Lockheed Martin Corporation v Raytheon Company

[2012] ATMO 102

TRADE MARKS ACT 1995

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

Re:Opposition by Lockheed Martin Corporation to registration of trade mark application 1065708(13) - PAVEWAY - filed in the name of Raytheon Company.

Delegate:	Iain Thompson
Representation:	Opponent: Felicity Marks of Counsel instructed by Kelvin Lord & Company. Applicant: David Stewart of Wrays.
Decision:	2012 ATMO 102 s52 opposition: s41 - inherent adaptation of trade mark to distinguish goods, sole general word used in relation to goods by traders. Ground established.

Background

1. Raytheon Company, (‘the Applicant’) filed application under the Trade Marks Act 1995 (‘the Act’) to register a trade mark details of which appear below:

   Application No:           1065708
   Filing Date:                  20 July 2005
   Convention:                 18 July 2005: 78/672972: United States of America
   Goods:  Class 13: Laser-guided bomb kits (‘the Goods)

   Trade Mark:                PAVEWAY

2. The application was examined as prescribed by section 31 of the Act and advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 17 November 2005.

3. On 17 May 2006, after seeking and receiving an extension of time in which to do so, Lockheed Martin Corporation (‘the Opponent’) served and filed Notice of Opposition to the registration of what I will hereinafter term ‘the Opposed Trade Mark’.

4. The Notice includes the three grounds relied upon at the hearing of the matter, these being under sections 41 and 58 and subparagraph 42(b) of the Act (subparagraph 42(b) enlivens Section 52 of the Trade Practices Act 1974 which applied at the priority date of the Opposed Trade Mark).  For the sake of completeness I note that the other grounds in the Notice have not been established and that an appeal from this decision to the Court is de novo and any ground may be relied upon.

5. The Opponent and the Applicant (collectively ‘the parties’) have respectively served and filed evidence in support, evidence in answer, evidence in reply and further evidence as allowed by the Act and regulations thereto. I will discuss the evidence in more detail below.

6. The matter duly came to a hearing and I heard the submissions of the parties in Perth on 31 August 2012.  Felicity Marks of Counsel, instructed by Kelvin Lord & Company, represented the Opponent and David Stewart of Counsel instructed by Wrays represented the Applicant.

   Onus

7. The Opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities.[1]

   [1] See 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]; Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891; (2009) 180 FCR 60; (2009) 258 ALR 545; (2009) 82 IPR 13; [2009] AIPC 92-355 per Sundberg J at [22] to [26]; Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664; (2010) 87 IPR 300 per Kenny J at [30] to [40]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051; (2011) 198 FCR 435; (2011) 283 ALR 743 per Greenwood J at [16] to 32]; Allergan, Inc v Di Giacomo [2011] FCA 1540; (2011) 199 FCR 126; 94 IPR 541 per Stone J at [11] to [12] and most recently Tricarico v Dunn Bay Holdings Pty Ltd [2012] FCA 271 per McKerracher J at [9] to [10] and Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (2012) 94 IPR 551 per Dodds-Streeton J at [13].

   Evidence Served and Filed

8. The evidence served and filed in relation to this matter comprises: 

Evidence in Support

StatutoryDeclarations of :  

Darren Privitera with Exhibits A - B

John M Pericci with Exhibits 1 - 7

Susan Goldsmith with Exhibits 1-3

Evidence in Answer

Statutory Declarations of:  

Michelle Miller with Exhibits MM-1 - MM-2

Benjamin J. Ford with Exhibits A - O

Evidence in Reply

Statutory Declarations of:  

Joseph Michael Serra with Exhibits 1 – 15

Kelvin Ernest Lord

Joseph Serra with Exhibits 1 - 8

Susan Okin Goldsmith with Exhibit A

Opponents Further Evidence
Statutory Declarations of:

Raymond Conroy with Exhibits RJC1 – RJC2
Nico de Jong with Exhibit NDJ-1

Applicant’s Further Evidence
Statutory Declaration of:

Kelvin Ernest Lord with Exhibit KEL-1

1. Several of the above declarations exhibit affidavit material from proceedings in jurisdictions other than Australia and I will detail this as it becomes necessary in the course of this decision.

