Mahogany Designs Limited v James William Charles

[2000] ATMO 92

TRADE MARKS ACT 1995

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

Re:Opposition by Mahogany Designs Limited to registration of trade mark application 780131(42) - MAHOGANY HAIR - filed in the name of James William Charles and Paul Hocking.

Background

This application arises out of the filing, on 4 December 1998, by James William Charles and Paul Hookings of application 780131.  The trade mark was subsequently assigned to Mr James William Charles ('the applicant').  The application seeks registration of the trade mark MAHOGANY HAIR in relation to 'Hairdressing and beauty services' in Class 42.

Following examination of the application, it was accepted on 23 February 1999 and advertised as such in the Australian Official Journal of Trade Marks.  On 1 April 1999, Mahogany Designs Limited ('MDL') filed Notice of Opposition to the registration of the trade mark.  The relevant grounds of opposition stated in the Notice will emerge sufficiently from my reasons below.

On 1 January 2000, having sought and received extensions of time in which to do so, MDL filed evidence in support of its opposition.   The applicant did not serve any evidence in answer, nor has he filed application for extension of time in which to do so.

Accordingly, the issue was heard in Sydney before me as a Delegate of the Registrar of Trade Marks on 25 July 2000.  Mr Trevor Stevens, of Davies Collison Cave, Patent and Trade Mark Attorneys, appeared for MDL.  The applicant attended the hearing and subsequently cancelled the cheque that paid the hearing fee; the effect of this is that I am obliged to disregard his submissions.  However, the applicant obviously has a strong sense of grievance, and, for his peace of mind, I will briefly touch on his argument under the heading 'other', below.  Before outlining Mr Stevens' arguments, I will discuss the evidence.

The evidence

The evidence consists of a statutory declaration by Russell John Barker ('the Barker declaration').  Mr Barker is the company secretary of MDL, a British company of Oxford, and has been since 1988.  MDL is the successor in business to a partnership that started in 1979 between Martin Gannon and Richard Thompson.  Messrs Gannon and Thompson are hairdressers and started a hairdressing business together in Oxford, under the trade mark MAHOGANY.  They developed an hairdressing style which the Barker declaration says is unique and recognisable; the success of this led to the opening of four further salons - these are in up-market areas of Oxford, Bath and London.  They have also established a training school.  MDL now has a staff of approximately 100 in the United Kingdom.

The MDL hairdressing services have been featured on television in BBC's Style Challenge, the GMTV show (which I understand to be a British television program in the 6-9am time-slot), Central Television, the BBC Clothes Show, The Alternative Hair Show and Channel 7 in Australia.  The dates of these screenings are not given.

The services offered under the trade mark have been featured at major fashion, photographic and hairdressing shows in the United Kingdom as well as hairdressing and beauty shows in the United States, Australia, Canada, France, Germany, Holland, Israel, Italy, Japan, Norway, Singapore, Spain and Sweden.

MDL sells a range of goods which bear the trade mark MAHOGANY at its salons in the United Kingdom.  These products include hairbrushes, rucksacks, t-shirts, hair-dryers, books and videos.  Exhibits 2 and 3 to the Barker declaration show examples of a retail bag and the range of goods sold by MDL.  The trade mark also appears on MDL's appointment cards, postcards, Christmas cards, gift vouchers, price lists, ticket pads, business cards and letterheads: these are shown at Exhibit 1 to the Barker declaration.

MDL's hairdressing services under the trade mark MAHOGANY were featured at the Beauty, Hair & Natural Therapies Fair in Brisbane from 13 to 15 March 1998.  Under the trade mark MAHOGANY, Richard Thompson released the 'new spring collection' - I understand from this that he presented a new range of hairdressing styles under the trade mark MAHOGANY.  Richard Thompson launched a range of hair colouring products at the same time and presented a seminar under the title "The Power of Mahogany".  Exhibit 4 shows a poster and other promotional material relating to the Fair.

Richard Thompson also staged the Australian launch of a book entitled Mahogany Hairdressing at that time.  Extracts of the book appear at Exhibit 5 to the Barker declaration.

Since 1997, MDL placed full page advertisements featuring the trade mark MAHOGANY in the Australian Hairdressers Journal ('the Journal').  These advertisements appeared in the issues dated March 1997, February 1998, March 1998, May 1998 and March 1999.  The Barker declaration avers the circulation of the Journal to be in the range 12,754 to 18,212 for these issues; and, that subscribers to the Journal are generally hairdressing salons and beauty parlours.  The advertisements are shown at Exhibit 6 to the Barker declaration.

