Lifinia Pty Limited v Oroton Pty Limited

[1993] ATMO 68

TRADE MARKS ACT 1955

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS

Re:Opposition by Oroton Pty Limited to the registration of Trade Mark application numbers 531959 and 531960 in the name of Lifinia Pty Limited.

Background
In this issue Lifinia Pty Limited, hereafter "the applicant", of 61 Malborough St, Surry Hills, New South Wales, made application to register the two trade marks numbered above in Class 18.  The applications were lodged on 4 April 1990 for the marks below to be registered in respect of specifications of goods that includes all goods in Class 18.  The applicant's goods of interest, by the specifications, are 'handbags'.

The marks that are the subject of the applications are:

A531959

CITY GEAR

A531960

CITY GIRL

Application 531959 was advertised as accepted for registration on 2 April 1992.  Application  531960 was similarly advertised on 30 April 1992.

On 2 July 1992, as allowed by sub-section 49(1) of the Act, Oroton Pty Limited, hereafter "the opponent", of 52 Balgowlah Road, Balgowlah, New South Wales, lodged Notice of Opposition to the registration of each of the acceptances.  I will recite the grounds stated in the Notice in full as most of the grounds were argued at the hearing:

(a)The applicant is not the proprietor of the opposed trade mark.

(b)The opposed trade mark is not distinctive, not is it capable of becoming distinctive, of the applicant's goods.

(c)Registration of the opposed trade mark would be likely to cause deception or confusion by reason of its similarity to one or more of the opponent's trade marks used for the same or similar goods or description of goods.

(d)The applicant does not trade in all of the goods for which registration is sought and at the date of the application for registration had no real intention of doing so.

(e)Because of the reputation and rights acquired by the opponent, use of the opposed trade mark by the applicant in respect of the goods would be likely to deceive or cause confusion and would constitute an infraction of the opponent's rights.

(f)Use of the opposed trade mark by the applicant would be contrary to law.

(g)The opposed trade mark would not be entitled to protection in a court of justice.

(h)Registration of the opposed trade mark would prejudice the opponent in the conduct of its business.

(i)Registration of the opposed trade mark would dilute the rights of the opponent in respect of one or more of its trade marks.

(j)By reason of any one or more of the matters set forth in the preceding paragraphs or otherwise the Registrar in the exercise of his discretion ought to refuse to register the opposed trade marks.

At the hearing of the issue in Canberra, on 16 April 1993, the opponent was represented by Kerry Moore Chrysiliou of Chrysiliou Moore Chrysiliou, solicitors and attorneys of Fairlight, Sydney.  The applicant was represented by Julia Baird of counsel, instructed by Messrs Hancock Alldis of Hurstville in Sydney.

Evidence

All evidence in support of the oppositions was lodged on 4 December 1992.  The evidence consists of a declaration by Peter Albert Stearn (the "Stearn declaration") who is company director of the opponent.  Appended to the declaration are eleven exhibits.

At the commencement of the Hearing, Julia Baird attempted to gain an extension of time in which to serve the applicant's evidence in answer.  Kerry Moore Chrysiliou said that she would not oppose the extension of time and would accept the evidence in answer if she could present the opponent's evidence in reply which she had with her.  Julia Baird then retracted the applicant's attempt to serve its evidence in answer and argued against my acceptance of any further evidence from the opponent.  I received no evidence from the parties and there is none of the evidence that was attempted to be served at the hearing on the official files.

Subsequent to the hearing, Kerry Moore Chrysiliou sent me a declaration (the "Chrysiliou declaration") dated 15 April 1993 under cover of a letter dated 19 April 1993.  In the letter she states that the declaration goes to redress her perception that I received the applicant's evidence in answer at the hearing, but was not going to place any reliance at all on it.  She was concerned that a person, on reading the official files, could form the opinion that the evidence in answer that she thought to be on the file forms part of the record of this matter.  As I have stated, however, I did not receive the applicant's evidence and it is not on the files.  I think that it would be doing the applicant a grave injustice to allow material on which it has not had the opportunity to comment to remain on the file.  I am also anxious to let the applicant know that it can rest assured that I have not read the Chrysiliou declaration, apart from identifying the declarant and the date of the declaration.

I will also note that during the hearing Kerry Moore Chrysiliou placed examples of both of the parties' handbags on the table.  I believe that this may have been an allusion to her perception that the goods were similarly 'got up'.  As these bags do not form part of the permanent record and were not an exhibit to any formal evidence, and the alleged similarity was not evidenced formally, I have also disregarded these.

Court Proceedings
The two parties are currently engaged in litigation in the Federal Court of Australia, New South Wales District Registry, General Division. The matter is, according to copies of the statement of claim that the parties provided to me, proceeding under the Trade Practices Act 1974. There is nothing, that I can see, that is couched in terms of the Trade Marks Act. I therefore do not foresee any problems with issuing my decision.