   The Goods

2. The parties make kits (more particularly a series of standard kits) that are in all material terms identical across each member of the series and come in two parts which operate together to turn a conventional unguided ‘dumb bomb’ into a precision guided ‘smart bomb’.  One part of the kit consists of a computer control group (‘CCG’); the second part of the kit is an airfoil group (‘AFG’) consisting of rear fins and a front end canard.  Each part of the kit is attached to an otherwise unguided ‘dumb’ bomb by military personnel in the field.  The CCG and AFG work together to provide guidance and flight control.[2]  I will hereinafter refer to these kits as ‘the Goods’.

   [2] Pericci – paragraph 4.

3. The bomb’s target is illuminated by a laser designator[3] and the CCG and AFG work together to guide the bomb to the designated target.[4]

   [3] Serra, Exhibit 11 states that the kits may also incorporate either GPS and/or inertial guidance assistance.

   [4] Pericci – Exhibit C.

4. The Goods are made by the parties in the USA and supplied to the US military and also to allies of the USA including Australia.

5. Collectively, these Goods are universally known in the USA as ‘paveway’ or ‘paveway kits’.  The letters P.A.V.E are an acronym in use by primarily by the military which stand for Precision Avionics Vectoring Equipment.  There are various iterations of the Goods in respect of which, inter alia, the designators GBU-10, GBU-12, GBU-27 and GBU-24 are used under the general heading PAVEWAY II.

   Questions for determination

6. The Applicant claims that it owns the trade mark PAVEWAY in Australia.  The Opponent objects that the word ‘paveway’ is a generic term in Australia and elsewhere in the world and refers to the nature of the Goods.  The Opponent otherwise submits that if the word ‘paveway’ is a trade mark, the Applicant is not the owner of the trade mark.

7. There are two major questions which arise for my determination in considering the evidence and grounds argued at the hearing:

   1.Is the word ‘paveway’, used in relation to the Goods, a trade mark or a generic term in Australia?

   (Section 41 of the Act)

   2.If the word ‘paveway’ is a trade mark, who is the owner of the trade mark in Australia?

   (Section 58 of the Act)

8. As the Opponent has only to establish one ground of opposition, if I find that that word ‘paveway’ is generic in Australia, I need not answer the second question. The third ground of Opposition, that under subparagraph 42(b) of the Act, will not arise for my consideration whatever the answers to the above questions might be: if the opposition is established under either questions 1 or 2 above, the subparagraph 42(b) ground need not be considered; and further, if the opposition is not established under either section 41 or 58 of the Act it logically follows that the use of the Opposed Trade Mark by the Applicant would not mislead or deceive in terms of section 52 of the Trade Practices Act 1974.

   Evidence – Discussion

9. The submissions of the parties at the hearing tended to dwell on the minutiae of the very extensive evidence. I will discuss the evidence in general terms here and refer to it in more detail as is necessary under my considerations of the particular grounds – that is (in view of my decision) under the heading Section 41 below.

10. The history of the Goods is extensively discussed in Serra, Exhibit 11, from which the following passage in the publication Janes is extracted:

    The Paveway family of Laser-Guided Bombs (LGBs) - or more precisely, laser guidance kits - was designed and developed during the 1960s to meet the need for a precision attack capability for tactical aircraft that became pressing during the Vietnam War. The Precision Avionics Vectoring Equipment (PAVE) prefix was given to a range of US Air Force guided weapons initiatives at that time, but the Paveway codename has today become almost a generic title for LGBs. Development work was pioneered by Texas Instruments, which was later acquired by [the Applicant]. Within the US there are currently two producers of the Paveway guidance system; Raytheon Missile Systems and Lockheed Martin Missiles and Fire Control.