The trade mark is also featured in Highlights, another Australian hairdressing trade magazine below photographs of models: these items appear in issues of Highlights dated June 1995, December 1996 and June 1997.

The Submissions

Mr Stevens addressed the provisions of sections 58, 60 and 62(b) of the Trade Marks Act 1995 ('the Act') and, in regard to sections 58 and 60, drew my attention to relevant case-law. However, I will confine my reasons to sections 58 and 60.

Reasons

Section 58 of the Act provides:

Applicant not owner of trade mark

58. The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

Note:  For applicant see section 6.

Section 6 of the Act states:

Definitions

6. In this Act, unless the contrary intention appears:

applicant, in relation to an application, means the person in whose name the application is for the time being proceeding.

The term 'owner' for the purposes of the Act has the same meaning as the word 'proprietor' used in relation to the Trade Marks Act 1955.

In Hicks's Trade Mark, (1897) 22 VLR 636 (at 640) Holroyd J stated:

In order to substantiate his application to be placed on the Register for this word, he must have claimed to be the proprietor, and the word "proprietor" must be taken to mean the person entitled to the exclusive use of that name.  If there is anyone else who would be interfered with by the registration ... in the exercise of a right which such person has already acquired to use the same word in application to the same kind of thing, then Hicks ought not to have been put on the Register for that trade mark.

The expressions in Hicks case, above, 'the same kind of thing' and 'the same word' have come to mean 'the same goods or services' and 'a substantially identical trade mark'.  Gummow J discussed 'substantial identity' in Carnival Cruise Lines Inc. v Sitmar Cruises Limited (1994) AIPC 91-049; (1994) 120 ALR 495, and said, referring to The Shell Company of Australia Limited v Rohm and Haas Company (1949) 78 CLR 601:

... it does not supply any general authority for the proposition that in the case of disputed claims to proprietorship under the present statute anything less than substantial identity between the two marks will suffice.

In short, the question which faces me (without any evidence of earlier use of the trade mark filed by the applicant) is: 'did MDL have authorship and any use of a trade mark in Australia substantially identical to that of the applicant in respect of the services of this application before 12 December 1998, the priority date of this application?'

Concerning the 'use', Deane J explained in Moorgate Tobacco Co Ltd v Philip Morris Ltd (1984) 156 CLR 414 at 432-433:

The prior use of a trade mark which may suffice, at least if combined with local authorship, to establish that a person has acquired in Australia the statutory status of “proprietor” of the mark, is public use in Australia of the mark as a trade mark, that is to say, a use of the mark in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods with respect to which the mark is used and that person (see, generally. Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 423–4; Re Registered Trade Mark “Yanx”; Ex parte Amalgamated Tobacco Corporation Ltd (1951) 82 CLR 199 at 204–5; and the definition of “trade mark” in s.6 (1) of the Trade Marks Act. The requisite use of the mark need not be sufficient to establish a local reputation and there is authority to support the proposition that evidence of but slight use in Australia will suffice to protect a person who is the owner and user overseas of a mark which another is seeking to appropriate by registration under the Trade Marks Act. In such a case, the court “seizes upon a very small amount of use of the foreign mark in Australia to hold that it has become identified with and distinctive of the goods of the foreign trader in Australia”. (see Seven Up Co v OT Ltd (1947) 75 CLR 203 at 211;; [1947] ALR 436 at 437; Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 400)

The word 'goods', used in the above quote from Moorgate, is, in the context of this application, interchangeable with the word 'services'.

The test for substantial identity is the familiar one set out by Windeyer J in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414–15:

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison …

The two trade marks at issue here are MAHOGANY and MAHOGANY HAIR and the contextual setting is that of hairdressing and beauty services.  Cases where substantial identity has been found include: Kendall Co v Mulsyn Paint & Chemicals  (1963) 109 CLR (POLYKIN and POLYKEN); Seven Up Company v O.T. Ltd (1947) 75 CLR 203 ('7UP in a circle' and '8UP in a square'); Pelican Trade Mark [1978] RPC 424 (PELICAN and PELIKAN); Pelikan International Handelsgesellschaft MbH & Co Kg v Lifinia Pty Ltd (1994) 30 IPR 615 (PELICAN and PELIKAN); Shachihata Industrial Co Ltd v Magic Marker Corp (1984) 3 IPR 519 (LIQUID CRAYON and LIQUID CRAYONS); Re Applications By Stratco Metal Pty Ltd (1984) 4 IPR 48 (CLICKFAST and KLICK-FAST); Michael Sharwoood & Partners Pty Ltd And Others v Fuddruckers Inc (1989) 15 IPR 188 (FUDRUKKERS and FUDDRUCKERS); Re Application By Jacuzzi Inc (1990) 17 IPR 414 (AERO and AEROSPA - on spa equipment); Re Application By Fastrack Racing Pty Ltd (1994) 29 IPR 193 (FASTRACK and FAST TRACK); Sportscraft Consolidated Pty Ltd v General Sportcraft Co Ltd (1993) 27 IPR 74 (SPORTCRAFT and SPORTSCRAFT); Alexander v Tait-Jamison (1993) 28 IPR 103 (ECO-FARM and ECO-FARMS); Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 (FUNSHIP and FUN SHIP); Warner-Lambert Co v Harel (1995) 32 IPR (DERMOFILM and DERMAFILM); and Bull SA v Micro Controls Ltd (1990) 19 IPR 299 (MICROL and MICRAL).

To contrast the above decisions, the following trade marks have been found to be neither 'substantially the same mark' nor 'substantially identical': “Otrivin” Trade Mark [1967] RPC 613, (OTRIVIN and OTRIVINE); Lonza Ltd v Kantfield Pty Ltd (T/A Martogg & Co) (1995) 33 IPR 396 (FORTEX and FOREX); Photo Disc Inc v Gibson And Another (1998) 42 IPR 473 ('PHOTO-DISK' - with descriptive phrase and arabesques and PHOTODISC), although in the latter decision, the Deputy Registrar observed that if the trade marks had been PHOTO-DISK and PHOTODISC, solus, she would have found that the trade marks were substantially identical.

I consider that, in the context of hairdressing and beauty services, the addition of the word HAIR to the word MAHOGANY does not substantially affect the identity of the latter word as a trade mark and that they are, therefore, substantially identical trade marks.  To explain this conclusion further: in QH Tours Limited v The Mark Travel Corporation [1999] ATMO 31 (2 April 1999) I said that:

I think that, as the registration of the FUNJET SERVICE trade mark is in respect of 'services', the word SERVICE is not an addition or alteration that substantially affects the identity of the word FUNJET. Or, alternatively, that the omission of the word SERVICE is an alteration that does not substantially affect the identity of the trade mark FUNJET SERVICE.

This view is corroborated by the Registrar's practice in relation to section 51 of the Trade Marks Act 1995 which allows:

51.(1) A person may make a single application under subsection 27(1) for the registration of 2 or more trade marks in respect of similar goods or similar services within a single class if the trade marks resemble each other in material particulars and differ only in respect of one or more of the following matters:

.....

(d) any matter that is not inherently adapted to distinguish the goods or services and does not substantially affect the identity of the trade marks.

The tests under section 51, because they deal with 'substantial identity', offer illumination of the tests under section 100(3) which specifies "additions or alterations not substantially affecting ... identity". In this regard I note that the Registrar has accepted for registration the trade marks listed below as being 'series' trade marks:

550903 (42)	COMPUSERVE	COMPUSERVE INFORMATION SERVICE
618323 (37)	VIP	VIP HOMES SERVICES
618324 (37)	VIP	VIP HOME SERVICES
714906 (42)	VIP	VIP HOME SERVICES
725577 (36)	WIZARD	WIZARD FINANCIAL SERVICES

The word HAIR falls, in the context of the applicant's services, very much into the same category of indicia as do the words HOME SERVICES for domestic cleaning services or the words FINANCE SERVICES for investment advice.

I accept that the placement by MDL of advertisements of their services under their trade mark MAHOGANY in Australian hairdressing magazines constitutes authorship of the words in Australia in relation to the services, before the priority date of this application: Malibu Boats West, Inc v Catabese [2000] FCA 1141 at para 34. I also accept that the various uses of the word MAHOGANY by Richard Thompson in relation to services while he was in Australia on behalf of MDL, prior to the priority date of this application, was a use of the trade mark in relation to the services claimed. In Moorgate, above, at para 20, Deane J observed:

The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark. It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark (Re Registered Trade Mark “Yanx” ; Ex parte Amalgamated Tobacco Corporation Ltd[1],  supra, at 204–5) or that the mark has been used in an advertisement of the goods in the course of trade (Shell Co of Australia v Esso Standard Oil (Australia) Ltd)[2]. In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade. In the present case, there was not, at any relevant time, any actual trade or offer to trade in goods bearing the mark in Australia or any existing intention to offer or supply such goods in trade. There was no local use of the mark as a trade mark at all; there were merely preliminary discussions and negotiations about whether the mark would be so used

[1] (1951) 82 CLR 199

[2] (1961) 109 CLR 407

It is not clear from the evidence here that the services were offered in trade, but I distinguish this case from the use found wanting in Moorgate, above.  Here there was considerable advance publicity within Australia concerning Richard Thompson's displays of the services offered under the trade mark at the Beauty, Hair & Natural Therapies Fair.  These displays were both to the public attending the fair and those in the hairdressing trade.  I am satisfied that the displays of the services under the trade mark were of a commercial nature and, to paraphrase words from Sizzler Restaurants International Inc v Sabra International Pty Ltd (1990) 20 IPR 331, MDL 'had exposed its use of the trade mark MAHOGANY to the Australian public'.

Thus, MDL had authorship and use of the trade mark MAHOGANY, a substantially identical trade mark to MAHOGANY HAIR, before the priority date of this application.

The opposition to the registration is therefore successful in terms of section 58 of the Act.

Section 60

Section 60 of the Act provides

Trade mark similar to trade mark that has acquired a reputation in Australia

60. The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had 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 1:  For deceptively similar see section 10.

Note 2:  For priority date see section 12.

Section 10 defines deceptive similarity in the following way:

Definition of deceptively similar

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

In terms of subparagraph 60(a), I should first look at the extent of the reputation of MDL's trade mark in Australia.  I have already found that the trade marks at issue are substantially identical.  In terms of subparagraph 60(b), I should then consider whether, because of the reputation of MDL's trade mark, the use of the applicant's trade mark would be likely to confuse or deceive.  The relevant date at which the reputation should be assessed is the date of application.

I note that the bulk of the use of MDL's trade mark has been overseas, but with significant exposure in Australia through the magazines and the hairdressing and beauty fair referred to in MDL's evidence.  I further note that the services of both parties are in the fashion industry where reputations are established quickly and careful eye is kept on trends and developments, not only in this country but also overseas.  In Re: ConAgra Inc. v McCain Foods (Aust) Pty Ltd No. G312 of 1991 FED No. 176 (1992) 23 IPR 193, (1992) AIPC 90-892 (extract), (1992) 106 ALR 465, (1992) 33 FCR 302, Lockhart J stated:

115.  It is no longer valid, if it ever was, to speak of a business having goodwill or reputation only where the business is carried on. Modern mass advertising through television (which reaches by satellite every corner of the globe instantaneously), radio, newspapers and magazines, reaches people in many countries of the world.  The international mobility of the world population increasingly brings human beings, and therefore potential consumers of goods and services, closer together and engenders an increasing and more instantaneous awareness of international commodities. This is an age of enormous commercial enterprises, some with budgets larger than sovereign states, who advertise their products by sophisticated means involving huge financial outlay.  Goods and services are often preceded by their reputation abroad.  They may not be physically present in the market of a particular country, but are well known there because of the sophistication of communications which are increasingly less limited by national boundaries, and the frequent travel of residents of many countries for reasons of business, pleasure or study.

Also in ConAgra, above, Gummow J said:

74.  In my view, where the plaintiff, by reason of business operations conducted outside the jurisdiction, has acquired a reputation with a substantial number of persons who would be potential customers were it to commence business within the jurisdiction, the plaintiff has in a real sense a commercial position or advantage which it may turn to account.  Its position may be compared with that of a plaintiff who formerly conducted business within the jurisdiction and has retained a reputation among its erstwhile customers, and with that of a plaintiff with a reputation which arises from its trade in the jurisdiction, but extends to goods or services which are not presently marketed by him. If the defendant moves to annex to itself the benefit of such a reputation by attracting custom under false colours, then the defendant diminishes the business advantage of the plaintiff flowing to it from the existence of his reputation.  This is so whether the plaintiff is a party which may expand into a new field of business or resume a former business conducted in the jurisdiction, or a party which may enter the jurisdiction to establish a business for the first time.  The immediacy and intensity of the intention of the plaintiff to commence or resume business is, in my view, a question going not so much to the invasion of the plaintiff's rights as to the imminence of a threat sufficient to justify an injunction.  The bad faith of the defendant will not be sufficient to confer rights upon a plaintiff where the necessary reputation in the jurisdiction is lacking.  Further, in my view, in these cases the presence of bad faith on the part of the defendant is not an additional requirement which is to be satisfied by the plaintiff; fraud in the sense of persistence after notice of the plaintiff's rights will suffice.

