McD Asia Pacific LLC v Sheikhtaba Pty Ltd

[2015] ATMO 112

TRADE MARKS ACT 1995

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

Re:Opposition by McD Asia Pacific LLC to registration of trade mark application 1555845 – MAKFOODS and device - in the name of Sheikhtaba Pty Ltd.

Delegate:	Bianca Irgang
Representation:	Opponent: K Kortian of Spruson & Ferguson Applicant: M Marcus of Counsel instructed by South East Lawyers
Decision:	2015 ATMO 112 Section 52 opposition: sections 44, 42(b), 60 and 62A pressed – no ground of opposition established.

Background

1. Sheikhtaba Pty Ltd (‘the applicant’), filed trade mark application number 1555845 on 7 May 2013 in classes 29 and 30 of the International Classification of Goods and Services. Current details of the application are set out below.

   Trade mark:  

   Trade mark application no: 1555845

   Filing Date:  7 May 2013

   Specification:  Class 29: Preserved, dried and cooked fruits and vegetables; jellies, jams, and fruit sauces; edible oils and fats

   Class 30:Flour and preparations made from cereals, bread, pastry and confectionery, ices; vinegar, sauces (condiments); spices

2. Acceptance of the application for possible registration was published in the Australian  Official Journal of Trade Marks dated 21 November 2013. Subsequently McD Asia Pacific LLC (‘the opponent’) filed a Notice of Intention to Oppose registration followed by a Statement of Grounds and Particulars.

3. The applicant then filed its Notice of Intention to Defend. Thereafter the opponent and applicant respectively filed evidence in accordance with the provisions of the Trade Mark Regulations 1995 (‘the Regulations’).

4. I heard the opposition in Canberra as a delegate of the Registrar of Trade Marks on 20 August 2015. The opponent was represented by Mr Kortian of Spruson & Ferguson. The applicant was represented by Mr Marcus of counsel instructed by South East Lawyers. Both parties’ representatives made oral and written submissions.

   Grounds of Opposition

5. The Notice nominated four grounds of opposition under the Trade Marks Act 1995 (‘the Act’). All of those grounds being under ss 42(b), 44, 60 and 62A were pursued at the hearing. The onus is upon the opponent to establish one or more of its grounds of opposition. Gyles J has referred to the standard of proof required in these matters in terms of a ‘balance of probabilities’.[1] His findings upon that issue, arrived at after a consideration of the relevant authorities, have been discussed with approval by Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks[2]. Should the opponent establish one ground of opposition in relation to all of the applicant’s goods, there is no requirement for me to consider the other grounds of opposition.

   [1] Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599

   [2] [2009] FCA 891, [22]-[27] (2009) 82 IPR 13. See also; Sports Warehouse Inc v Fry Consulting [2010] FCA 664; (2010) 87 IPR 300, [36] - [39]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011), [16] to [32])

   Evidence

6. The evidence in this matter consists of the following declarations being:

   Evidence in Support

   ·Statutory declaration of Khajaque Kortian made on 16 July 2014 with exhibits KK-1 to KK-4 (the “Kortian Declaration”); and

   ·Statutory declaration of Madeleine Fitzpatrick made on 17 July 2014 with exhibits MF-1 to MF-17 (the “Fitzpatrick declaration”).

   Evidence in Answer

   ·The declaration of Jamil Makhoul made on 17 October 2014 with exhibits JM-1 to JM-7 (the “Makhoul declaration”)

   Discussion

   Section 44 – Deceptive similarity

7. Only s 44(1) of the Act is relevant in this case and it is reproduced below:

   (1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of goods (applicant's goods) must be rejected if:

   (a) the applicant's trade mark is substantially identical with, or deceptively similar to:

   (i) a trade mark registered by another person in respect of similar goods or closely related services; or
   (ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

   (b) the priority date for the registration of the applicant's trade mark in respect of the applicant's goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

   Note 1:  For deceptively similar see section 10.

   Note 2:  For similar goods see subsection 14(1).
   Note 3:  For priority date see section 12.

8. To establish s 44(1) of the Act the opponent must show all of the following:

   Øa trade mark, either registered or pending registration, in the name of a person other than the applicant, and in relation to which the opposed trade mark is either substantially identical or deceptively similar;

   Øthe trade mark in the name of the other person must be in respect of similar goods or closely related services; and

   Øthe priority date of the trade mark of the other person is earlier than the priority date of the applicant’s trade mark.