    In 1965, the USAF Armament Development and Test Center (ADTC), Eglin AFB, initiated a competitive evaluation of two laser-guidance concepts for standard low-drag general purpose bombs, Following successful evaluation the Paveway programme office was established at Wright-Patterson AFB with Texas Instruments (now Raytheon) selected to develop and supply guidance packages as modification kits for M 117 general purpose bombs. The system underwent Southeast Asia evaluations with the first operational releases in Vietnam in 1968. The success of the weapon rapidly led to the development of other modification kits to fit other free-fall bombs. Modular design concepts were used resulting in a common guidance and control unit being adapted to the Mk 82 (227 kg), Mk 83 (454 kg), Mk 84 (908 kg), M 118 general purpose bombs and the Hard Structure Munition (HSM) penetrating bomb, with only the aerodynamic surfaces changed to meet the requirements of each size bomb. The modification kits were designated GBU (Guidance Bomb Unit)-10 for the 2,000 lb Mk 84, GBU-11 for the M 118 (a now obsolete 3,000 lb bomb never cleared for use as a Paveway), GBU-12 for the 500 lb Mk 82, 1,000 lb GBU-16 for the Mk 83 and GBU-17 for the HSM penetrator, which was never put into production.

11. The standards for the Goods are set by the US Department of the Air Force (‘USAF’) and tenders for supply of the Goods are called by the USAF from pre-qualified companies whose goods meet the standards.  These competing tenders are assessed by the Air-to-Surface Munitions Directorate at Headquarters Ogden Air Logistics Centre.[5]  The goods made to the USAF standards are to all intents identical apart from serial markings.  There are two pre-qualified companies permitted to bid on these tenders – these are the parties to these proceedings.

    [5] Serra – Exhibit 15.

12. It is apparent from the evidence in general that contracts between competing tenderers and the USAF may be split so that, for example, the Applicant might get 40% of the requirement and the Opponent receive the remaining 60%.

13. There are two ways for a United States company to sell military goods.  The first way is by Direct Commercial Sales (‘DCS’), in which the seller obtains consent from the U.S. Government but makes a direct sale itself.  The second way is Foreign Military Sales (‘FMS’), in which the goods are purchased by the US Department of Defense for sale to another government.  In the FMS scenario, the US Department of Defense acts in a similar way to a distributor or wholesaler.[6]

    [6] Serra – paragraph 33.

14. Mr Forde states that the Applicant first used the PAVEWAY trade mark in Australia in 1975;[7] corroborative material at Forde Exhibit I shows that Applicant has made on-going DCS supplies of the Goods to the Australian Defence organisation (‘Defence’) until the date of filing this application.  The Opponent has made DCS supplies of Goods to Defence since 2002.[8]

    [7] Forde – paragraph 18.

    [8] Pericci – paragraph 33 and Exhibit 7.  Privatera paragraph 16.

15. A simplified summary of the Australian defence procurement process is that Defence identifies the major capital equipment that it wishes to acquire, the Commonwealth Government approves the purchase and, in the instance of sensitive equipment such as the Goods, approval is sought from the US government for the purchase of that equipment.  For the purposes of this decision, it is not relevant whether the approval is by direct approach by an Australian government representative, such as a military attaché, to the relevant department of the US government or if it is by, as the DCS process implies, a representative of the seller of the Goods.

16. The USPTO has found the word ‘paveway’ to be generic in proceedings before it.  In those proceedings the USPTO issued an opinion[9] that the trade mark PAVEWAY is generic in the USA when used in relation to ‘laser guided bombs’ (Serial No. 78481770) and ‘laser guided bomb kits,’ (Serial No. 78672972).

    [9] The reasons of the Trademark Trial and Appeal Board of the USPTO were issued as an opinion rather than as a formal decision.

