Lifestyle Equities CV v Continental Shelf 128 Limited

[2019] ATMO 38

TRADE MARKS ACT 1995

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

Re:Opposition by Lifestyle Equities CV to registration of trade mark application 1805051 (3, 18, 25) - SANTA MONICA POLO CLUB & Polo Players Device - in the name of Continental Shelf 128 Limited.

Delegate:	Iain Campbell Thompson
Representation:	Opponent: Swaab Attorneys Applicant: Collison & Co
Decision:	2019 ATMO 38 Trade Marks Act 1995 Section 52 opposition - grounds under sections 44, 58A, 60, 42, and 62A; trade marks of parties dissimilar, not established that application was made in bad faith; grounds not established.

Background

1. In these proceedings under section 52 of the Trade Marks Act 1995 (‘the Act’) Continental Shelf 128 Limited (‘the Applicant’) has applied to register the trade mark details of which appear below:

Application No:         1805051

Priority Date:             26 Oct 2016

Goods:Class 3: Cosmetics; toiletries; make-up; moisturising preparations; perfume; eau de toilette; eau de cologne; aftershave; aftershave preparations; antiperspirant; deodorants; soap; shampoo; shampoo-conditioners; hair conditioner; shower preparations; shower gels, creams, foams; bath preparations; bath gels, oils, foams, creams, lotions; essential oils; baby oil; massage oil; aromatherapy oil; hair oil; hair care preparations; skin care preparations; sunscreen preparations; sun tanning preparations; sunblock; after-sun lotions; tooth care preparations; tooth paste, tooth polish, tooth gel, tooth powder; shaving preparations; shaving balms, creams, foam, gel, mousse; nail care preparations; depilatory preparations; eye gels, lotions, cream; cotton for cosmetic purposes; cotton wool buds and ball for cosmetic purposes

Class 18: Attache cases; backpacks; bags, baggage; billfolds; brief cases; business cases, business card cases; canes; carryalls; carrying cases; coin holders; cosmetic bags and cases, sold empty; credit card cases and holders; driving licence cases; folio cases; haversacks; hipsacks; holdalls; key cases, key holders, key pouches, key wallets; knapsacks; leather and imitation leather; leather straps; luggage; covers, straps, tags and label holders, all for luggage; make-up boxes and cases; notecases; overnight cases; parasols, parasol covers; portmanteaux; pouches; purses; reins; rucksacks; saddlery; shoulder belts; slings for carrying babies and or infants; suit carriers; suitcases; travelling trunks; umbrellas; umbrella bags and covers; valises; walking sticks; wallets

Class 25: Articles of outerclothing; articles of underclothing; footwear; headgear; coats; jackets; socks; neckties; scarves; shawls; gloves; mittens; muffs

(‘the Goods’)
Trade Mark:               

(‘the Trade Mark’)

2. The Trade Mark was examined as required by section 31 of the Act and advertised as accepted for possible registration on 16 March 2017 in the Australian Official Journal of Trade Marks.

3.     On 11 May 2017, Lifestyle Equities CV (‘the Opponent’) filed a Notice of Intention to Oppose the registration of the Trade Mark followed, on 9 June 2017 by a Statement of Grounds and Particulars which detailed grounds under sections 44, 58A, 60, 42, and 62A of the Act.

4.     On 28 July 2017, the Applicant filed a Notice of Intention to Defend.

5.     On 6 November 2017, the Opponent filed its Evidence in Support of the Opposition which consists of a declaration by Daniel Haddad, Legal Representative of the Opponent, made on 2 November 2017 with exhibits EH-1 to EH-16.

6.     The Applicant did not file Evidence in Answer and the Opponent has not filed Evidence in Reply.

7.     Both parties have been informed of their right to be heard or to make written submissions; neither party requested to be heard and the Opponent has filed written submissions by its legal representatives, Swaab Attorneys.

Onus and Relevant Date

8.     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]

[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].

9.     The relevant date (‘the Relevant Date’) at which the grounds must be considered is the filing date[2] of the opposed application and I note that where sections 44 and 60 specify the “priority date” that is here the same as the filing date.

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

10. I further note that in its written submissions the Opponent states that it does not rely on the ground under section 58A of the Act.