The submissions
The submissions were extensive and were centred around sub-section 40(1) and sub-paragraphs 28(a) and (d) of the Act.  Both parties presented lengthy argument centred on the Stearn declaration and how the factors of, firstly, proprietorship and, secondly, confusion and deception in the context of blameworthy conduct might, or might not, be applicable to this issue.

For the sake of brevity, and in relation to the relevant portions of the arguments presented, I will set out what I consider to be the salient points of the Stearn declaration and then how the administration of the Act and its interpretation apply in this instance.

The Stearn Declaration
Peter Albert Stearn is company secretary of Oroton Pty Limited ("Oroton").  He states that, on 1 July 1988, Oroton acquired the assets of Pandiro Handbags Pty Limited, a subsidiary of Pacific Dunlop Limited, and formed a company Pandiro Pty Limited to hold those assets.  The brand FIORELLI was already  used in Australia at that time by Pandiro Handbags Pty Limited in relation to handbags.  Oroton set out to capture the young end of the market with the FIORELLI label.

In about October 1988 Oroton decided to introduce a new trade mark, STANDARD GIRL CITY EQUIPMENT, (the "first trade mark") for use in the handbag business of Pandiro Pty Limited.  "Use", although what this use constituted is not stated, commenced in early 1989 on handbags, wallets and purses and other goods not specified.  Sample handbags were distributed in March/April, 1989.  Goods for sale were distributed in July/August 1989.  Various exhibits to the declaration show the use of this trade mark and a copy of the United Kingdom registration of the trade mark B1384332.

The Stearn declaration then goes on to list the retailers of its range under this and a subsequent trade mark.  The list is impressive and would include most of major retailers of handbags in Australia.  There had, by the relevant date, 4 April 1990, been two stores opened by Oroton selling Fiorelli brand handbags, etc.  Neither the declaration nor the Oroton annual report attached to the declaration makes it absolutely clear that the shops were called FIORELLI shops.

In late 1989 the word GIRL was deleted from the trade mark and the mark was used as the words STANDARD CITY EQUIPMENT, (the "second trade mark").  The FIORELLI range incorporating the second mark was released for viewing and ordering in October 1989, and was delivered to retail outlets in January/February 1990.  The opponent continued to use an oval name-plate which now featured the second trade mark: the declaration does not explicitly mention the first name-plate.

Advertising of the two marks has occurred from 1989/90 when approximately $100,000 was spent on advertising, through to the last financial year when $405,000 was budgeted.  Advertising has taken place in Cosmopolitan, Mode and Cleo, national magazines for women.

Use of the second trade mark has continued, and is continuing, since late 1989, and the total of revenues for goods sold under both the first and second marks has risen from approximately $3 million in 1989/90 through to $6.5 million in 1991/92.

Mr Stearn then states his belief that the applicant's handbags bear a striking resemblance to those of the opponent.  The opponent's handbags utilise a "distinctive combination" of black material and chrome coloured hardware.  The look is widely regarded as being the FIORELLI STANDARD CITY EQUIPMENT "look".  He states that he believes that the use of the opposed marks on handbags that have the look of the opponent's is a calculated attempt on the part of the applicant to pass off its products as being those of the opponent's; or, at the very least, to trade on the very substantial reputation that the opponent has gained in the STANDARD CITY EQUIPMENT trade mark.

To this end, the opponent is taking action against the applicant in the Federal Court of Australia.

Sub-Section 40(1): Proprietorship
Section 40 of the Act states, inter alia:

(1)A person who claims to be the proprietor of a trade mark may make application to the Registrar for the registration of that trade mark in Part A or Part B of the Register.

It follows from this that an opponent can dislodge the applicant's claims of proprietorship via evidence that at, or before, the date of application the opponent was using the same mark in respect of the same goods or services.  If the applicant cannot, or does not, refute the claim via the lodgement of its own evidence that establishes its own use which precedes that of the opponent (and, hence, shows its proprietorship in the mark) the opposition must succeed: see, for example, Shell Co of Australia Ltd v Rohm and Haas Co (1948) 78 CLR 601; or, Aston v Harlee Manufacturing Co (1960) 103 CLR 391.

There are three issues here for my consideration then.  The first is whether the marks at issue are the same marks; the second is whether the goods are the same goods; and, the third is who had the first use of the marks prior to the date of application.  As a corollary of the latter issue is the question of the status of the marks at the date of the application for registration of the opposed marks.

The relevant date at which proprietorship must be determined is the date of application of the opposed marks which is 4 April 1990: Seven Up Co v O.T. Ltd (1947) 75 CLR 211.

I accept that the goods involved are the same goods in relation to handbags, purses and wallets.  The Stearn declaration repeatedly makes reference to goods other than those in the preceding sentence, though it does not specify them.  I therefore make my considerations in relation to those goods: handbags, purses and wallets.