17. I note, however, that the Trademark Trial and Appeal Board of the USPTO did not express any opinion as to who authored[10] the word ‘paveway’ in the USA, whether as a trade mark or not, although somewhat ambiguously it states that:

    Ultimately, [the Applicant] qualified to supply laser-guided bombs and began referring to them as ‘Paveway Laser-Guided Bombs’.

    [10] Per Dixon J in The Shell Co of Australia Ltd v Rohm & Haas Co [1948] HCA 27; (1949) 78 CLR 601 (`Rohm & Haas’) at 627-8 : ‘The basis of a claim to proprietorship in a trade mark so far unused has been found in the combined effect of authorship of the mark, the intention to use it upon or in connection with the goods and the applying for registration ... Authorship of course includes claim through or under the author. But it involves the origination or first adoption of the word or design as and for a trade mark.’

18. Whether the Applicant began referring to the Goods as ‘Paveway Laser-Guided Bombs’ because it was adopting and enlarging upon the USAF acronym for the set of standards for the Goods that the USAF had developed or, alternatively, because the Applicant itself had authored and adopted the word is not clear.

19. I do, however, accept the opinion of the Trademark Trial and Appeal Board of the USPTO as establishing that the word ‘paveway’ is generic in the USA.

20. Moreover, it would appear to logically follow from the above discussion of the evidence that there are in fact three traders who may require to use the word ‘paveway’ in the USA (at least) in relation to their sales of the Goods: those are the parties and the US Department of Defense if it engages in FMS sales of the Goods and I note that the latter has in fact so used the word ‘paveway’.[11]  The full article referenced at Footnote 11 mentions the principal contractors Raytheon Missile Systems; Lockheed Martin Aeronautics Company; Lockheed Martin Missiles and Fire Control; Northrop-Grumman Electro-Optical Systems; and, Northrop-Grumman Electronic Systems.  It appears probable that the latter two companies supply major components for the kits.

    [11](US) Defense Security Cooperation Agency press release at

    Section 41

21. Section 41 of the Act provides:

    Trade mark not distinguishing applicant’s goods or services

    41.(1) For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

    Note 1:  For applicant and predecessor in title see section 6.

    Note 2:  If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

    (2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

    Note:  For goods of a person and services of a person see section 6.

    (3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

    (4) Then, if the Registrar is still unable to decide the question, the following provisions apply.

    (5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so  distinguishing the designated goods or services:

    (a) the Registrar is to consider whether, because of the combined effect of the following:

    (i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
    (ii) the use, or intended use, of the trade mark by the applicant;
    (iii) any other circumstances;

    the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

    (b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and
    (c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.

    Note 1:  For goods of a person and services of a person see section 6.

    Note 2:  Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

    (6) If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

    (a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
    (b) in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

    Note 1:  Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

    (a)  the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

    (b)  the time of production of goods or of the rendering of services.

    Note 2:  Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

22. The scheme and operation of section 41 were discussed by Branson J in Blount Inc v Registrar of  Trade Marks [1998] FCA 440; (1998) 83 FCR 50 where she said:

    Subsections (3) to (6) of s 41 of the Act are designed to control the process by which the Registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (“the designated goods or services”). If the trade mark is not so capable, the application for its registration must be rejected (s 41(2)). Subsection (3) requires the Registrar first to “take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons”. Having taken such matter into account, it is theoretically open to the Registrar to conclude:

    (a) that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or

    (b) that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or

    (c) that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the designated goods or services.

    The structure of s 41 of the Act dictates that if the Registrar reaches conclusion (a) above, then he or she will decide the question whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons by reaching the answer that it is so capable by reason of its inherent adaptability to distinguish (s 41(2) and (3)). The Registrar will, in such circumstances, be required, by reason of the terms of s 33(1) of the Act, to accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application.

    If the Registrar reaches conclusion (b) or (c) above, he or she is, within the meaning of s 41(4) “unable to decide the question”. That is, he or she is unable, simply by taking into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services, to answer the question whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons.