Evidence

11.     The Opponent has registered the following trade marks in Australia:

Registration No:         523531

Priority Date:             20 November 1989

Goods:Class 25: Clothing, footwear, headgear and all other class 25 goods; but excluding clothing, footwear and headgear designed specifically for polo players

Trade Mark:               

Endorsements:           Registration of this trade mark shall give no right to the exclusive use of the words BEVERLY HILLS

Registration No:         1442006

IR No:  1085110
Priority Date:             1 October 2010

Goods:Class 3: Polishing, scouring and abrasive preparations; hair lotions; expressly excluding toothpaste, mouthwash and products for oral and dental care and hygiene

Class 9: Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments for the conduction, distribution, conversion, storage, regulation and management of electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; automatic vending machines and mechanisms for coin-operated apparatus; cash registers, calculating machines, data processing equipment and computers; fire-extinguishing apparatus

Class 14: Precious metals and their alloys, not included in other classes; precious stones

Class 18: Leather and imitations of leather, and goods made of these materials and not included in other classes; animal skins, hides; trunks and travelling bags; umbrellas, parasols and walking sticks; whips, harness and saddlery

Trade Mark:               

Registration No:         1638251

Priority Date:             31 July 2014

Goods/Services:         Class 3: Fragrance; cosmetics; body care products; soaps; essential oils; hair lotions

Trade Mark:               

(Collectively, ‘the Opponent’s Trade Mark’)

12.     Mr Haddad asserts use by the Opponent or under its aegis of the Opponent’s Trade Mark in Australia in relation to Perfume and cosmetics, clothing, footwear and headgear and leather and bags.  The word “cosmetic” is, however, defined by the Macquarie Dictionary as meaning (in this context) “a preparation for beautifying the complexion, skin, etc.”  There is no evidence that the Opponent’s Trade Mark has been used on “cosmetics” but rather on men’s and women’s perfumery, scents, etc – I will therefore accept that the Opponent has used the Opponent’s Trade Mark in Australia on Perfume, clothing, footwear and headgear, and leather goods and bags (‘the Opponent’s Goods’).

13.     The Opponent does not have a bricks and mortar presence in Australia and sells its goods primarily through other traders’ websites and distributers.  The Opponent does have a significant physical presence in prestigious shopping malls in various countries other than Australia.

14.     Mr Haddad provides annual sales revenues for the years 2010 to 2016 for the Opponent’s Goods sold in Australia under the Opponent’s Trade Mark and, in contrast with its overseas revenue, I would characterise these as being modest and as being markedly less than one would expect from a single boutique retail outlet in a suburban shopping mall.  The quantum of expenditure on advertising and promotion of goods sold under the Opponent’s Trade Mark in Australia is not given by Mr Haddad but is estimated at 5% of revenue and, whilst overseas advertising and promotional material is exhibited to Mr Haddad’s declaration, it is not clear to what extent, if any, these materials have been viewed by Australians.  There is also exhibited to Mr Haddad’s declaration a breakdown of Australian visitors to the Opponent’s website which shows that, in the period 28 June 2016 to 28 September 2017, 2041 people within Australia visited the Opponent’s website – a rate that equates to slightly less than four visits to the website by Australians each day.

15.     Mr Haddad also asserts a course of dealings between the parties which culminated in a “Without Prejudice” letter from the Applicant to the Opponent concerning, apparently, the use of a trade mark in the United Kingdom.  In the circumstances of these proceedings, I do not consider that it is appropriate for me to view, discuss, or rely on the contents of the “Without Prejudice” letter in my considerations of this matter without express consent of the originator of that letter.  There is no such consent before the Registrar.  However, material other than the “Without Prejudice” letter shows that the course of dealings in the United Kingdom between the parties concerned the use by the Applicant of the trade mark hereunder:

16.     The above trade mark[3] is not the Trade Mark which is here under consideration and so the contents of the “Without Prejudice” letter, whatever they may be, are not relevant to these proceedings.

Section 44

[3] The image is taken from a “cease and desist” letter from the Opponent to the Applicant which is not marked “Without Prejudice”.

Statement of Grounds and Particulars

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

The trade mark is substantially identical with or deceptively similar to a trade mark with an earlier priority date registered or the subject of an application for registration by another person in respect of similar goods or services or closely related goods or services.

18.     The Opponent then lists the trade marks which appear at paragraph [11], above.

Section 44 - Framework

19. Section 44 of the Act relevantly provides:

44Identical etc. trade marks

(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.

Note 1:For deceptively similar see section 10.

Note 2:For similar goods see subsection 14(1).

Note 3:For priority date see section 12.

Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

20.     The Opponent does not argue that the trade marks under consideration are substantially identical.  Therefore, to found the ground under subsection 44(1) the Opponent must establish each of the following:

That the Opponent’s Trade Marks have earlier priority dates than that of the Trade Mark; (‘the First Requirement’) and that,

the goods specified on the Opponent’s Trade Marks’ registrations are similar goods to the Goods; (‘the Second Requirement’) and that,

the Trade Mark is deceptively similar to the Opponent’s Trade Marks (‘the Third Requirement’).