9. The opponent has specified a number of trade mark registrations which it owns in support of the s 44 ground of opposition. The details of these registrations are as follows:

Number(s)	Class	Trade Mark
328971	29	MAC FRIES
468145	42	MAC TONIGHT
271330	30	BIG MAC
567801	29	MAC TIME
271329	29	BIG MAC
1167995	30	SON OF MAC
1539657	30	MEGA MAC
567794	42	MAC TIME
493905	42	MACKERS
468145	42	MAC TONIGHT
635623	42	MACCA’S
912584	43	MAC YOUR DAY
1278865	43	MAC ALL NIGHT
567794	42	MAC TIME
567796	30	MAC TIME
635623	42	MACCA’S
666930	29, 30	EL MACO
1539657	30	MEGA MAC

1. I note that the opponent’s above trade marks which I shall now collectively refer to the “MAC marks” all have earlier priority dates than the opposed trade mark. The opponent has stated that they do not believe any of their registrations are substantially identical to the opposed trade mark. I agree. Therefore, the key issue to be decided is if the applicant’s opposed trade mark is deceptively similar to any of the opponent’s registered MAC marks.

2. Deceptive similarity is defined by s 10 of the Act. The determination of deceptive similarity requires a comparison of the impression which persons of ordinary intelligence and memory would have upon recalling the opponent’s trade mark, to the impression that they would form from the applicant’s trade mark[3].

   [3] The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, Windeyer J [415]

3. According to the authorities[4] any consideration of whether trade marks are deceptively similar must take into account that consumers may have an imperfect recollection of a trade mark. As a general principle one needs to estimate the impression consumers are likely to form of each trade mark as a whole. Confusion may result if a trade mark incorporates the distinguishing features of another’s trade mark. Justice French in Registrar of Trade Marks v Woolworths Ltd[5] observed in relation to the expression “likely to deceive or cause confusion”:

   … The use of the word “likely” in this context does not import a requirement that it be more probable than not that the mark has that effect. The probability of deception or confusion must be finite and non-trivial. There must be a “real tangible danger of its occurring” …

   [4] Clark v Sharp (1898) 15 RPC 141, [146]; Re Application by the Pianotist Co Ltd (1906) 23 RPC 774; Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641; Aristoc Ltd v Rysta Ltd (1943) 60 RPC 87; Cordova v Vick Chemical Co (1951) 68 RPC 103; Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536; Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411

   [5] Woolworths (1999) 45 IPR 411

4. The concepts ‘deceive’ and ‘cause confusion’ were considered in Pioneer Hi-Bred  Corn  Co v Hy-Line Chicks Pty Ltd[6]:

   ‘Deceived’ implies the creation of an incorrect belief or mental impression and ‘causing confusion’ may go no further than perplexing or mixing up the minds of the purchasing public .... Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant's mark come from some other source and confused to being caused to wonder whether that might not be the case.

   [6] (1979) RPC 410 at 423

5. Thus I need to decide whether the concurrent use of the respective trade marks in relation to the goods and services in classes 29, 30, 42 and 43 is likely to result in a tangible danger of confusion or deception. In this case, I do not consider it would.

6. In coming to this decision it is important that the trade marks are considered in their entirety – ‘it is the whole of the mark as used which is the subject of the comparison with the registered mark.’[7] In comparing the respective trade marks it becomes apparent that the applicant’s trade mark MAK FOODS with device is aurally similar to the opponent various MAC marks. The respective trade marks share the aural prefix MAC- to MAK- which is the first element in each trade mark. In issues of imperfect recollection the fact that trade marks have a common first element may be of significance.[8] However, the applicant’s trade mark contains the additional word/suffix “-FOODS” and additional crescent moon device element. The suffix “-FOODS” and the crescent moon device are additional factors that would be likely to recalled. Particularly since this additional word/suffix is significant and considerably adds to the length of the trade marks when spoken and the device is striking when viewed visually. Ultimately,:

   One must bear in mind the points of resemblance and the points of dissimilarity, attaching fair weight and importance of all, but remembering that the ultimate solution is to be arrived at, not by adding up and comparing the results of such matters, but by judging the general effect of the respective wholes.[9]

   [7] Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182, 218 (Allsop J).

   [8] In the Matter of London Lubricants (1920) Limited's Application to Register a Trade Mark (1925) 42 RPC 264, [279].

   [9] Clark v Sharp (1898) 15 RPC 141, [146] (Ch D).