    If the Registrar reaches conclusion (b) above, then the provisions of paragraphs (a) and (b) of s 41(6) are brought into operation. If the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the Registrar will not reject the application pursuant to s 41(2). The Registrar will, in such circumstances, accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application (s 33(1)). If the applicant fails to establish that because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the Registrar must reject the application pursuant to s 41(2).

    If the Registrar reaches conclusion (c) above, then the provisions of paragraphs (a), (b) and (c) of s 41(5) are brought into operation. If the Registrar, having considered the combined effect of the matters listed in subparagraphs (i), (ii) and (iii) of s 41(5)(a), is satisfied that the trade mark does or will distinguish the designated goods or services as being those of the applicant, he or she will not reject the application pursuant to s 41(2). The Registrar will, in such circumstances, accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application (s 33(1)). If the Registrar, having considered the combined effect of the matter listed in subparagraphs (i), (ii) and (iii) of s 41(5), is not satisfied that the trade mark does or will distinguish the designated goods as being those of the applicant, the Registrar must reject the application (s 41(2)).

1. The initial step in the process discussed above is, in the words of subsection 41(3), to ‘take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons’.  In Clark Equipment Co v Registrar of  Trade Marks [1964] HCA 55; (1964) 111 CLR 511 at [5], Kitto J said of the assessment of inherent adaptation:

   That ultimate question must not be misunderstood. It is not whether the mark will be adapted to distinguish the registered owner’s goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others. In Registrar of Trade Marks v. W. & G. Du Cros Ltd. (1913) AC 624, at pp 634, 635 Lord Parker of Waddington, having remarked upon the difficulty of finding the right criterion by which to determine whether a proposed mark is or is not “adapted to distinguish” the applicant’s goods, defined the crucial question practically as I have stated it, and added two sentences which have often been quoted but to which it is well to return for an understanding of the problem in a case such as the present. His Lordship said: “The applicant’s chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use.” The interests of strangers and of the public are thus bound up with the whole question, as Hamilton L.J. pointed out in the case of R.J. Lea, Ltd. (1913) 1 Ch 446, at p 463; (1913) 30 RPC 216, at p 227; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.

2. The relevant date for the consideration of inherent adaptation is the filing date of the application to register the trade mark: 20 July 2005[12] (‘the relevant date’).

   [12] Unilever Australia Ltd v Karounos [2001] FCA 1132; (2001) 113 FCR 322 at [13]); Unilever Australia Ltd v Societe Des Produits Nestlé SA [2006] FCA 782; 154 FCR 165; (2006) 69 IPR 255 at [6].

3. The issues, I consider, are these: to what extent, if any, was the word ‘paveway’ used by or known to the particular public in relation to the Goods at the relevant date and, if generally known and used, did the word ‘paveway’ only then signify the genus of the Goods or was it taken to indicate the Goods manufactured by a particular trader?

4. More particularly, was the word ‘paveway’ then used by those in the particular trade as a generic term or as a trade mark?

5. Unfortunately, there are no declarations by the relevant Australian public in the evidence which addresses these issues because of the difficulties in obtaining statutory declarations from either serving members of Australian military forces or civilian employees of the Department of Defence.  However, I consider that Privitera and the affidavit exhibits thereto shed some indirect light on the issues.

6. Mr Privitera is Managing Director of Flight Data Systems Pty Ltd – he states that his current duties include marketing to the Australian Defence Force certain goods made by the Opponent. These goods include the ‘Paveway-variant laser guided bomb kits known as Paveway II and Paveway Dual Mode, Paveway laser guided training rounds, a mission readiness test set, and certain of the Opponent’s related training services.’  Mr Privitera has had these duties since approximately 1997.  He states:[13]

   I have knowledge of these products and services sold by Lockheed Martin and by Raytheon. I have personal knowledge of the perception of the purchaser in Australia with respect to the term ‘Paveway.’