Discussion

21.     The registrations upon which the Opponent relies have earlier priority dates than that of the Trade Mark – the First Requirement is thus satisfied.

22.     Subsection 14(1) provides:

14Definition of similar goods and similar services

(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.

23. Section 10 of the Act provides:

10Definition of deceptively similar

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.

24. In respect of the expression “goods of the same description” within section 14 of the Act, in E & J Gallo Winery v Lion Nathan Australia Pty Ltd Moore, Edmonds and Gilmour JJ stated:[4]

The expression “goods of the same description” is a term of art which was found in the legislative predecessors to the TM Act. There is Full Court authority, MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236, that authorities predating the enactment of the TM Act in 1995 concerning the meaning and effect of the expression in a different context are apt to be applied in considering the meaning and effect of the expression in s 120(2). The fact that the Full Court was considering the expression “services of the same description” rather than “goods of the same description “does not appear to us to be a material difference. In this context, the Full Court referred to the judgment of the High Court in Southern Cross at 606. Considerations referred to in the passage from the judgment of the High Court include the nature and characteristics of the goods, their origin, their purpose, whether they are usually produced by one and the same manufacturer or distributed by the same wholesale houses, whether they are sold in the same shops over the same counters, during the same seasons and to the same class or classes of customers and whether, by those engaged in the manufacture or distribution, they are regarded as belonging to the same trade.

[4] [2009] FCAFC 27; (2009) 175 FCR 386; [2009] AIPC 92-337 at [70].

25.     And in Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd Burchett J stated:[5]

In my opinion, the application of a principle so broadly stated requires some concentration upon the object which s. 23(2) exists to serve. That object seems plainly to be the avoidance of confusion and deception in the market place, which would be likely to arise should a mark become available for use by two or more different companies, which are unrelated, upon goods of the same description. From that point of view, the expression “goods of the same description” is generally to be understood in such a sense that, if two different items are held not to fall within the expression, their sale under the same mark by different companies is not likely to lead to confusion or deception. That approach would seem to me to accord with the common sense business view recommended by Lord Evershed. In its application to the present case, it would place weight on the fact that sheets and towels are both sold in the manchester goods sections of stores and fall within the generic description of manchester goods. I think I would be entitled to take judicial notice of this situation, but there is no need, since the evidence makes it abundantly clear.

[5] [1993] FCA 203; (1993) 42 FCR 227; 114 ALR 157; 26 IPR 246; [1993] AIPC 91-007 at [27].

26.     The goods of the parties obviously embrace the same goods and/or contain “goods of the same description” in Classes 3, 18 and 25.  The products “hair lotions” within Class 3 of the Opponent’s registration 1442006 are, as a minimum, “goods of the same description” as the Applicant’s “hair oil; hair care preparations;” within the Goods but not to the other goods in respect of which 1442006 is registered.

27.     To that degree, the goods of the parties are similar goods and the Second Requirement is established to that extent.

28.     As to the Third Requirement, deceptive similarity is assessed according to the test in Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd where Windeyer J stated:

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 the familiar one of trade mark law. It 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 defendant’s television exhibitions. To quote Lord Radcliffe again: “The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him . . . . It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole”: de Cordova v. Vick Chemical Co (1951) 68 RPC, at p 106. And in Australian Woollen Mills Ltd v. F.S. Walton & Co. Ltd. [1937] HCA 51; (1937) 58 CLR 641 Dixon and McTiernan JJ. said: “In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same” (1937) 58 CLR, at p 658.

[…]

The deceptiveness that is contemplated must result from similarity; but the likelihood of deception must be judged not by the degree of similarity alone, but by the effect of that similarity in all the circumstances.

29.     In Millennium & Copthorne International Limited v Kingsgate Hotel Group Pty Ltd[6] Jacobson J summarised the principles of deceptive similarity with reference to the authorities as follows:

[6] [2012] FCA 1022, [38]-[46].

Without seeking to reformulate the various statements of principle stated in the Full Court authorities, it is sufficient for present purposes to identify the critical elements which seem to me to inform the issue of deceptive similarity in the present case. There are nine elements.

First, the judgment of likelihood of deception is a practical one. It requires an assessment of the effect of the challenged mark on the minds of potential customers: Woolworths[7] at [49]; Australian Woollen Mills[8] at 658.

Second, the question of deceptive similarity is not to be decided by a side-by-side comparison. It is to be determined by a comparison of the impression based on recollection of the opponent’s mark that persons of ordinary intelligence and memory would have, and the impression that those persons would get from the opposed trade mark: Crazy Ron’s[9] at [73]; Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407 at 415 per Windeyer J.

Third, allowance must be made for imperfect recollection: Crazy Ron’s at [74].