7. The opponent’s submissions argue that because all the trade marks contain the same aural word/prefix MAC/MAK that the applicant’s trade mark is deceptively similar to the opponent’s family of MAC marks even with the addition of word/suffix FOOD to the applicant’s trade mark. The opponent further argues that the word FOOD is descriptive of the class 29 and 30 goods so that its addition to the applicant’s trade mark does not add anything to it and that the striking and distinctive term remains the prefix MAK which is aurally identical to the term MAC in the opponent’s MAC marks.

8. Mr Kortian, the representative for the opponent, referred me to the McSalad[10] decision which  found that the (then) 17 or so family of “Mc” prefix and “MAC” trade marks, taken together supplies a sufficient expectation that any trade mark with the prefix “Mc” which is conjoined to a word which describes either the goods or services themselves or a quality or characteristic of the goods, would form part of the opponent’s family of marks. This was on the proviso that the goods or services referred to in the part word conjoined with the “Mc” prefix would be seen to form a normal or usual part of the opponent’s business. Mr Kortian has argued that this reasoning also applies in relation to the phonetic equivalent “MAC” or “MAK” and is clearly the case in this situation given the general relevant descriptor is “FOODS”. However, I do not believe McSalad is analogous to the present situation.

   [10] McDonald’s Corporation v Macri Fruit Distributors Pty Limited [2000] ATMO 37, [12]

9. Here the opponent has listed a family of MAC marks in support of section 44 which are presented in plain text and of which the majority of the registrations do not have any particular meaning when applied to the respective goods and services. The applicant’s MAK FOODS trade mark contains a striking crescent moon device along with the word FOODS. FOOD is defined as a nutritious substance that people or animals eat or drink or plants absorb in order to maintain life and growth.[11] The word FOOD has a definition which may be used to very broadly describe the general nature and application of the applicant’s claimed goods in classes 29 and 30 but it does not describe any specific goods to the point where its presence can be discounted when estimating the impressions likely to be formed of the trade marks. Further, the crescent moon device bears no relation to the applicant’s goods and so only serves to emphasise any distinction between the impressions left by the opponent’s various MAC marks and the applicant’s trade mark. I am not satisfied there is a real tangible danger of use of the respective trade marks resulting in confusion in the marketplace for the applicant’s goods and the opponent’s goods and services.

   [11] Oxford Online Dictionary, 2015, >

   In view of my finding that the opposed trade mark is not deceptively similar to any of the MAC marks the opponent has not established the opposition ground based on section 44 of the Act.

   Section 60 - Reputation in Australia

10. Section 60 of the Act provides:

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

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

    (a)       another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, 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:     For priority date see section 12.

11. Unlike s 44 of the Act, s 60 does not require that the goods upon which the opponent uses its trade mark be of a specified standard of similarity with the goods of interest to the applicant, nor is there a requirement that the trade marks be substantially identical or deceptively similar. It is for me to determine whether the opponent has established that before 7 May 2013 its various MAC marks and MC marks (both registered and common law) were recognized by the public generally, or at least by a significant number of persons in the relevant markets and whether because of that, the use by the applicant of its trade mark on the goods listed in the application would be likely to cause the public confusion.

12. In relation to reputation Kenny J states in McCormick & Co Inc. v McCormick[12]:

    In ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 343; 23 IPR 193 at 234, Lockhart J said:

    [R]eputation within the jurisdiction may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum.

    [12] 51 IPR 102, [128]

13. Kenny J continues:

    In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product:…

14. The Fitzpatrick declaration states that McDonald’s, a corporation organized and existing under the laws of the State of Delaware is the registered proprietor of or applicant for registration of a large number of trade marks in Australia and, through McDonald’s Australia, has used in Australia most if not all of those trade marks together with many other trade marks (collectively, “McDonald’s Trade Marks”). Ms Fitzpatrick goes on to assert that McDonald’s, by itself and its predecessor in title and/or by its parent company (McDonald’s Corporation), their franchisees, division, subsidiaries, affiliates and licensees (“McDonald’s affiliates”) in business have conducted a system of self-service restaurants since 1948. She states that the first McDonald’s restaurant in Australian was opened in 1971 and that there are now in excess of 890 McDonald’s restaurants operating in Australia.