   Military goods such as laser guided bombs are not sold in the same manner as consumer goods. For example, there are no catalogs or advertisements. As noted below, much marketing takes place at international exhibitions or trade shows.

   There is only one potential purchaser of ‘Paveway’ goods and services in Australia, which is the Australian Defence Force.

   The sole purchaser is highly sophisticated and is acutely aware of the sources of the goods and services. Purchases generally total at least several millions of Australian dollars per order. The purchaser may engage in pre-purchase testing and sometimes a visit to the factory at which the goods are made.

   Military sales take place in the context of an entire system of goods that work together.  For example, the ‘Paveway’ goods have electronic systems that must be interfaced with those of the aircraft carrying them.

   I have reviewed the attached affidavits[14] of the U.S. Air Force purchasers for ‘Paveway’ goods and I share the same perception of the term ‘Paveway’ as the U.S. purchasers, specifically that it is a generic, or common industry term, for the goods. It does not indicate a particular source of the goods.

   As in the U.S., there are only a very few individuals responsible for purchases of such goods in Australia. I have informed the individuals at the Australian Defence Force that Lockheed Martin is fully qualified to produce Paveway II goods meeting the Specification.

   The term ‘Paveway’ is not recognized by the Australian armed forces as referring to any particular goods. Indeed, it is synonymous with “laser guided bomb,” and ‘Paveway’ itself means the technology that primarily uses lasers to guide a bomb to a target. Thus, the training rounds incorporate ‘Paveway’ technology.

   [13] Privitera paragraph 4 et seq.

   [14] Privitera Exhibit A: Affidavits of Curtis Cummings with Exhibits A – C; and, Steven Oakson with Exhibit A.

7. Mr Privitera’s declaration is couched in the present tense and might be perceived as not adverting to the history of the use of the word ‘paveway’ in Australia.  However, he does declare that he has performed his duties since 1997 which is before the use of the word ‘paveway’ in Australia by both parties.  Further, he states that he shares the views of the USAF employees whose affidavits are exhibits to his declaration.

8. Curtis Cummings is the USAF contracting officer for the Paveway II Program and has held that position since May 2004.  In his affidavit, deposed for the USPTO, Mr Cummings variously affirms:

   In my position as contracting officer, I manage the purchase of Paveway II goods for the entire US military. I manage the procurement of goods under Contract F42630-03-D-0005, which calls for indefinite delivery and indefinite quantities of Paveway II goods from [the Applicant] and [the Opponent] W42630-03-D-0005 is LMC’s contract.  Raytheon’s contact is F42630-03-D-0001. They are essentially identical contracting documents with the differences being the company-unique part/stock numbers and terminology. This is referred to as the ‘Paveway II IDIQ Contract.’ The total contract value contemplated is $2 billion, with individual orders awarded over the course of seven years.[15]

   In its contracts and correspondence with [the Applicant] and [the Opponent] for the supply of laser guided bomb kits, the Air Force uses ‘Paveway’ with each source, to designate the product.[16]

   Based on my experience, the term ‘Paveway II’ is used within the Air Force simply as another way to say ‘Laser guided bomb kit.’ It does not indicate a particular source of the goods to us as the purchaser.

   ‘Paveway’ itself is also understood by me and those involved with it to mean the technology that primary uses lasers to guide a bomb to a target.

   [15] Cummings-  paragraph 4.

   [16] Ibid - paragraphs 14 et seq.

9. Mr Oakson is Mr Cummings’s supervisor – he affirms: [17]

   In its contract and correspondence with [the Applicant] and [the Opponent] for the supply of laser guided bomb kits, the Air Force uses ‘Paveway’ with each source, to designate the product.

   The Air Force does not use ‘Paveway’ as a stock item name. All stock names relate to the CCG or the AFG, and therefore to the individual manufacturer of the part of the kit. The kit parts are interchangeable, so that in the field, [the Opponent’s] CCG might be matched to [the Applicant’s] AFG, or vice versa. Together, either CCG plus either AFG might be referred to as a Paveway II kit.