Fourth, the effect of the spoken description must be considered: Woolworths at [49]; Crazy Ron’s at [75]; Australian Woollen Mills at 658.

Fifth, it is necessary to show a real tangible danger of deception or confusion: Woolworths at [43] and [50]; Crazy Ron’s at [76]; Southern Cross Refrigerating[10] at 594 – 595.

Sixth, 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 the two products come from the same source: Woolworths at [50]; Southern Cross Refrigerating Co at 595. This test sets a lower threshold than that which is required to establish that conduct is likely to mislead or deceive under s 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth): see McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty Ltd [1980] FCA 159; (1980) 33 ALR 394 at 398 per Smithers J.

Seventh, all surrounding circumstances must be taken into consideration. The circumstances include those in which the marks will be used, and in which the goods or services will be bought and sold, as well as the character of the probable acquirers of the goods and services: Woolworths at [50]; Crazy Ron’s at [86] – [89]; Southern Cross Refrigerating at 595.

Eighth, the question of whether there is a likelihood of confusion is not to be answered by reference to the manner in which a party has used the mark, but by reference to what an applicant can do. That is to say, the use to which it can properly put the mark if registration is obtained: Woolworths at [50]; Berlei Hestia Industries Ltd v The Bali Company Inc [1973] HCA 43; (1973) 129 CLR 353 at 362 per Mason J.

Ninth, if a registered trade mark includes words which can be regarded as an ‘essential feature’ of the mark, another mark that incorporates those words may cause a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of those words: Crazy Ron’s at [79]. However, care must be taken to not too readily characterise words in a composite trade mark as an ‘essential feature’ because to do so may effectively convert a composite mark into something different: Crazy Ron’s at [100].

[7] Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020.

[8] Australian Woollen Mills Ltd v FS Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641.

[9] Crazy Ron’s Communications Pty Ltd v Mobileworld Pty Ltd [2004] FCAFC 196; (2004) 209 ALR 1.

[10] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592.

30.     And in Re Pianotist CoLtd’s Application[11] endorsed by the High Court in Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd[12], Lord Parker stated:

You must take the two words. You must judge of 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 a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to conclusion that there will be confusion—that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods—then you may refuse the registration, or rather you must refuse the registration in that case.

[11] (1906) 23 RPC 774 at 777.

[12] [1952] HCA 15; (1952) 86 CLR 536 at 538.

Section 44 - Discussion

31.     The Opponent submits that:

A mark will be found to be deceptively similar to another mark if it takes a prominent and distinctive feature of that other mark: Seven-Up Co v Bubble Up Co. Inc (1987) 9 IPR 259.

Further, in Smith Hayden and Co Ltd’s Application (1946) 63 RPC 97 at 101 it was observed that a high degree of distinctiveness of the shared element of two marks tended to be seen by the public as denoting a common trade source.

The Applicant’s Mark should be compared with the Prior Mark on the basis of the above comparison criteria. There are three elements in each mark which will be compared in turn before comparing the representations of the marks in their totality.

The word POLO CLUB is common to both marks. It is submitted that in the context of cosmetics, leather goods and clothing, this common element is not descriptive but is in fact a distinctive element in both marks. No evidence has been filed by the Applicant to indicate that the word POLO has any generic meaning in relation to the relevant goods. The fact that there are other marks on the trade marks register containing the word POLO does not indicate that the word POLO is descriptive in the context of the specified goods. The presence of the additional word CLUB in both marks further emphasises the distinctiveness of this common element. In this regard, reference is made to the statement in Seven-Up above that the presence of a prominent and distinctive common element in both marks tends to indicate that these marks are deceptively similar.

Both the Applicant’s Mark and the Opponent’s Mark contain a polo match device. In the Prior Mark this device consists of a single polo player riding a galloping horse with his mallet raised. In the Applicant’s Mark, the device consists of three polo players riding galloping horses with two of the riders having their mallets raised. Both of the devices are presented in a black shade and tend to signify rapid movement. It is not essential for the above device elements to be identical in order for them to be confused. It is sufficient that these devices to possess a “common idea”. In Saville Perfumery Limited v June Perfect Limited (1941) 58 RPC 147 at 162 (HL) this issue was addressed as follows:

If the mark comes to be remembered by some feature in it which strikes the eye and fixes itself in the recollection, then confusion is likely to result if that feature is adopted in the trade mark of another

It is submitted that the polo player(s) appearing in both marks is a feature which “strikes the eye” and would be likely to lead to confusion between the two marks.

