Manenti Holdings Pty Ltd v Untell Pty Ltd

[1992] ATMO 4

Trade Marks Act 1955
Decision of a Delegate of the Registrar of Trade Marks

Re:Opposition by Untell Pty Ltd to the registration of application 465058 in the name of Manenti Holdings Pty. Limited

Background

On 21.12.89, trade mark application 465058 was advertised accepted for registration.  The application is in the name of Manenti Holdings Pty Ltd, which I will identify from this point simply as "the applicant", and the goods specified in the application are "depilatory (hair removing) soaps".  The trade mark the subject of the application, which was lodged on 12.5.87, is a word and device as below

The mark was proposed by the applicant for acceptance in Part A as a distinctive mark, but an objection to this was taken by the examiner on the ground that the word DEPILSOAP was not an invented word and that it has direct reference to the goods to the extent that the mark, viewed as a whole, was not distinctive.  The merits of the case were then considered in Part B, reserved for marks which are either distinctive or able to become distinctive through use.

The application was accepted in Part B, and advertised with an endorsement "Accepted on provision of evidence of use".  The evidence of use was part of the Registrar's reasons for acceptance and was so identified at the time
The applicant's mark is said to have been in use "since late 1984, early 1985".  Sales for 1985 are quoted at $150,052, while for 1986 the figure is $234,650.  A sample of the actual packaging used was lodged, and it is reproduced below

Registration of the application has been opposed, as provided for by sub-section 49(1) of the Trade Marks Act 1955, by Untell Pty Ltd, which I will refer to as "the opponent" from this point, on grounds which are very generalised and which I will not recite at length as they were not fully pursued at the hearing. The opponent claims in general terms that the applicant is not the proprietor of the mark, that the application should be refused in any case as use of the applicant's mark would be likely to deceive in view of use by the opponent of the trade mark DEPILAWAX and that, by way of assertion at the hearing, the applicant's mark is not registrable under section 25 of the Act in view of the obviousness of its derivation. It was also asserted on the same basis that the mark sought to be registered is in itself inherently deceptive in that it misrepresents the nature of the goods.

After the evidence stages provided by the Trade Mark Regulations (including the service of further evidence by special leave of the Registrar) the matter was set down for hearing on 19.9.91.  The applicant was represented by Greg Munt, a patent attorney of the firm of Griffith Hack and Co, patent attorneys, while the opponent was represented by Beverly Fagan, a solicitor of the firm of Davies and Collison, patent attorneys.

Having heard the parties, I will now address the evidence in detail.  I will note at this point that for reasons which follow I am not required to consider the further evidence of the applicant in reply to the further evidence of the opponent.

Opponent's Evidence

This consists in the first instance of a declaration by Lola Kirszbaum, a director of the opponent.  Ms Kirszbaum declares that she has previously operated a business which became the opponent company and that from 1981 she commenced the sale of goods under the trade marks DEPILACREAM, DEPILOTION, DEPILAGEL and DEPILAWAX,

The opponent asserts that it has developed a substantial reputation in a family of "Depil" trade marks.  The declarant also states that she estimates "the approximate annual retail sales figure of goods under the trade mark DEPILAWAX sold in Australia during the last five years to be $1.5 million dollars." 

The opponent's main sales outlets are said to be Coles-Myer, K-Mart and Target, with some sales also to large pharmaceutical outlets and chain stores and to an Australian distributor, United Pharmaceutical Laboratories. 

There was apparently a former distributor of the opponent's products.  This firm was appointed at about the time that the mark was adopted by the opponent.  There is no evidence as to the surrounding circumstances, though I will note the unsupported allegation that the packaging used by the distributor is the same or extremely similar to that used by the applicant.

The applicant attempted to register the marks DEPILAWAX and DEPILAGEL in 1984, but these applications were "allowed", as Ms Kirszbaum puts it, to lapse.