   Based on my experience, the term ‘Paveway II’ is used within the [US] Air Force simply as, another way to say ‘laser guided bomb kit.’  It does not indicate a particular source of the [Goods].

   [17] Oakson - paragraph 10 et seq.

10. Whilst the affidavits of Mr Cummings and Mr Oakson relate to the US marketplace for the Goods, it is worthy of note that Mr Privitera states that he shares the same perceptions of the use of the word ‘paveway’ within the Australian marketplace.

11. In seeking evidenced instances of use of the word ‘paveway’ known to or within the Australian marketplace before the relevant date, I have made the assumption that most major international defence journals will be available to and read by the small group of people who constitute the Australian marketplace.  In my observations of the world the people who constitute the marketplace are likely not only to keep themselves informed as to the matériel available to them but also be provided digests of such information by their employers.  Further, there is a high emphasis placed on inter-operability of weapon systems by the US and its allies and the Australian marketplace therefore keeps itself well-informed about the weapons systems that the US and its allies are purchasing.  Four examples of such publications from those in evidence are:

    1.      Defense Daily International February 6, 2004[18]

    [18] Pericci – Exhibit 6.

    HEADLINE: Australia Plans Modernization of Strike Weapons In Defence Capability Plan

    […]

    Potential prime contractors include Boeing [BA], Raytheon [RTN] and Lockheed Martin [LMT]. Boeing is likely to offer its GPS/INS-aided Joint Direct Attack Munition (JDAM) guidance kit, with Raytheon and Lockheed Martin offering their versions of the Paveway family of laser-guided bomb (LGB) kits. Raytheon could also offer its GPS/INS/LGB Enhanced Paveway family as well. A decision is slated for between this year and FY ‘05, with in-service delivery targeted between 2008 and 2010.

    2.      Defense Daily November 9, 2005 Wednesday[19]

    HEADLINE: Lockheed Martin Awarded $65 Million Contract For Navy Paveway II

    The Navy has awarded [the Opponent] a $65 million contract to develop, qualify and produce the Pave-way LI Dual Mode Laser Guided Bomb (DMLGB), the next•generation precision-guided weapon system, according to a company release.

    […]

    [The Opponent] will upgrade the Navy’s inventory of legacy Paveway I ldts by replacing an existing Computer Control Group (CCG) system with. an Inertial Navigation System/Global Positioning System (INS/GPS), an all-weather guidance system that provides dual-mode guidance capability.

    3.Aerospace Daily & Defense Report October 27, 2004 Wednesday[20]

    [19] Serra – Exhibit 10.

    [20] Op cit.

    HEADLINE: Raytheon delivers 250,000th LGB; Paveway effort began in ‘68

    Raytheon. Co, said it delivered its 250,000th Paveway laser-guided bomb in ceremonies on Oct 26. Deliveries of Raytheon-built Paveways began in 1968.

    Lockheed Martin has delivered 25,000 units. The company has been producing Paveways since early 2002, after getting approval to build the kits to compete with longtime supplier Raytheon (DAILY, March 1, 2001). Government officials have said that having two production lines saves money and keeps quality high.

    “Delivering the 250,000th Paveway is a huge accomplishment, but the successful effort to ramp up production five-fold to support warfighter needs after 9/11 is another reason to celebrate. This shows the value of Paveway to the warfighter,” Maj. Jose Delarosa, Air Force Paveway II program manager at Hill Air Force Base, Utah, said in [an] announcement.

    4.Aerospace Daily March 20, 2003

    HEADLINE: Base-year Paveway contract promises intense competition ahead

    Both contractors sharing a $281 million Air Force contract to built Paveway II laser-guided bomb kits each say they are in a good postion to gain market share after the base year of the award.

    […]

    The Air Force plans to award up to $2 billion for Paveway II production over a seven-year period, starting in fiscal 2003.