The two marks contain the geographic terms SANTA MONICA and BEVERLY HILLS. In assessing the distinctiveness of a mark, geographic terms are generally regarded as being descriptive. However, in the recent case of 1872 Holdings VOF v Havana Club Holdings SA (2017) 127 I PR 410 it was noted that a geographic term can “allude” to a particular image of a geographic locality rather than merely identify that locality. In the case of BEVERLY HILLS, this term can conjure up an image of a fashion-conscious, well-heeled, Californian community.

Reference is made to the comments in paragraph 6 of the Declaration of Daniel Haddad (“Haddad Declaration”) as follows:

Beverly Hills is one of the world’s most luxurious cities. It is known as a home to movie stars and millionaires. It is a adjacent on its eastern side to the city of west Hollywood and the Hollywood district of Los Angeles. It sits on the southern slopes of the Santa Monica Mountains and the world famous Santa Monica Boulevard runs through the middle of Beverly Hills.

Exhibit EH-1 of the Haddad Declaration provides background information about Beverly Hills and makes reference to the fact that Santa Monica is physically adjacent to Beverly Hills. It is submitted that both localities are very well known, not only in the United States but also in Australia as prominent areas of western Los Angeles. In these circumstances, it is submitted that it would be very easy for a prospective purchaser of the specified products to confuse such two well-known and adjacent geographic place names.

32.     Albeit a trade mark infringement case, in Lifestyle Equities C.V and Lifestyle Licensing B.V v Santa Monica Polo Club Limited & Others[13][14] Mr Recorder Douglas Campbell QC (sitting as a Judge of the United Kingdom High Court) made the following observations of the trade marks that are now before me:[15]

[13] [2017] EWHC 3313 (Ch).

[15] There were a number of trade marks before His Honour, some of which were held to infringe the Opponent’s United Kingdom registrations on the basis that their use would be likely to confuse or deceive.

The three-horse logo is visually quite different to the [Opponent’s trade mark] – not only are there now three horses, but the horse and rider in the front is visually distinct from the other pair as well as being more prominent than either.  The arrangement of the SANTA MONICA letters is also different to the BEVERLY HILLS letters.[16]

[16] Op cit at [98].

The only aural similarity is the words “polo club”. The Defendants’ goods are not sold into the polo market or for use in polo, and it was not argued that these words were merely descriptive.[17]

[17] Op cit at [99].

There was no specific evidence about what the average consumer would make of “Beverly Hills” and/or “Santa Monica”, both sides relying simply on submissions and leaving it for me to decide.  Both are well known place names, and in both cases it is implicitly assumed that the consumer would believe these to be the sort of place that would have a polo club – ie glamorous and rich, not a deprived industrial area.  I accept the Claimants’ submission that the average consumer would probably know them both to be places in the USA, but I am not sure that the average consumer would know that they were both places in California.  They are in fact neighbouring districts of Los Angeles.

I consider that there are clear conceptual similarities between […] the marks in question. 

[…]

In my view the overall impression created by [the Trade Mark] is now different.  The aural, and to a lesser extent conceptual, similarities still apply, but the visual differences are to my eye quite striking. [18] 

I need to bear in mind that infringement of this sign needs to be considered as of 2016, and that the Claimants’ mark had acquired a very substantial enhanced distinctive character through use by that date.  Does that make a difference?  I find this a difficult question but in the end I do not think it does.  The three-horse sign does not infringe under these provisions. 

[18] Op cit at [109].

33.     I note that the court held that the overall impression created the Trade Mark was sufficiently different from the Opponent’s Trade Mark for there to be no likelihood of confusion or of passing off.  Nevertheless, the Trade Mark was still sufficient to “call to mind” the Opponent’s Trade Mark and it therefore infringed on the basis of “dilution and unfair advantage”.

34. Under section 44 of the Act there is no provision which necessitates a consideration of “dilution or unfair advantage”.

35.     I agree with His Honour’s comments, above, and additionally observe that there are practical difficulties in a decision which would, in effect, imply that anyone, including (for example) a polo club, could have an absolute monopoly in the words “Polo Club” in combination with both other words and a pictorial representation of a polo player or polo players irrespective of what are, in fact, other major distinguishing features.  The circumstance that two trade marks share “conceptual similarities” has a limit in the consideration of the likelihood of deception or confusion: Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd.[19]

[19] [1952] HCA 15; (1952) 86 CLR 536.

36. The Opponent has not established its ground under section 44 of the Act.

Section 60

Statement of Grounds and Particulars

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

The Opponent had, before the priority date (26 October 2016), acquired a reputation in Australia in the Opponent’s Marks, including in relation to goods and services relating to:

·     Polishing, scouring and abrasive preparations; hair lotions; expressly excluding toothpaste, mouthwash and products for oral and dental care and hygiene; fragrance; cosmetics; body care products; soaps; essential oils; hair lotions in class 3;

·     Leather and imitations of leather, and goods made of these materials and not included in other classes; animal skins, hides; trunks and travelling bags; umbrellas, parasols and walking sticks; whips, harness and saddlery in class 18; and

·     Clothing, footwear, headgear and all other class 25 goods in class 25 [sic].

