card” for the letter “t”, or the prefix “li”.
Ms Davies accepted that, given the price of computers, the relevant consumer would exercise greater than usual caution for this reason. However, the market was not a specialised one so the relevant consumer might well be an inexpert domestic purchaser, albeit exercising caution.
Ms Davies relied on the decision of Hearing Officer Iain Thompson, in Glaxo Wellcome Australia Ltd v Bukwang Pharm Co. Ltd [2008] ATMO 12 (1 February 2008), (“Glaxo”), in which REBOVIR and REVOVIR were held to be deceptively similar to RETROVIR, for the approach to be taken in the case of trade marks sharing identical prefixes and suffixes:
identical beginnings and terminations are likely to contribute to the way the trade marks in question are recognized, remembered and dealt with … people tend to recognize words from the pattern or outline that they form [at 32] … visual confusion of the opposed trade marks is a probability because of the … similarities in the stems and endings of the trade marks in question leading to a mistaken recognition of the trade marks [at 33].
Deceptive similarity, submitted Ms Davies, was all the more likely where the relevant marks are short, invented words, having similar length, and number of syllables. By invented words, Ms Davies meant words not in a dictionary and included LIDL, which is the surname of the opponent’s founder, Ludwig Lidl.
Reference was also made to the decision of Hearing Officer Frances Aarnio in Carl Zeiss AG v Zhang Yimin [2009] ATMO 69 (31 August 2009) (which found SKYPAL and SKYPOL to be deceptively similar) with the comment that the trade marks in issue here are more similar than SKYPOL and SKYPAL.
Ms Davies also gave detailed submissions concerning the phonetic and conceptual similarities of the marks. I shall refer to these later.
Counsel for the holder submitted that the opponent required particularly cogent evidence to establish the section 44 ground of opposition, referring to Shanahan’s Australian Law of Trade Marks and Passing Off, 4^th Edition, at paragraph 50.2155. I note that this reference states that this claimed requirement arises from the presumption that section 44 would have been considered during the initial trade mark examination.
This submission has reduced weight given the opponent’s evidence relating to the search strategy actually used in the initial examination.
Mr Merrick contended that the opponent had elected to file no evidence addressing the substantial identity or deceptive similarity issue. Further, he submitted, the opponent had elected not to provide any evidence about how it uses or intends to use the opposed trade mark in Australia.
Counsel for the holder introduced his comparison of the competing trade marks with the proposition that the holder’s goods were various types of computers. Purchase of such goods was not made on impulse, rather it is reasonable to assume that buyers would take care in assessing potential purchases and compare brands carefully. Mr Merrick submitted that this would reduce the likelihood of consumers being confused or deceived by the holder’s use of its mark.
Mr Merrick considered the device marks separately from the word mark and also considered the black and white device mark separately from the colour device. However, for the sake of relative brevity, I shall summarize the submissions regarding the devices together.
Counsel for the holder submitted that the graphic elements (including colours, as applicable) were essential features of the device marks. Apart from a word starting and ending with the letter “L”, he submitted, there was little correlation with the holder’s trade mark.
Mr Merrick argued that LITL and LIDL were both visually and phonetically different, essentially due to the relevant differences in the letters T and D. His proposed submissions relating to the German pronunciation were not admitted.
Having regard to the evidence and submissions, I am satisfied that the holder’s LITL trade mark is deceptively similar to trade marks 844990 ands 1097846, both being the word LIDL. For the reasons cited by Hearing Officer Thompson in Glaxo, I consider there is a real and tangible danger of confusion.
In the Australian marketplace, there is a high likelihood that the holder’s mark would be pronounced the same as the opponent’s. While a side by side comparison of the marks might highlight the difference between the “T” and “D”, that is not the test for deceptive similarity. That test is enunciated in Shell Co of Australia Limited v Esso Standard Oil (Australia) Limited (supra) and relates to the imperfect recollection of persons of ordinary intelligence and memory.
As Ms Davies submitted at the hearing, neither LIDL nor LITL is an accepted English word that appears in a dictionary. An Australian consumer would need to approach pronunciation by reference to a known word that is similar to LIDL. This is likely to be “lid”. Similarly, the same exercise can be conducted on LITL, resulting in “lit”. Pronunciation of either word would involve the three-letter English word being followed by “l”, as in “little”.
The phonetic and conceptual similarities of the word marks discussed above also apply to the opponent’s device marks, registrations 844989 and 1096698. However, having determined the word trade marks to be deceptively similar I have no further need to consider the device marks.
I am satisfied that the section 44 ground has been established by the opponent.

Decision

Regulation 17A.34(1) provides:
17A.34 (1) Unless the opposition proceedings are discontinued or dismissed, the Registrar must decide:
(a) to refuse protection in respect of all of the goods or services listed in the IRDA; or
(b) to extend protection in respect of some or all of the goods or services listed in the IRDA (with or without conditions or limitations);
having regard to the extent (if any) to which any ground on which the IRDA was opposed has been established.
The opponent having established the ground of opposition under section 44, I refuse to extend protection to Australian trade mark application 1200990 (IRDA No 934438) in respect of all goods listed in this IRDA. The International Bureau will be notified of this decision as soon as practicable after the appeal period has ended, in accordance with regulation 17A.34 (2).

Costs

The parties sought their costs. As a general rule, costs follow the event; therefore, I award costs against the holder according to the official scale.

Jock McDonagh

Hearing Officer

Trade Marks Hearings

16 March 2010