It is apparent, from the cases, that the question of the comparison of the marks at issue in terms of section 40 is very narrow.  The greatest deviation from a strict identity, or a one-to-one matching, that I can find is in the Seven Up case, supra, ("7UP in circle" v "8UP in square"); and, in Kendall Co v Mulsyn Paint & Chemicals (1963) 109 CLR 300 ("Polykin" v "Polyken"). It would seem from these, and the other reported cases, that the marks, if the opposition is to succeed, should be "nearly identical" or substantially the same mark. In short, the marks need not be identical, but should be much closer than they need be by the test in section 33 of 'deceptive similarity'.

The applicant's marks are the words CITY GIRL and the words CITY GEAR.  The first mark of the opponent is the phrase STANDARD CITY GIRL EQUIPMENT and the second mark is the words STANDARD CITY EQUIPMENT.  It is true that the word CITY occurs in all four marks; however, this, in this context, is nowhere near enough to bring the marks into the category of being substantially the same mark.  The issue is one of strict side by side comparison.  The word GEAR and GIRL, and, GEAR and EQUIPMENT, are, in my consideration, nowhere in the league of being, either on their own or in conjunction with the word CITY, enough to bring the issue to being within the same genus as the marks in Seven Up and Kendall, supra.  Accordingly, I believe that one can immediately discard the marks CITY GEAR and STANDARD CITY EQUIPMENT from any further consideration, as regards the comparison of the marks, in relation to the proprietorship issue: I do not think that those marks are even close to being in the category of being "deceptively similar" - the wider test that I mentioned from section 33 of the Act.

When the remaining marks, CITY GIRL and STANDARD CITY GIRL EQUIPMENT are analysed in the context of the Seven Up decision, supra, I do not think that it can be held that they are substantially the same mark.  Despite the fact that the words CITY GIRL are common to both marks, it is quite obvious that the opponent's mark has additional words in it: those words being STANDARD ... EQUIPMENT.  This, on its own is, I think, sufficient to defeat the proprietorship claim.  Additionally, however, when the sense, or meaning, of the words CITY GIRL are assessed in the opponent's mark, it is by no means clear that they mean the same thing or form the same identity in that context.  The phrase STANDARD CITY GIRL EQUIPMENT could mean, for example, "ordinary city equipment for girls", or it could mean "girl equipment for standard cities", or it could denote, "ordinary equipment for city girls", or, conceivably, although this is plumbing the depths somewhat, it could mean, "girl equipment made in Standard city" - the word STANDARD is the name of a place in both California and Alaska in the United States of America.  It follows that, while quite a definite meaning can be ascribed to the words CITY GIRL, solus, the same meaning cannot be necessarily ascribed to the same words in the context of the phrase STANDARD CITY GIRL EQUIPMENT and, accordingly, (in addition to my finding that the two marks are, in any case, not substantially the same marks), I would be reluctant to find that the words maintain their meaning and identity in the context of the phrase.  Consequently, I must find that the marks are not in this sense substantially the same marks; and, if the result seems to be unusual, it is perhaps a good illustration of the benefits of the registration of a trade mark and the wider protection afforded by section 33 of the Act.

My determination on this issue is that the marks are not substantially the same marks and the opposition under section 40 of the Act must fail on this issue.

I make the following comments should I be wrong concerning the comparison of the marks.

I turn now to the question of the use of the marks in the period immediately preceding the date of application.  In Seven Up Co v O.T. Ltd (1947) 75 CLR 203, at 211, Williams J. stated that:

The court frowns upon any attempt by one trader to appropriate the mark of another trader [...]. It therefore seizes upon a very small amount of use of the [...] mark in Australia to hold that it has become identified with and distinctive of the goods of the [...] trader in Australia. It is not then a mark which another trader is entitled to register under the Trade Marks Act because it is not his property but the property of the [other] trader ....

It is without doubt that the opponent had used the first mark extensively prior to the date of application.  The Stearn declaration points to wholesale sales of $23,588 in 1988/89 and total sales of approximately $2.5 million in the financial year 1989/90 prior to 4 April 1990, the relevant date.  However, as Julia Baird observed in her submissions, these figures do not differentiate between the first and second marks.  But I accept that at one stage, prior to the date of these applications, the opponent was the proprietor of the first mark, STANDARD CITY GIRL EQUIPMENT.

