McDonald's Corporation v John Panuccio

[2006] ATMO 35

TRADE MARKS ACT 1995

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

Re:Opposition by McDonald’s Corporation to registration of trade mark application 986750(29) Babychino & Star (device) proceeding in the name of John Panuccio.

Delegate:

Iain Thompson

Representation:

Opponent

Simon Williams of Spruson & Ferguson.

Applicant

Did not appear or put in written submissions

Decision:

1. section 41 – word Babychino has no inherent capacity to distinguish the goods – trade mark refused registration
2. Costs ordered against applicant

Background

1. John Panuccio of Concord, New South Wales ('the applicant') has filed an application to register a trade mark, current details of which are:

App No:  986750

Filing Date:  30 January 2004

Acceptance Advert:  12 August 2004

Services:Class: 41:  Flavoured milk, yoghurts and smoothies

Class: 30:  Ice cream and gelato

Trade mark:  

1. On 12 November 2004, McDonald’s Corporation, ('the opponent'), of Oak Brook, Illinois, filed Notice of Opposition (‘the Notice’) to the registration of the trade mark. While the Notice cites several grounds of opposition, that under section 41 of the Trade Marks Act 1995 (‘the Act’) was pursued in written submissions by the opponent at the hearing.

2. For the sake of completeness, I note that those grounds which were not pursued have not been established.

3. Evidence in support was duly served and filed according the Act and regulations thereto.

4. The hearing was held before me, as a delegate of the Registrar of Trade Marks, in Sydney, on 17 March 2006.  Simon Williams of Spruson & Ferguson appeared for the opponent.  The applicant did not appear or file written submissions.

Evidence

1. In summary, the evidence comprises:

Declarant	Position	Date made	Exhibits
Evidence in Support
Rhona Lea Lawson	General Counsel of opponent	11 May 2005	Exhibit RLL-1 to RLL-16
Robert James Kendall Forsyth	Partner of Forsyth’s Coffee	8 July 2005	RJKF-1 to RJKF-2

1. The following synopsis is my understanding of the most salient points of the evidence and I will refer further to the declarations if it is necessary in my discussion of the issues.

2. The opponent operates a worldwide chain of fast food restaurants.

3. Ms Lawson attests that, to her knowledge, both the opponent and at least six chains of café-style franchises in Australia use the word ‘babycino’ in relation to dairy-based concoctions which are sold for consumption by children as an innocuous substitute for cappuccino coffee which, while they resemble cappuccino coffee, are not coffee-based.

4. The café-style franchises other than the opponent to which Ms Lawson refers are Jamaica Blue, Starbucks, Coffee Club, Gloria Jeans, Muffin Break and Michel’s Patisserie – each of which can be generally described as having franchises throughout Australia.

5. Ms Lawson exhibits to her declaration Internet searches on the Google Search Engine (restricted to Australia)[1] for both the word BABYCINO and BABYCHINO.  The word BABYCINO returned 108 ‘hits’ and the word BABYCHINO returned 30 ‘hits’.  The ‘hits’ which included the word BABCHINO are, inter alia, from the Internet websites of such traders as the Maroochy RSL, the Tongue & Groove Café Paddy’s Café in Toowoomba and the University Club of the University of Western Australia.

   [1] Which, I understand, searches primarily for ‘hits’ in the .au domain.

6. A printout from the Maroochy RSL website describes itself as being in the heart of Queensland Sunshine Coast and its menu, on the website, lists ‘babychino’ under the heading ‘beverages’.  Similarly, printouts of the menus of the Tongue & Groove Café at Bridgetown, Paddy’s Café in Toowoomba, and the University Club of Western Australia list babychinos available for sale.

7. Additionally, Ms Lawson attests to the opponent’s use of the word ‘babycino’ in relation to its own dairy-based concoctions which are sold for consumption by children.  The word appears on the opponent’s McCafé menus, in television and radio advertising, nutrition fact-sheets, in evidence and on an internal company promotional sheets, training documents, operating manuals and instructional videos.

8. The word ‘babychino’ is used in a ‘B&T’ (which I understand to be a magazine for the advertising industry) article about the opponent’s coffees; and, in the Townsville Bulletin which also uses the word ‘babycino’ in relation to the opponent’s goods.

9. Ms Lawson also evidences correspondence between the opponent’s legal representatives and the applicant, and also the Registrar of Trade Marks, alerting them to the alleged nature of the word ‘babychino’ and its use by the opponent.