Appended to the declaration are exhibits A to G.  In so far as they are relevant these are:
Exhibit A:  samples of packaging of unstated and unknowable date but bearing the trade marks Depilawax, Depilagel, Depila-Cream, and Depil-Lotion.  Depilawax is there used in relation to depilatory wax strips while DEPILAGEL is used in relation to a substance to be wiped on to the skin, which is then covered with a precut strip of paper, calico or muslin which the user is to "zip off".  The cartons also all bear the trade mark GENEVE, and the Depilagel and Depilawax cartons also bear a note on a (normally concealed) flap of the carton which I take to indicate that the products in question come from United Pharmaceutical Laboratories.
Exhibit B:  a draft contract, unexecuted and apparently intended to bind a Victorian company named Simont Nominees Pty Ltd (asserted at the hearing to be now wound up and to have had its assets transferred to the opponent) and an English firm in some unspecified licence relationship apparently involving "the formulary and method of manufacture of a proprietary depilatory marketed in Australia under the names DEPILAWAX and DEPILAGEL" and "the right to use manufacture or distribute the Product".  I disregard this exhibit entirely, as there is no evidence either that the agreement is relevant or was ever completed or even as to the relevance of the Victorian company.  I likewise dismiss a second part of the same exhibit, said to be a covering letter for the same agreement but which appears in fact to be from a third company and to relate to the failure of the opponent to provide that other party with samples and promotional material of an unspecified sort. 
Exhibit C:  an order dated 7.4.81 and made out for "100,000 - 100 gram jars of Gel".  Ms Kirszbaum has declared that this invoice in fact relates to "goods under the trade mark DEPILAWAX" (ie the wax strips noted in my reference to exhibit A) but I will not accept this in view of the contrary suggestion in the exhibit itself (supported by Ms Fagan's submissions at the hearing) with the result that the evidence can be given little weight as to the identity of the mark involved.
Exhibit D:  Two pages of an order directed to the opponent by Target Australia Pty Ltd.  The order is headed in terms that call for delivery between 29.8.88 and 9.9.88.  It is on a standard form produced by Target Australia, and the format is such that the goods are ordered by reference to a "description" and a "product no.".  I will now list the relevant items by reference to the wording shown against "description" and "product no.":

description: Face Bleach (with the words "Sell $7.99" written below)  
product no.: Depilawax

description: Body Bleach (again with the words "Sell - $ 7.99" written below) 
product no. Depilawax)

description: 50g Cream It Off JAR (with the entry "Sell: $4.99" written underneath)
product no.: Depilawax

description: 125 g Cream It Off Tube Depilawax   
(The reference to "product no." has been crossed out, and beside this there is the entry "Sell - 6.50"

description: 200ml Smooth It Off Lotion Depilawax  
(The reference to "product no." has been crossed out, and beside this there is the entry "Sell $6.50")

description: Wax It Off Strips.  (Below this is the entry "sell $6.50")
product no.: Depilawax

description: Wax It Off Kit Depilawax. 
(The reference to "product no." has been crossed out, and beside this is the entry "sell $6.50").

In examining this exhibit I note Mr Munt's point that the word "Depilawax" when shown on the Target order form is apparently in a different hand writing and using a different pen to the other words.  No explanation of this was given at the hearing, but to my mind the presence of two different hands and pens in writing a crucial word in an exhibit must reduce the weight that I can give the evidence.  I will however leave the matter open, as the date of this invoice is after the date of the application now in dispute.

Exhibit E:  A sample of the applicant's packaging, showing the mark in the form in which the applicant asserts it has been used.

Exhibit F apparently does not exist, as it was neither lodged nor served, and G is simply a letter of demand sent by the opponent to the applicant.  Both of those exhibits can thus be ignored for the present purposes.

Opponent's further evidence
The opponent has attempted to clarify the meaning of the words "the approximate annual retail sales figure of goods under the trade mark DEPILAWAX sold in Australia during the last five years to be $1.5 million dollars" by further evidence to show that the sales have been 1.5 million in each of the years specified.  The further evidence is less debatable than was the Target Australia order form and is very clearly supported by an order for DEPILAWAX WAX IT OFF STRIPS, along with products ordered by reference to the trade marks WAX IT OFF, CREAM IT OFF, SMOOTH IT OFF and BODY SILK SKIN CONDITIONER.  The assertion now made in declaratory form is unambiguous:  1.5 million each year.  It is interesting to note that in asserting these sales figures Ms Kirszbaum is careful to exclude from her calculation the part of the order relating to WAX IT OFF, CREAM IT OFF etc; those being words which figured in the Target order form. 

It is said that the delivery to K-Mart in August 1988 for which the invoice has been exhibited as part of the further evidence had a wholesale value for DEPILAWAX goods of $30,600, with repeat orders every 6 weeks.  I have decided the ambiguity in the opponent's favour:  $1.5 million in each year beginning in 1986.

However, having resolved the ambiguity I must still find that I have no actual evidence of trade mark use before the date of application.  The question of when the opponent first made trade mark use of its mark is one for my decision, and I cannot rely on anything but actual evidence, as distinct from assertions that there has been such use, in answering it.

Decision

Proprietorship
I rely here on the approach to acquiring proprietorship formulated by McGarvie J in Settef v Riv-Oland Marble 10 IPR 402 at 413. Put simply, a valid claim to proprietorship of an unused mark can be based on the intention to use it and the making of an application for registration, but this claim must be displaced by prior use by another. I have found in assessing the evidence that there is nothing that will allow me to find that the opponent had made trade mark use of its marks before the date of application. The applicant was entitled to make its application and I dismiss the opposition as it relates to proprietorship.

Section 28
The lack of evidence prior to the date of application goes against the opponent here too, since the rights of the parties are to be determined as at that date (Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd 91 CLR 592). There is simply no evidence that the opponent had any reputation at all in DEPILAWAX prior to the date of the order exhibited as part of the opponent's further evidence.

