M2 Technology Pty Ltd v Messages on Hold Pty Ltd

[2007] ATMO 57

TRADE MARKS ACT 1995

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

Re:Application for registration 1087277(9)(35) MESSAGES ON HOLD by Messages on Hold Pty Ltd and opposition thereto by M2 Technology Pty Ltd.

Delegate:

Iain Thompson

Representation:

Opponent

Sherrie Heather of Patent Attorney Services .

Applicant

Tim Coil of Counsel instructed by Lavan Legal

Decision:

2007 ATMO 57.

1. Section 52 opposition – section 41, grounds under section 41 made out application refused.

2. Costs ordered against applicant.

Background

1. Messages on Hold Pty Ltd, of East Perth, Western Australia, ‘the applicant’ or ‘the owner’ in these proceedings, has applied to register a trade mark, current details of which appear below:

   Appn No:  1087277

   Priority Date:  24 November 2005

   Goods/Services:              Class: 9 Digital announcers, digital memory chips for storing audio, answering machines that play downloaded recorded announcements mixed with music

   Class: 35 Recording services namely recording announcements read from customised script for advertising and promotional services

   Trade Mark:  MESSAGES ON HOLD

   ‘the trade mark’

   Endorsements:                Provisions of subsection 41(5) applied.

2. Following examination, the application was accepted for possible registration and advertised as such in the Australian Official Journal of Trade Marks on 23 March 2006.  On 23 June 2006, M2 Technology Pty Ltd filed Notice of Opposition (‘the Notice’) to the registration of the trade mark. 

3. The parties have served and filed evidence in answer and evidence in reply, which I will further discuss below.  The opponent did not file evidence in support.  As a delegate of the Registrar of Trade Marks, I heard the parties at a hearing in Perth on 20 July 2007.  Sherrie Heather of Patent Attorney Services represented the opponent; Tim Coil of Counsel, instructed by Lavan Legal, appeared for the applicant.

   Evidence

4. The grounds pursued by the opponent go to sections 41, 58 and 62 of the Trade Marks Act 1995.  The opponent’s evidence, which it argues goes to these grounds, are two statutory declarations, one by Julie Green and the other by Sherrie Heather.  The applicant’s evidence is a statutory declaration by Kim Illman.  For the sake of simplicity in this discussion, I will discuss the evidence in general terms here and more specifically under the individual grounds.

5. The parties to this matter have for some time been using the term MESSAGES ON HOLD in relation to goods and services which involve the recording of a message onto tape, a microchip or other media for playback when a telephone caller is placed on hold by an operator, or by an automated telephone answering system.  The content of these messages is typically, I gather, advertisements or information about the goods or services of the organization on whose telephone system it is installed.

6. The applicant has the perception that the term MESSAGES ON HOLD has come to designate its goods and services.  The opponent’s perception is that the term MESSAGES ON HOLD is generic of the goods and services in question, or, if not, a person other than the applicant had first use of the trade mark – and thus that the applicant is not the owner of the trade mark.

   Section 41

7. Section 41 of the Act provides a scheme for the assessment of the inherent qualities of a trade mark insofar as its capacity to distinguish the goods or services of one trader from the similar goods or services of another trader. The operation of this section was discussed by Branson J in Blount Inc v Registrar of Trade Marks [1998] 440 FCA.  Branson J stated:

   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).

8. Bearing in mind the stricture in subsection 41(2) – that 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 from the goods or services of other persons – the first step is to consider, in terms of subsection 41(3), “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.”

9. As noted by Branson J in Blount, above, the classic test of whether a trade mark is adapted to distinguish is in Clark Equipment Company v Registrar of  Trade Marks (1964) 111 CLR 511 at 514, where Kitto J put the test under the 1955 Act as follows:

   "[T]he question whether a mark is adapted to distinguish [is to] 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."

10. Both Ms Green and Ms Heather append various materials to their declarations which are said to show that the term MESSAGES ON HOLD are, in effect, generic of the goods and services of this opposed application.  Ms Heather says in her declaration:

    The term MESSAGES ON HOLD has been used and accepted, as the common term for digital recorded voice announcements systems within the telecommunications industry from a time prior to the date of application of the Opposed trade mark, Australian Trade Mark Application Number 1087277, and/or Australian Trade Mark Registration Numbers 952389 and 952462. Annexed to the Statutory Declaration by June Green dated 15 May 2007, which forms part of the Opponents Evidence in Answer, are copies of various letters dating from 1998 to the present time which support this statement

    Annexed hereto and marked Annexure A is a copy of a document dated 26 March 2007 accessed from the Telstra Brand website located at which shows the an example of current use of the "Messages on Hold" words to describe the Telstra Message on Hold Service.

    Further, annexed hereto and marked Annexure B is a copy of a sample of the search results returned from an Internet Search using the GOOGLE Search Engine. 41,600,000 results were recorded for the term "Message on Hold".

11. I have attempted to replicate the Google search for the expressions “Message on Hold” and “Messages on Hold” without obtaining similar results. This problem, or inconsistency with the evidence, while it does not affect my findings in this matter, is one of simple explanation.  A search for the expression Message on Hold, without inverted commas around it, on Google will return results, or ‘hits,’ of any page which contains either the word ‘Message’ or ‘Hold’ or both – with the first several thousand which contain the expression ‘Messages on Hold’ being listed at the top of the search result.  However, a search for the expressions “Messages on Hold” or “Message on Hold” with the inverted commas present in the search will yield results or ‘hits’ in which only that exact expression appears – these results are 137,000 and 96,500 respectively when searched worldwide.  The same search yields 623 hits for the expression “Message on Hold” and 53,400 for the expression “Messages on Hold” when the results are restricted to the domain ‘.au’ and hence predominantly Australian websites.