12. It is most unlikely that within the small, well-educated market within Australia the generic nature of the word ‘paveway’ exemplified in the examples above was not known and accepted.  Further, the examples show that the parties, as well as the journalists who wrote the articles, were using the word ‘paveway’ in this manner as was the USAF.

13. I have noted that there are three traders who are, or who potentially are, in the trade of supplying the Goods to Defence: the parties and the US Department of Defense via the FMS program.

14. Prior to the relevant date, both the Opponent and the US Department of Defense appear from the evidence to have been consistent in their use of the word ‘paveway’ only as a generic term in relation to the Goods: that is, to describe a family of laser guided bomb kits such as Paveway II.

15. The earliest uses of the word ‘paveway’ which carry a trade mark claim by the Applicant date from late 2004.  These dates substantially post-date the first use of the word ‘paveway’ by the Opponent within Australia in 2003.  The extent to which the relevant personnel of Defence might have been exposed to the Applicant’s trade mark claims is not clear.

16. More importantly, however, there is a clear need for other traders to be free to use the word ‘paveway’ in respect of their similar Goods as it appears to be the only generally used description of the Goods.

17. As such, the trade mark PAVEWAY lacks any inherent adaptation[21] to distinguish the Goods and the matter thus falls for my consideration under the provisions of subsection 41(6).

    [21] Decisions such as Linoleum Manufacturing Co v Nairn (1878) 7 Ch D 834; Re Application By Siemens Aktiengesellschaft (1983) 1 IPR 1 and Re Windsurfing International Inc’s Application (1978) 48 AOJP 4568 show that, where a word is or has become generic in relation to goods, it is not adapted to distinguish those goods as a trade mark.

18. Under subsection 41(6) I am to consider whether the Applicant has established that, because of the extent to which it had used the trade mark before the relevant date, the trade mark did as of that date distinguish the Goods as being those of the Applicant: if so, the trade mark is taken to be capable of distinguishing the Goods from the goods or services of other persons.

19. The Applicant has since late 2004 been assiduous in placing a trade mark claim beside the word ‘paveway’ wherever it has appeared in the Applicant’s literature.  However, in the face of competing generic use – or the requirement for such use – by other traders such claims are of no immediate avail.  The situation is somewhat analogous to that addressed by the remarks of Lord Davey in Cellular Clothing Co Ltd v Maxton & Murray [1899] AC 326:

    ... where a man produces or invents ... a new article and attaches a descriptive name to it – a name which, as the article has not been produced before, has, of course, not been used in connection with the article – and secures for himself either the legal monopoly or a monopoly in fact of the sale of that article for a certain time, the evidence of persons who come forward and say that the name in question suggests to their minds and is associated by them with the plaintiff’s goods alone is of a very slender character...

20. The Applicant’s claims are of a similar ilk – the claims alone do not change the character of the word.

21. The problem for the Applicant is plain: the word ‘paveway’ is simply the generic name of the Goods and it matters not how much it is used, it cannot be turned into a trade mark: Justice Jacobs explained in British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281:

    There is an unspoken and illogical assumption that “use equals distinctiveness”. The illogicality can be seen from an example; no matter how much use a manufacturer made of the word “Soap” as an unsupported trade mark for soap the word would not be distinctive of his goods.

22. The Opponent has established its ground under section 41 of the Act.

    Decision

23. Subsection 55(1) of the Act provides:

    55Decision

    (1)Unless the proceedings are discontinued or dismissed, 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. I refuse to register application 1065708.

    Costs

25. The Opponent is entitled to its costs which I order against the Applicant at the Official Scale set out at Schedule 8 to the Trade Mark Regulations 1995.

    Iain Thompson
    Hearing Officer
    Trade Marks Hearings
    7 November 2012

    
    

(WASHINGTON, September 29, 2008)
On September 26, DSCA notified Congress of a possible Foreign Military Sale to Greece of Enhanced PAVEWAY II Kits and Sustainment Support for F-16 Aircraft.