Section 25 and other
There are two other lines of argument adopted by the opponent.  The first of these was specifically raised only at the hearing, and goes to lack of inherent adaptation to distinguish; it was not in my view fairly within the scope of a somewhat related ground of opposition (number 8) which goes to lack of adaptation to distinguish "for the aforementioned reasons" since in the context of those aforementioned reasons, that ground is limited to defects in proprietorship and to matters arising from prior use.  Inherent adaption, though, would be a matter that falls within the last ground of opposition, which I will describe as a general invocation of refusal on discretionary grounds "by reason of the nature of the mark". 

I will consider this newly specified argument, since section 50(2) gives me a discretion to rely on any ground "whether relied on by the opponent or not", and I think that this must include a ground not clearly stated in a notice of opposition or supported by the evidence in support but which is invoked only at the hearing.  However, I would not, even if I find such a ground to be valid, refuse to register the application or necessarily award costs on its account - though I may be forced to consider withdrawal of acceptance and the conducting of an ex parte hearing into the exercise of my discretion in doing so.

Ms Fagan has asserted that "Depil" is a word common to the depilatory trade (though there is no evidence of this) and that its meaning will be familiar to consumers.  This latter I will concede, albeit that the familiarity may well be in the context of the element "depil" appearing in distinctive trade marks.  Ms Fagan then went on to argue that the mark has no scintilla of inherent distinctiveness, a failing which must be fatal to an application for registration in either part A or part B (Oxford University Press v Registrar of Trade Marks 1990 AIPC 90-716).

The case law relating to the degree of invention in a word is dealt with at pages 89 and following, and at pages 135 and 136 in relation to part B in particular, in Shanahan's Australian Law of Trade Marks and Passing Off, and in this instance the matter has already been dealt with by the Registrar's delegate, who concluded that the mark as a whole was registrable in Part B though not in Part A.  Regard was had to the use made by the applicant as showing that with use the mark would become distinctive.  I agree entirely with this conclusion.  The word DEPILSOAP is not a portmanteau word such as may be registered without evidence in Part A of the register, nor is the evidence of use which was accepted in support of the application sufficient to show that the mark had become distinctive in fact at the time of application.  However, the extent to which the mark fell short of prima facie part A registrability is not great and it follows that the mark has more than the minimal inherent adaptation required even for Part B registration.  I dismiss the opponent's arguments under this head.

Since Ms Fagan addressed the basic question of inherent adaptation, I am not called on to decide the related question of how much weight should be given to the evidence of use relied on at acceptance.  That original evidence is consistent with but considerably more detailed than the applicant's further evidence in reply to the further evidence of the opponent; it was before the Registrar at acceptance but not subsequently served on the opponent.  The question is an interesting one and my opinion, though given in the lack of detailed argument from the parties, may still assist practitioners.

The present case is unlike the situation in Konckier v Amco Wrangler (1987) AIPC 90-385. In that case the evidence of use was not instrumental in the ultimate registrability of the word Bogart, which was by that time a surname registrable under the de minimis limits relevant to part B. The existence of the evidence was not advertised to the public, and was first discovered by the opponent at the hearing. The Registrar now advertises the fact that evidence of use has been instrumental in gaining a Part B acceptance, and I do not think that the applicant needs to defend the initial acceptance by serving that evidence on an opponent - it is equally appropriate for an opponent to obtain it under the Freedom of Information Act. The Registrar takes evidence at face value prior to acceptance and an opponent who ignores the warning that the evidence exists must accept that the evidence exists if it wishes to claim by mere assertion that the acceptance was wrong. On the other hand it is also true that an applicant who is called on to answer the hard evidence of an opponent in a subsequent opposition, for instance in an attempt to show prior use, will not be able to "rely" on evidence which it has neglected to serve.

As a final argument, it is submitted that the mark DEPILSOAP used in respect of goods which are not soaps would be inherently deceptive. 

I cannot accept that this is a valid line of argument.  Not all things called soaps are soaps in the sense of being saponaceous materials used for washing purposes, as is shown by uses such as saddle soap for a creamy wax-like material which is as much a preservative as a cleaner; nor is there any evidence or reason to surmise that there are soaps (in the strictest sense of the word) which the public would expect to be able to use to literally wash off the undesired hair.

The applicant's use is consistent with the definition provided in the Macquarie Dictionary, viz "a substance used for washing or cleansing (emphasis added) purposes, usu. made by treating a fat with an alkali (as sodium or potassium hydroxide)...", though the definition has been taken to a figurative extent.  I note that the same authority shows that soap can also be used as a verb to mean no more than "to flatter" and it seems to me that the applicant is using the word in a similar and non-specific sense.  Used for these goods, there is no reasonable likelihood of deception or confusion.

Conclusion
The opposition has failed entirely.  The applicant is entitled to an award of costs in accord with the official scale.  The application is in order to proceed to registration on payment of the registration fee, and I direct in terms of section 54(3) that the due date for registration is two months from the date of this decision.

T. Williams
Hearing Officer

6 February 1992