15. According to Ms Fitzpatrick, McDonald’s Corporation, through its McDonald’s affiliates is one of the largest food service organization in the world and as at 2012, McDonald’s affiliates were operating over 34,000 restaurants in 119 countries and territories. She states that every day the McDonald’s affiliates serve an average of 69 million people around the world. Confidential exhibit MF-4 accompanying the Fitzpatrick declaration demonstrates that the total sales figures in relation to food and beverages sold through the opponent’s McCAFE outlets in Australia for 2001 and 2012 is significant. Similarly, sales of the opponent’s goods through its McDonald’s restaurants worldwide and in Australia is very significant for the years 2011 and 2012 (confidential exhibits MF-5).

16. The Kortian declaration refers me to a number of decisions in which the significant reputation of the opponent is discussed and confirmed. These decisions are:

    ·Decision of a Delegate of the Registrar of Trade Marks in relation to opposition to Australian Trade Mark Application Nos. 718466 and 718467 – McSALAD and McFRESH dated 1 May 2000;

    ·Decision of a Delegate of the Registrar of Trade Marks in relation to opposition to Australian Trade Mark Application No. 897074 – McChina dated 27 October 2004;

    ·Decision of a Delegate of the Registrar of Trade Marks in relation to opposition to Australian Trade Mark Application Nos. 960885 and 961902 – MacCoffee plus eagle device and MacCoffee dated 24 April 2007;

    ·Decision of a Delegate of the Registrar of Trade Marks in relation to opposition to Australian Trade Mark Application No. 1509266 – McKebabs dated 12 June 2014;

17. It is clear from the evidence that the opponent has a very substantial reputation overseas and in Australian for its family of MAC and MC marks. I am satisfied that within the Australian marketplace for restaurants the opponent’s MAC/MC marks have acquired a reputation by the priority date of the opposed application. However, it needs to be determined if, given this reputation for restaurants in Australia, use of the opposed trade mark would be likely to deceive or cause confusion.

18. Despite the considerable reputation in its MC and MAC family trade marks within the Australian marketplace, I am not satisfied that it is likely that the average consumer would become confused or be caused to wonder whether there was a connection between the opponent’s goods and services bearing any of the MC or MAC trade marks and those goods of the applicant bearing the MAK FOODS and device trade mark.

19. The Registrar’s delegate in Reece Pty Ltd v Rogers Seller & Myhill Pty Ltd[13] observed that:

    Confusion cannot arise solely from the reputation of one trade mark. There must always remain a level of similarity between the marks, whether we call it deceptive similarity or something less, and no matter how small it might be. The likelihood of confusion must depend on the reputation of the opponent's trade mark, but have regard (amongst other factors) to the level of similarity of the goods/services and the degree of similarity of the trade marks, greater or smaller.

    [13] (2010) 85 IPR 647

20. And in Pottle Productions Inc v Rute Ithalat Ve Ihracat Anonim Sirketi[14] the delegate observed that:

    The assessment of the likelihood of deception or confusion under section 60 is informed by the strength of the reputation of the Opponent’s trade mark(s), the inherent distinctiveness thereof, the degree of similarity between the trade marks under consideration and the nexus or connection between the goods and/or services of the parties. Each of these is a variable and it is possible that a trade mark’s reputation might be sufficiently strong and the degree of similarity to an opposed trade mark be so great (particularly where the trade marks are inherently distinctive) that confusion or deception will be a likelihood where very little, if any, nexus or connection exists between the goods and/or services under consideration.

    [14] [2012] ATMO 124, [40]

1. Given the reasons already outlined in my discussion of s 44 regarding the lack of similarity between the applicant’s and opponent’s MAC trade marks, I do not believe that the applicant’s use of its MAK FOOD and device trade mark would be likely to deceive or cause confusion in the marketplace even if that use is in relation to the same goods and directed at the same consumers. The respective trade marks are simply too different. I also believe that the opponent’s overwhelming reputation in its restaurants selling its MAC/MC branded goods only serves to emphasise the differences between the respective trade marks and further preclude confusion in the marketplace.

2. I am not satisfied that the applicant’s use of its trade mark is likely to result in any significant degree of confusion or deception. The opponent has not established the s 60 ground of opposition.

   Section 42(b) - Contrary to Law

3. Section 42 of the Act provides:

   An application for the registration of a trade mark must be rejected if:
                    (a) the trade mark contains or consists of scandalous matter; or
                    (b) its use would be contrary to law.