The Opponent commenced using the Opponent’s Marks continuously from at least 2004, with use by the prior owner who sought registration of the mark from 1989. The use of the Applicant’s Mark by the Applicant for any of the goods specified in the application would be likely to deceive or cause confusion in the marketplace, including by falsely suggesting that the Applicant’s goods or services are those of the opponent or a sponsored, approved, affiliated or licensed by the Opponent.

38.     I note now that Mr Haddad’s declaration does not support the above assertion that the Opponent’s Trade Mark has been used in Australia in relation to “Polishing, scouring and abrasive preparations; hair lotions; body care products; soaps; hair lotions in class 3; cosmetics; animal skins, hides; umbrellas, parasols and walking sticks; whips, harness and saddlery in class 18.”

Section 60 - Framework

39. Section 60 of the Act provides:

60Trade 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.

40.     The Opponent must therefore establish that the trade mark upon which it relies:

1. had, at the priority date, a reputation in Australia such that
2. the use of the Trade Mark would be likely to deceive or cause confusion.

41.     In McCormick & Co Inc v McCormick (‘McCormick’) Kenny J said of “reputation”: ^[20]

[20] [2000] FCA 1335; (2000) 51 IPR 102; [2000] AIPC 38-192 at [81].

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 Ltee[21] Heerey J said that the reputation required to be demonstrated (albeit in relation to section 28(a) of the repealed Trade Marks Act 1955)[22] was to be:

   [21] [2000] FCA 1587; (2000) 50 IPR 1.

   [22] 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.

   ... 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.

2. Kenny J explained in McCormick how the reputation of a trade mark is assessed by the decision-maker:[23]

   [23] Op cit at [81].

   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.

3. 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.[24] Absent any requirement under section 60 that the trade marks under consideration be deceptively similar, these factors are:

   [24] [1999] FCAFC 1020; [1999] FCA 1020; (1999) 93 FCR 365; (1999) 45 IPR 411; [1999] AIPC 91-499 at [50].

   (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 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 [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.”

4. 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:[25]

   [25] 1979] RPC 410 at 423.

   ‘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:[26]

   [26] 1937] HCA 38; (1937) 57 CLR 448.

   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.[27] 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.

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

2. It is also axiomatic that “confusion” may occur only when initially considering the purchase of the goods and might not persist: Dodds-Streeton J in Tivo Inc v Vivo International Corporation Pty Ltd observed:[28]

   [28] Tivo Inc v Vivo International Corporation Pty Ltd [2012] FCA 252 at [105]

   It is well established that trade marks may be deceptively similar for the purposes of ss 44(1) and (2) of the Act even if confusion is unlikely to persist up to the point of, and contribute to, inducing sale.

   Section 60 - Discussion

3. The Opponent submits:

   The ownership and control of the Prior Mark is addressed in paragraphs 10 to 13 of the Haddad Declaration and its licensed use of the Prior Mark in Australia is addressed in paragraph 16 of the Haddad Declaration.

   The international use of the Prior Mark under the control of the Opponent is set out in paragraphs 10 to 13 of the Haddad Declaration. The Opponent holds registration of the Prior Mark or substantially identical marks in 94 countries, details of which are set out in Exhibit EH-4 of the Haddad Declaration.

   The Opponent’s international brand strategy for the Prior Mark is to position the Prior Mark as a premium brand providing “affordable luxury” to middle class global consumers. Global retail sales of US$1.7 billion for the Prior Mark have been estimated by the magazine License Global as set out in Exhibit EH-3 of the Haddad Declaration. It is submitted that because the target market is likely to engage in frequent overseas travel, the substantial international reputation for the Prior Mark will inevitably have “spilled over” to Australia.

   The Australian marketing activities of the Opponent have been carried out through specialised licensees for each of the major product groups of cosmetics, leather goods and clothing.

   These activities are set out in paragraphs 16 to 20 of the Haddad Declaration. Examples of advertising of the licensees of goods bearing the Prior Mark in Australia are set out in Exhibits EH-5, EH-6 and EH-7 of the Haddad Declaration.

   The exposure of the international reputation of the Prior Mark is likely to be supplemented by visits by Australian purchasers to the Opponent’s website Figures for online Australian visitors to the foregoing website are set out in Exhibit EH-8 of the Haddad Declaration.