10. Mr Robert Forsyth has extensive experience in the coffee industry and has worked as a coffee roaster, distributor and retailer since 1975.  He is chairperson of the Australasian Specialty Coffee Association, which promotes competency of baristas and runs national competitions to award excellence in the skill.  He is founder of the Barista Guild in Australia.  His experience extends to blending coffee and training those in the coffee industry such as baristas and, as well as operating a coffee roasting and blending house, operates a coffee shop in Naremburn, a Sydney suburb, which sells, inter alia, cappuccinos, expressos, caffé lattes, mochas and babycinos.

11. Mr Forsyth in his declaration attests to the range of coffee drinks commonly prepared by baristas in Australia.  These include espresso, cappuccino, mocha, macchiato, flat white, caffé latte, hot chocolate, affogato, ristretto, Vienna coffee, Irish coffee and babycino.

12. In particular, Mr Forsyth avers, of babycino beverages:

    In my opinion and based on my experience as indicated above, the term "babycino" has since at least 1997 been, and continues to be, a broadly defined term which is "open to interpretation" by baristas and café operators throughout Australia. In particular, as a beverage served to children, the contents of a babycino are often dictated by what the customer (usually the parent) requests.

    For instance, in some cases, a babycino consists simply of milk froth served in a small cup. In other cases, it consists of milk or milk froth together with other flavourings such as chocolate, vanilla, caramel or other flavoured syrup. I am aware of numerous cafés serving babycinos consisting of milk froth dusted with powdered chocolate, made to a "mini-cappuccino", or alternatively, milk froth decorated with chocolate or other flavoured syrup to form a "smiley face" or other pattern designed to appeal to children. I am also aware of cafés adding ice-cream, marshmallows or other ingredients to frothed milk and calling that beverage a babycino. Such variety in the ingredients used to make babycinos in Australia is in my experience not uncommon and has been taking place for at least 8 years. As noted above, it is not unusual for ice-cream (as in affogato, referred to above), marshmallows or other flavourings to be added to coffee or other milk-based beverages (including hot chocolate and babycinos) available at cafés in Australia.

Issues under section 41

1. Section 41 provides a scheme for the assessment of the inherent capacity of a trade mark to distinguish the goods or services of a person from the similar goods of another and, if the trade marks lacks inherent capacity, the assessment of the extent to which the trade mark does in fact distinguish the goods or services.

2. Here, there is no evidence of the use of the opposed trade mark, or of any other circumstances, so what I am to consider is the prima facie situation as regards the inherent capacity of the trade marks to distinguish the goods nominated on the application form.

3. The application of section 41 is described in Blount Inc v Registrar of Trade Marks (1998) 80 FCR 50. This matter, I consider, in the light of Blount, resolves itself to the following issues:

• Whether the words ‘babycino’ and ‘babychino’ are interchangeable and mean, in effect, the same thing;

• The inherent capacity of the word ‘babychino’ to distinguish the goods of the applicant;

• The capacity of the star device to distinguish the goods; and, if the foregoing lack capacity to distinguish the goods,

• The capacity of the trade mark, considered as a whole, to distinguish the goods of the applicant; and, if necessary,

• Outcomes.

Babycino/Babychino

1. There are, according to Ms Lawson’s evidence, 108 ‘hits’ within Australian websites on the Internet of the word ‘babycino’ and 30 similar ‘hits of the word ‘babychino’.  I note that the equivalent search now returns hits of 242 and 151, respectively.  It may also be worthy of note that there are 7 ‘hits’ on Australian pages on the Internet which use the words ‘babycino’ and ‘babychino’ interchangeably.

2. Ms Lawson appends menus from her Internet search results where either the word ‘babycino’ or ‘babychino’ (or, indeed, ‘babycinno’) are used in contexts that it is obvious that they refer to the same child-oriented beverage – a dairy-based cappuccino substitute which does not contain coffee but will contain milk and, Mr Forsyth says, other ingredients, such as chocolate, marshmallow, syrup flavourings or even ice-cream. 

3. I thus consider that the words ‘babycino’ and ‘babychino’ mean the same thing – a warm, frothy, milk-based beverage which is usually dusted with chocolate and may contain marshmallow or a variety of other ingredients according to the taste of the consumer.

Babychino: Inherent capacity to distinguish the goods

1. The inherent capacity of a trade mark to distinguish the relevant goods is to be assessed according to the tests in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511, where Kitto J noted:

   “... the 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”.