I note that MDL has projected its trade mark as a high profile one which is pitched at the more expensive fashion end of the market.  The MDL catalogue shows that the services it offers are expensive.  I note that potential customers at this end of the market are more likely to be international travellers.  I also believe that a significant number of people in the industry within Australia will have known of the trade mark before the priority date of this application and that a number of their clients will also have been aware of the trade mark. The use and reputation of the trade mark overseas by MDL is therefore, in this instance, important and relevant.

The expression "is likely to deceive or cause confusion", used within section 10, above, has been given judicial consideration recently in Registrar Of Trade Marks v Woolworths Ltd (1999) 45 IPR 411. Justice French said, at 429:

[050] In  Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594–5, which concerned the 1905 Act, Kitto J set out a number of propositions which have frequently been quoted and applied to the 1955 Act. The essential elements of those propositions continue to apply to the issue of deceptive similarity under the 1995 Act. Applied also to service marks and absent the imposition of an onus upon the applicant they may be restated as follows:

(i) To show that a trade mark is deceptively similar to another 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 of deceptive similarity 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 Bali Co Inc (1973) 129 CLR 353; at 362; 1 ALR 443; at 450:

… 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.

In respect of the latter two paragraphs, above, I note that I am not only to consider the possible effects of the applicant's opening of one hairdressing salon.  I am to consider the effects of all of the applicant's possible usages of the trade mark, including licensing or franchising the use of the trade mark throughout Australia.

In the application of the above tests to the instant circumstances, I am satisfied that the result of the user of the trade mark by the applicant would, in view of the trade mark's reputation, be a real and tangible danger of deception and confusion. I believe that this deception or confusion would occur in two areas. I observe in this regard that the Act places no bounds on the type of confusion or deception referred to in section 60: Re John Fitton & Co Ltd’s Application (1949) 66 RPC 110 at 113 (UK Reg), were it was noted that the words “likely to deceive or cause confusion” place "no limitation upon the nature of the confusion or deception so envisaged".

I am aware that many hairdressers operate as franchises.  The evidence shows that many hairdressers within Australia have been exposed to publicity in Australian trade magazines both about MDL's MAHOGONY trade mark and the five salons operated under that trade mark in England.  Many hairdressers will be aware of MDL's exposure of its trade mark and services at the Beauty, Hair & Natural Therapies Fair in Brisbane.  I note too that it is apparent that many hairdressers from Australia visit the United Kingdom.  Issue 25 of the Journal, in evidence, contains an article by a Michelle Sewell who recounts her visit to the MAHOGANY London salon.  Ms Sewell says, inter alia, "… the salon was constantly BUZZING with clients and visiting wella [sic] salon owners from the USA, Australia and Asia."

I believe it is very likely that the use of the trade mark by the applicant would create confusion and deception among a sizeable number of potential customers.  However, I also consider that it is certain that, should the applicant attempt to franchise or licence use of the trade mark, it would confuse and deceive others in the trade, or those who might seek to enter it, with the mistaken belief that they were franchising use of the trade mark either directly, or indirectly via the applicant, from MDL.  Or the belief could be, that to be offering licenses or franchises under the trade mark, the applicant must be operating under the aegis of MDL.

Accordingly, the opposition in terms of section 60 is successful.

Other

At the hearing of this issue, the applicant attempted to present me with a page of a New South Wales Government Act: the Factories, Shops and Industries Act 1962 No 43. I understand that his reason in doing so was to show that, as the Factories Act specifies that a person must have a license to practice as a hairdresser, Mr Thompson could not have practised as a hairdresser in the course of trade.  Therefore, such an argument goes, there cannot have been a use of the trade mark in relation to the services. 

However, the Factories Act only extends to New South Wales and the use claimed by MDL is in Queensland.  The Factories Act is therefore inapplicable.  Further, even if the prior use claimed had been in New South Wales, the existence of the Factories Act does not, on its own, establish that Mr Thompson did not have a license.

Decision

MDL has been successful in making out a case for its opposition in terms of sections 58 and 60. The opposition is therefore successful in terms of these grounds. I thus refuse to register the application.

Costs

MDL, having been successful, is entitled to its costs which I award against the applicant.

Ian Thompson
Hearing Officer

24 August 2000