   Sales figures in Australia for the various product groups under the Prior Mark are provided in paragraph 21 of the Haddad Declaration for the period 2010 to 2016. However, predecessors in title of the Prior Mark would most likely have made significant use of the Prior Mark in Australia since the filing of the first of the Australian registrations of the Prior Mark in 1989.

   It is important to point out that in addition to licensed sales of the specified goods under the Prior Mark in Australia, there has apparently been significant parallel importation of these genuine goods by other parties either through direct or online retailing. Examples of such retailers are set out in Exhibit EH-9 of the Haddad Declaration.

   In paragraph 24 of the Haddad Declaration it is stated that the promotional spend of the Australian licensees of the Opponent has been around 5% of revenue. This promotional work is supplemented by the promotional activities of the Opponent on its above website.

   Examples of these latter activities are provided in Exhibits EH-10 and EH-11 of the Haddad Declaration.

   It is submitted that the international and Australian commercial activities of the Opponent under the Prior Mark for the specified goods has served to develop a strong reputation for the Prior Mark in Australia over many decades and that these activities have continued up until the present day. The likelihood of purchasers in the target market being “caused to wonder” as to the true origin of goods bearing the Applicant’s Mark is reinforced by the deceptive similarity of the Applicant’s Mark to the Prior Mark. Whereas “deceptive similarity” is not now a requirement of section 60, it is a fact to be considered when assessing the likelihood of confusion in the marketplace if the Applicant’s Mark is used and registered. No countervailing evidence of reputation of the Applicant’s Mark as at the filing date of that mark has been filed by the Applicant.

4. However, in my consideration, the quantum of annual sales, the advertising expenditure, and the number of visitors to the Opponent’s website (all of which I have discussed above) suggest that the reputation of the Opponent’s Trade Mark is quite modest in Australia.  It has not been established by the Opponent that its advertising has been projected into Australia and I note that such advertising that has occurred in Australia lies in the appearance of goods bearing the Opponent’s Trade Mark on various traders’ websites.  I would also infer that, if (as the Opponent suggests) the Opponent’s Trade Mark had a strong “spillover” reputation in Australia, the aforementioned figures would be a lot higher.

5. I would therefore characterise the reputation of the Opponent’s Trade Mark at the Relevant Date in Australia as being quite modest and in relation to upmarket clothing and footwear, bags and luggage, and scents, aftershaves, perfumery etc for men and women which are primarily sold via websites on the Internet.

6. In Pottle Productions Inc v Rute Ithalat Ve Ihracat Anonim Sirketi the Registrar’s delegate observed:[29]

   [29] [2012] ATMO 124 at [40].

   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.

7. Here, at the Relevant Date, the strength of the reputation of the Opponent’s Trade Mark in Australia was quite modest, and there is a comparatively low degree of similarity between the parties’ trade marks; however, there is a nexus between the goods under consideration which exist in a marketplace for high-end fashion goods where, presumably, the public pays greater attention to their purchases.

8. Balancing these factors, I do not consider that the Opponent has established that the concurrent use of the trade marks would be likely to confuse or deceive because of the reputation in Australia of the Opponent’s Trade Mark.

9. The ground under section 60 is not established.

   Section 42

   Statement of Grounds and Particulars

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

    As the Opponent commenced using the Opponent’s Marks continuously from at least 2004, with use by the prior owner who sought registration of the mark from 1989, it has developed significant goodwill and reputation in the trade marks including in relation to the goods in class 3, 18 and 25. Consequently, use of the similar Applicant’s Mark by the Applicant for any of the goods or services specified in the application would be likely to mislead or deceive consumers into believing their goods were associated with those of the Opponent in contravention of the relevant legislation, including section 18 of the Australian Consumer Law (ACL), and could constitute false representation as to sponsorship, affiliation or approval under section 29(1)(h) of the ACL.

    Section 42 - Framework

11. Section 42 of the Act relevantly provides:

    42Trade 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.

12. The onus is on the Opponent to establish that use of the Applicant’s trade mark would be, rather than could be, contrary to law on the balance of probabilities.[30]

    [30] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683.

    Section 42 – Discussion

13. In the present matter the Opponent has failed to establish a ground of opposition under section 60 of the Act. As the test for misleading or deceptive conduct under sections 18 and 29(1)(h) of the ACL is a more stringent test than that for “deception or confusion” under section 60,[31] I am satisfied that the Opponent has also failed to establish that the use of the Applicant’s Trade Mark would be contrary to section 18 and 29(1)(h) of the ACL.

    [31] Ownit Homes Pty Ltd v Ownit Conveyancing Pty Ltd [2005] ATMO 47, [36]; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, 198 (Gibbs CJ).