1. The word ‘babychino’ (or ‘babycino’) is one that has entered common speech as referring to a particular type of milk-based beverage.  The evidence shows that not only do other traders require to use the word in respect of their goods, they do actually use it in respect of their goods and these goods are either the same as those of this opposed application, or they are similar to them.  While the word ‘babychino’ is still very new and does not, as far as I can determine, thus far appear in dictionaries, I consider that the evidence of menus which include the word (or its variants) and the statement of Mr Forsyth to be very persuasive.  The word, and its variants, are not only interchangeable, they appear to be the most obvious and logical way in which to describe ‘a warm, frothy, milk-based beverage which is usually dusted with chocolate and may contain marshmallow or a variety of other ingredients according to the taste of the consumer’.  As such, the word ‘babychino’, and its variants, lack any capacity to distinguish the particular goods.

Capacity of the star device to distinguish goods

1. Star devices are commonly used to indicate quality – it is a figurative element which is frequently used by traders in many fields to indicate that the product is a ‘star’ or claims some special quality.   The star device should, thus, lack inherent capacity to distinguish.

The trade mark as a whole

1. The trade mark must, however, be considered as a whole.[2]  The question that confronts me is whether the elements of the trade mark come together in such a way that the gestalt is prima facie capable of distinguishing the goods of the applicant.

   [2] See, for example, Re London Lubricants (1920) Ltd's Application [1925] 42 RPC.

2. My conclusion is that they do not, for the following reasons.

3. In Companhia Souza Cruz Industria E Comercio v Rothmans Of Pall Mall (Australia) Ltd (1998) 41 IPR 497 Wilcox J said of the image (in relation to cigarettes) below the quotation:

   I do not think Souza Cruz’s mark fails to comply with s 25 of the 1955 Act. It is not currently distinctive of Souza Cruz’s goods, but it is capable of becoming distinctive. No doubt it is true that the crest device included in the mark is common; perhaps it would register with a potential purchaser “as no more than a blur'’, as Mr Homann says. But I see no reason to doubt that potential purchasers would learn to recognise a melange consisting of the word “free'’, displayed always with particular lines and symbols, even if they could not easily recall, or exactly describe, the detail of the lines and symbols.

1. However, an ordinary arrangement of features which individually lack inherent capacity to distinguish, is not capable of distinguishing goods – see, for example, Eclipse Sleep Products Inc v Registrar of Trade Marks (1957) 99 CLR 300 at 321.

2. Furthermore, if I am wrong about the lack of capacity within the device of the star, it is ‘swamped’ or drowned’ by the prominence of the word ‘babychino’ in the trade mark.  Or, put another way, the star device forms such a minor part of the trade mark that the force of the trade mark must, if the goods are not specified as being ‘ingredients for babychino beverages’, lie in the word ‘babychino’.

3. Further, where the trade mark combines a device with a word, the word portion must be accorded greater significance in assessing its inherent capacity to distinguish, the primary reason being that the customers will refer to the word when describing or ordering the product. See, American Trading & Shipping Co Ltd’s Appn (1936) 6 AOJP 78 and Re Application by Hardings Manufactures Pty Ltd t/a Wyandra Industries (1987) 8 IPR 147 see the comments by Romer LJ in Re Clement & Compagnie’s Trade Mark (1899) 16 RPC 611 at 618.

4. In the opposed trade mark, the device element is so minor and lacking in inherent capacity to distinguish goods that it would seem that what is sought to be registered is primarily the word ‘babychino’.

5. I therefore find that the opponent has established its ground under section 41.

Outcomes

1. I have given some consideration as to whether the applicant might be allowed to qualify the goods nominated on this opposed application as ‘being ingredients for babychinos’.  This course of action would make it plain that the application claims no rights in the word in the word ‘babychino’ per se, it effectively acknowledges that the word functions only as a description of goods as it is used as such on the face of the putative registration, and thus inherently disclaims any claims to any monopoly in the word in relation to the goods.

2. However, the lack of prominence of the star device in the trade mark and its questionable capacity to distinguish has led to reservations on my part as to whether this course of action is appropriate.

3. Moreover, the applicant has not led any evidence as to how the trade mark is used and the opponent has not made any submissions on such a course of action.  The opponent has established its grounds of opposition and, in the circumstances of this application, I do not wish to advocate for the applicant.

Decision

1. Section 55 of the Act provides:

   55. Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:

   (a) to refuse to register the trade mark; or
   (b) to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

   having regard to the extent (if any) to which any ground on which the application was opposed has been established.

   Note:  For limitations see section 6.

2. I refuse to register application 986750.

Costs

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

Iain Thompson

Hearing Officer

Trade Marks Hearings

24 April 2006