4. Counsel for the opponent, submitted that the use of the applicant’s MAK FOODS and device trade mark for its food goods would breach ss 18 and 29 of the Australian Consumer Law[15] which proscribe misleading or deceptive conduct or the making of false or misleading representations in trade or commerce. Mr Marcus, counsel for the applicant, stated that the threshold for establishing misleading or deceptive conduct under the Australian Consumer Law was higher than that required by s 60 of the Act.

   [15] Competition and Consumer Act 2010 (Cth), sch 2.

5. As I have found that the use of the opposed trade mark is not, at a minimum, likely to “deceive or confuse” under s 60 of the Act, it follows that the use is not, on the stricter test posited by the Australian Consumer Law, likely to mislead or deceive, nor do I believe use would amount to a false or misleading representation. I thus find that the opponent has not established the ground of opposition under s 42(b).

   Section 62A – Application made in bad faith

6. Section 62A of the Act provides:

   The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

7. Bennett J in DC Comics v Cheqout Pty Ltd[16] considered bad faith and endorsed the approach taken by Dodds-Streeton J in Fry Consulting Pty Ltd v Sports Warehouse (No 2) [17], wherein her Honour commented:

   Bad faith, in the context of s62A, does not, in my opinion, require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.

   The formulation in the United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison [Harrison’s Trade Mark Application [2005] FSR 10, in which the “combined test” of bad faith was said to involve both subjective and objective elements].

   Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character…

   The question is whether, in all the particular circumstances, the applicant’s knowledge was such that his decision to apply for registration at the relevant date would be regarded as in bad faith by persons adopting proper standards.

   [16] [2013] FCA 478; (2013) 101 IPR 334.

   [17] [2012] FCA 81; (2012) 94 IPR 551, at [164].

8. I am not persuaded that the opponent has discharged the onus of establishing that the applicant, as at the priority date, applied for the MAK FOODS and device trade mark in bad faith, in the sense that in all the circumstances, persons adopting proper standards would regard the decision to register as in bad faith, or that reasonable and experienced persons in the field would view such conduct as falling short of acceptable commercial behaviour.

9. The Makhoul declaration states that the applicant was incorporated in 1981 and is a small family business employing Mr Makhoul, his wife and his son (exhibit JH-1). Mr Makhoul asserts the applicant sources and imports products from the Middle East and was the distributor for two Lebanese companies who buy products from manufacturers in Lebanon or Turkey and re-label them to sell to companies like the applicant. According to Mr Makhoul, he decided that it would be better for the applicant to source products directly from the manufacturers and then brand them with its own brand and sell the products in Australia.

10. Mr Makhoul states that he and his family then proceeded to choose a ‘label’ initially considering MAKHOUL FOODS. Eventually, Mr Makhoul and his son agreed that the initial trade mark idea of including the family name ‘MAKHOUL FOODS’ was too long so it was shortened to MAK FOODS. Mr Makhoul’s son then designed the MAK FOODS trade mark giving prominent place to a blue crescent moon which is based on an Islamic symbol since many of the applicant’s customers for its Middle Eastern products are Muslims.

11. Once the MAK FOODS trade mark was decided on Mr Makhoul asked his and asked him to make the necessary arrangements to register the trade mark. His accountant then engaged Corporate Professionals Australia Pty Ltd to search the Trade Mark Register and file the opposed application. In May 2013, Mr Makhoul received a letter from BWW Accountants containing the information from Corporate Professionals Australia Pty Ltd noting that the trade mark application had been received and filed with IP Australia (exhibit JM-2). In the meantime, the applicant was advised it should take active steps in protecting its rights in the trade mark prior to registration by using the TM symbol as part of the words and logo combination wherever it used the trade mark. 

12. The evidence of how the applicant adopted its trade mark does not suggest that the applicant engaged in bad faith. Given this and the significant differences between the trade marks I do not believe that the applicant made the application in bad faith. The opponent has not established the s 62A ground of opposition

    Decision

13. Section 55 of the Act provides:

    55  Decision

    (1)  Unless subsection (3) applies to the proceedings, 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:          Forlimitationssee section 6.

14. The opponent has not established any grounds of opposition. The trade mark application may accordingly proceed to registration one month from the date of this decision. If the Registrar has been served with notice of appeal before that time, I direct that registration of the trade mark shall not occur until the appeal has been decided or discontinued.

    Costs

15. The applicant has sought an award of costs in relation to this opposition. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs, according to the official scale set out in sch 8 of the Regulations, against the unsuccessful opponent McD Asia Pacific LLC.

    Bianca Irgang

    Hearing Officer

    Trade Marks Hearings

    24 November 2015