12. The first few results are illustrative of the general tenor of the results of the Google search.

13. The website onholdadvertising.com.au has a large banner MESSAGES ON HOLD and explains elsewhere on the site:

    People often think that an on hold message is the greeting when a phone system answers a call. For example, when a pre-recorded message says "Thank You for calling ABC, your call is important, please hold".

    This is not messages on hold but rather a phone system feature called "Auto Attendant". On Hold Advertising is the message that plays to callers after the phone system has answered. The two, although different technology, go hand-in-hand!

14. The website theonholdcompany.com.au has a message that says:

    When callers are put on hold, you have an exclusive and captive audience.  You can captivate callers, sound fantastic and increase sales with messages on hold OR do nothing.  Simple choice isn't it!

15. The website adsonline.com.au has a banner Messages on Hold at the top of the page and the first page contains the explanation:

    Messages on Hold with Ads Online - Australia should be making money from your investment as quickly as possible and that is why you need the most affordable Messages on Hold package available in Australia.

    Some Messages on Hold services offer "deals" which involve tied in contracts costing thousands of dollars a year on the promise of "unlimited productions" - but many customers seldom need to change their ad - for those customers who like to get it right the first time, the "Unlimited Production" deal is simply a waste of money for your Messages on Hold.

16. And the website evolvedsound.com.au proffers:

    Welcome to Evolved Sound 

    Evolved Sound delivers industry leading Telephone On Hold Messaging, IVR, Voice Overs & Music On Hold services. 

    We also offer specialist audio products to suit applications including Messages On Hold, Sound Recording & Digital Music Production.

    So for a Sound Solution that meets your budget, browse our website or contact us today.

17. There are many other sites with similar content.  Thus, the answer to the above question posed in Clark by Kitto J is ‘yes’: the term is one which other traders would need or require to use in the normal course of trade, and without improper motive, to describe their similar goods and services.

18. An explanatory footnote to subsection 41(6) of the Act states:

    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.

19. I think that the evidence of the use of the expression in the opponent’s dealings with its clients is suggestive but not compelling.  However, the appearance of the expression MESSAGES ON HOLD on the website of Telstra and on many results on the Google search, some of which are briefly described above, is, I consider, compelling evidence that the expression MESSAGES ON HOLD has no inherent adaptation to distinguish the applicant’s goods and services and that the ground for rejection rightfully belongs under subsection 41(6) of the Act.

20. Subsection 41 (6) of the Act provides:

    (6)      If the Registrar finds that the trade mark is not 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.

21. The applicant’s evidence shows that it almost invariably uses the trade mark in the following form or in one similar to it – for example with the word ‘Australia’ omitted, or with the words appearing side-by-side:

22. This particular ‘logo-form’ trade mark is registered – brief details of the registration appear below.

    Appn No:  952389

    Priority Date:  2 May 2003

    Goods/Services:              Class: 9 Digital announcers, digital memory chips for storing audio, answering machines that play downloaded recorded announcements mixed with music

    Class: 35 Recording services namely recording announcements read from customised script for advertising and promotional services

    Endorsements:                Provisions of subsection 41(5) applied.

23. The applicant is well known for its tactic of ambush marketing.  This involves the prominent placement of a trade mark amongst the crowd at sporting and other public events – on umbrellas behind goalposts, on banners held by scantily dressed models, and so forth, where they will attract attention, be recorded or broadcast by the media.  There is no doubt that the ploy has been quite successful in bringing the applicant considerable publicity for its trade mark.  But, and this is a big ‘but’, the publicity that the applicant has received is predominantly for the ‘logo-form’ trade mark.

24. There is also no doubt from the evidence before me that the applicant has attempted to enforce what it perceives as its rights in the plain words MESSAGES ON HOLD against various other traders.  However, the success with which it has apparently done so is in the absence of judicial finding in its favour and might be explained in large part by the slowness of traders to involve themselves in expensive litigation rather than an appreciation of any rights in the expression MESSAGES ON HOLD.

25. In the end, the question which I must consider under subsection 41(6) is very similar to the one under subsection 41(3):  has the applicant shown that, because of the extent of its use of the trade mark MESSAGES ON HOLD, it is unlikely that other traders would, without improper motive, use the expression for the sake of their ordinary meaning in relation to their similar goods or services, in a manner which would infringe the trade mark if it were registered?  Has, in effect, the expression developed a secondary meaning such that it denotes the goods and services of the applicant?

26. The answer to these questions is most obviously, ‘no’.  In fact the evidence shows little use of the trade mark by the applicant in the form of the plain words MESSAGES ON HOLD.  The evidence also shows that these words are in widespread use by many traders in relation to the goods and services in question.

27. Accordingly, the trade mark is not capable of distinguishing the applicant’s goods and services in terms of subparagraph 41(6)(b) and I refuse to register application 1087277 in terms of section 41(2).

    Other

28. I understand that the other grounds argued at the hearing were, essentially, a fall-back position adopted by Ms Heather. In view of the clear weight of the evidence in terms of section 41, above, any discussion of the grounds under sections 58 and 62 would be otiose.

    Costs

29. The opponent, having been successful in these proceedings, is entitled to its costs which I
    award against the applicant at the official scale.

    Iain Thompson

    Hearing Officer

    Trade Marks Hearings

    10 September 2007