The Stearn declaration states that, "The word "GIRL" was deleted from the first trade mark commencing late 1989.  The FIORELLI range of products was then marketed and distributed under the trade mark STANDARD CITY EQUIPMENT, (hereinafter referred to as "the Second Trade Mark.")".  Nowhere in the declaration is there any statement and evidence of the opponent's continuing interest in the further use of the first mark.  Indeed, its very use of the terms "first mark" and "second mark" tends to reinforce the opinion that I have formed from reading the evidence that the opponent sees the first mark as being something that it has effectively abandoned.  If the first trade mark were a trade mark that was going to remain disused for a while, the use of the words, "The word GIRL was deleted from the first trade mark ...", in the Stearn declaration seem to be at odds with such disuse.  A more logical expression to use if the situation was the creation of a second mark would have been, "We created a second trade mark ...".  Any expression of continuing use and interest in future use is in the second mark.  An alternative way of reading the declaration is that there is only one trade mark; that the opponent decided to amend it; and, that the word GIRL was deleted from it.  I do not think that the Stearn declaration can be held as indicating that the mark was merely disused.  Whichever is the correct way of reading the Stearn declaration, I consider that it shows that the opponent had effectively decided to abandon the STANDARD CITY GIRL EQUIPMENT in or by "late 1989".

In Riv-Oland Marble Co (Vic) Pty Ltd v Settef SpA (1987) 10 IPR 402, (1988) 12 IPR 321, McGarvie J. concluded that proprietorship in a trade mark, having once been established, could be lost by intentional abandonment, acquiescence or estoppel, but not by mere disuse. He went on to look at the facts and stated intentions to "infer from this whether Settef formed an intention to abandon". I consider that by, to all intents, changing the first trade mark into something else, and not using the first trade mark, and expressing no interest in the re-use of the first trade mark, the opponent has raised the presumption that it has abandoned that trade mark, and, unless it specifically controverts that presumption, I cannot accept that the mark is merely disused.

Accordingly, I find that at the relevant date the opponent was not the proprietor of the mark STANDARD CITY GIRL EQUIPMENT as the mark had been abandoned; or, alternatively, that, if it were the proprietor of that mark at the relevant date, it has not demonstrated that proprietorship satisfactorily by showing that its actions had not been an abandonment of the mark.

Accordingly, I must determine that the opposition also fails under section 40 for the reasons stated in the prior paragraph.

Sub-paragraph 28(a): confusion and deception
Since the ruling of the High Court in New South Wales Dairy Corporation v Murray Goulbourn Co-Operative Company Limited, 18 IPR 385, it has been necessary to read each of the provisions of section 28 in conjunction with sub-paragraph 28(d). Accordingly, for the purposes of this decision, sub-paragraph 28(a) should be read:

A mark -

(a)the use of which would be likely to deceive or cause confusion;  [and]

(d)which would otherwise not be entitled to protection of justice,

shall not be registered as a trade mark.

Sub-paragraph 28(d) above was held, in Murray Goulbourn, supra, to include some 'blameworthy conduct': this being a label for a category of behaviour that in that decision of the High Court was stated to include the failure of the proprietor to police its registered mark.

Kerry Moore Chrysiliou argued strongly for the opponent that the fact that the applicant had applied to register these marks did, in itself, constitute the blameworthy conduct seemingly anticipated in section 28 of the Act.  I also understand, although it was barely whispered at the hearing, that it is the opponent's belief that what it sees as the applicant's pattern of behaviour, the adoption of a similar get-up of goods, the adoption of these particular marks and the application to register those marks, constitute behaviour which can be labelled blameworthy.

I consider that I cannot decide this issue on the latter point.  Firstly, because I have no evidence before me that this is true.  Such behaviour is, anyway, a matter of degree: minor imitation and copying is normal business behaviour and the line between sharp business practice and passing off your goods as those of a business rival is a fine one.  Secondly, and more importantly, I believe that such a determination is, in this context, and in the absence of a Court ruling to the contrary, outside the power that I have as a delegate of the Registrar: R v Quinn & Another ex parte Consolidated Foods Corporation (1977) 138 CLR 1. To arrive at the conclusion that the behaviour of the applicant goes beyond sharp business practice would involve a consideration of principles outside the scope of the Act.

I do not think that the mere making of a trade mark application, in the absence of breach of an agreement not to, or absence of intention to use, constitutes blameworthy conduct.  It is, after all, something to be encouraged in order that the Register reflect the true market-place; and, the proprietors of trade marks establish statutory as opposed to common-law rights.  It might be fairly said that if the opponent had engaged in this behaviour - applying to register trade marks - it might not have found itself being in the position of having to oppose these applications.

As I find that there has been no blameworthy conduct on the part of the applicant, I do not have to further consider the issues of possible deception and confusion, and the opposition must fail also in respect to section 28 of the Act.

Determination
Accordingly, I determine that the applicant has successfully discharged the onus on it to show that its marks should be registered.  The opponent has failed on all counts and I accordingly dismiss the opposition and direct that, subject to any appeal against my determination, the applications proceed to registration.

Costs
Having been successful, the applicant is entitled to its costs which I so award.

Ian Thompson
Senior Examiner
Trade Marks Hearings

9 August 1993