14. The Opponent has not established its ground under section 42 of the Act.

    Section 62A

    Statement of Grounds and Particulars

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

    That the Applicant has shown bad faith in not complying with a commitment to the Opponent not to use the Applicant’s Mark or a mark similar to the Applicant’s Mark.

    Section 62A – Framework

16. Section 62A provides:

    62AApplication made in bad faith

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

17. In Elmwood Design Limited v Dig & Fish Pty Ltd the Registrar’s delegate stated:[32]

    [32] [2018] ATMO 114 at [58].

    The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 provided some non-exhaustive examples of applications made in bad faith:◦persons who monitor new property developments, register the names of new developments as trade marks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers licence or buy the trade marks;

    ◦persons who have a history of applying for trade marks that are deliberate misspellings of other registered trade marks;

    ◦persons who identify trade marks used overseas but with no Australian use as yet who then apply to register the trade marks in Australia for the express purpose of selling them to the overseas owners.

18. I further note that the case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (‘Fry’) is an authority on this section of the Act. In that case, Dodds-Streeton J, quoted[33] with approval the following comments of Lord Hutton in Twinsectra Ltd v Yardley:[34]

    [33] [2012] FCA 81 at [147]

    [34] [2002] UKHL 12 at [27] and [36],

    Clearly the court, when considering bad faith, cannot apply a purely subjective test, called by Lord Hutton ‘the Robin Hood test’. The dishonest person or one with low standards cannot be permitted to obtain trade mark registrations in circumstances where a person abiding by a reasonable standard would not. The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading. Registration is not provided to help those with low moral standards. ...

    Therefore I consider ... that your Lordships should state that dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people, although he should not escape a finding of dishonesty because he sets his own standards of honesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct.

19. Her Honour continued later in Fry:[35]

    [35] Op cit at [165]-[166].

    The formulation in United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison.

    Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.

    Section 62A – Discussion

20. The Opponent submits:

    It is recognised that mere carelessness or negligence may not meet the standard of “bad faith”. However, in the current situation, there has been prior correspondence between the Applicant and the Opponent concerning the use of the Applicant’s Mark. Reference is made to paragraph 29 of the Haddad Declaration and to Exhibit EH-15 of that Declaration which provide evidence of an undertaking in 2014 by the Applicant to the Opponent that it will not use the Applicant’s Mark. It is submitted that this situation is not one in which the Applicant has negligently or imprudently failed to ascertain the rights of the Opponent. These rights have been brought to the Applicant’s attention by the Opponent and the Applicant has undertaken not to use the Applicant’s Mark. It is submitted that in these circumstances, the filing of the Applicant’s Mark in Australia in 2016 falls well short of acceptable commercial standards of behaviour.

    It is also noted that the representation of the Applicant’s Mark includes the geographic term SANTA MONICA in full knowledge by the Applicant of that locale’s physical proximity to BEVERLY HILLS which is a prominent feature in the Prior Mark. It is submitted that this behaviour further indicates a possible intention by the Applicant to “trade off” the reputation of the Prior Mark. If so, it is submitted that this conduct falls short of acceptable commercial standards of behaviour.

    It is submitted that the Applicant’s Mark was filed in “bad faith” under section 62A of the Act based on the criteria set out in Fry above according to the balance of probabilities test as referred to in that case.

21. In my consideration, this ground is not well founded for the following reasons:

    The material which is said to support this ground is within a “Without Prejudice” letter to which I may not refer; and,

    In any event, the Cease and Desist material which culminated in the “Without Prejudice” letter indicates that the trade mark which was there complained of by the Opponent was not the Trade Mark; and,

    Although it is mentioned in the Statement of Grounds and Particulars, there is no detail within the Cease and Desist material extraneous to the “Without Prejudice” letter which relates to “a mark similar to the [Trade Mark]”; and,

    The proximity of Santa Monica to Beverley Hills argued now by the Opponent is not mentioned in the assertion detailed against the ground under section 62A in the Statement of Grounds and Particulars (and there has been no application for an amendment to reflect this submission).

22. The Opponent has not established its ground under section 62A of the Act.

    Decision

23. Section 55 of the Act relevantly provides:

    55Decision

    (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.

24. The Opponent has not established a ground of opposition.

25. The trade mark application 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 and that the disposition of the application should be in accordance with the Court’s order or direction.

    Costs

26. The Opponent sought an award of costs in its favour in the event it was successful in these proceedings. However, as the Applicant has been the successful party, in terms of section 221 of the Act, I award costs against the Opponent as per Schedule 8 to the Trade Marks Regulations 1995.

    Iain Campbell Thompson
    Hearing Officer
    Trade Marks Hearings
    19 March 2019

    
    

[14] The parties, although differently named, appear to all intents to share an identity with the parties to these proceedings.