McPherson's Consumer Products Pty Limited v Perfectscents Hand Made Soaps Pty Ltd

[2020] ATMO 160

TRADE MARKS ACT 1995

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

Re:Opposition by McPherson's Consumer Products Pty Limited to registration of trade mark application 1885212 (3) – SPIRITUAL ALCHEMY – in the name of Perfectscents Hand Made Soaps Pty Ltd

Delegate:	Nicholas Smith
Representation:	Opponent: Phillips Ormonde Fitzpatrick Applicant: Elementary Law Pty Ltd
Decision:	2020 ATMO 160 Trade Marks Act 1995 (Cth) - Section 52 opposition: s 44 established – registration refused

Background

1. This decision concerns an opposition brought by McPherson's Consumer Products Pty Limited (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth) (‘Act’) to the registration of the trade mark which is the subject of the application detailed below in the name of Perfectscents Hand Made Soaps Pty Ltd (‘Applicant’): 

Application Number:	1885212
Filing Date:	14 November 2017
Goods:	Class 3: Body creams (cosmetics); Cosmetics; Cosmetics for personal use; Cosmetics for the treatment of dry skin; Cosmetics for use on the skin; Cosmetics in the form of creams; Cosmetics in the form of milks; Cosmetics in the form of non-medicated lotions; Cosmetics in the form of oils; Cosmetics in the form of powders; Cosmetics preparations; Essential oils for use in cosmetics; Milks (cosmetics); Moisturisers (cosmetics); Night creams (cosmetics); Non-medicated cosmetics; Nourishing creams (non-medicated cosmetics); Oils for the body (cosmetics); Oils for the skin (cosmetics); Skincare cosmetics; Cosmetic preparations for skin care; Cosmetic products for skin care; Cosmetic skin care products; Essences for skin care; Non-medicated products for skin care; Non-medicated skin care beauty products; Non-medicated skin care lotions (cosmetic); Non-medicated skin care products; Powders for skin care (not for medical use); Skin care creams (cosmetic); Skin care oils (cosmetic); Skin care preparations (cosmetic); Skin care products (cosmetic); Body care preparations (non-medicated); Body care products (non-medicated); Body lotions (other than for medical purposes); Body milks; Body moisturisers; Body oil; Cosmetic preparations for use on the body; Moisturising body lotion (cosmetic); Non-medicated creams for the body; Non-medicated preparations for use on the body; Non-medicated products for the body; Non-medicated sprays for use on the body (toiletries); Oil for the body; Cosmetic articles for personal use; Cosmetic bath products; Cosmetic creams; Cosmetic goods for care of the skin; Cosmetic masks; Cosmetic milks; Cosmetic moisturisers; Cosmetic oils; Cosmetic preparations; Cosmetic preparations for cleansing the skin; Essential oils for cosmetic purposes; Eye lotions for cosmetic use; Eye masks (cosmetic); Facial care products (cosmetic); Facial creams (cosmetic); Facial masks (cosmetic); Facial moisturisers (cosmetic); Facial scrubs (cosmetic); Facial toners (cosmetic); Moisturising creams (cosmetic); Moisturising lotions (cosmetic); Moisturising preparations (cosmetic); Moisturising skin creams (cosmetic); Moisturising skin lotions (cosmetic); Natural oils for cosmetic purposes; Oils for cosmetic purposes; Serum (cosmetic preparations); Skin balms (cosmetic); Skin cleaners (cosmetic); Skin cleansing cream (cosmetic); Skin creams (cosmetic); Beauty care products; Beauty creams (non-medicated); Beauty masks; Beauty milks; Beauty preparations; Beauty products; Non-medicated beauty preparations; Products for beauty care; Bath crystals, not medicated; Bath essences, not medicated; Bath oils, not medicated; Bath salts, not for medical purposes; Non-medicated bath oils; Non-medicated bath preparations; Non-medicated bath salts; Non-medicated crystals for use in the bath; Essential oils for the production of perfumes; Oils for perfumes and scents (‘Applicant’s Goods’)
Trade Mark:	SPIRITUAL ALCHEMY	(‘Trade Mark’)

1. Following the advertisement on 5 April 2018 in the Australian Official Journal of Trade Marks of the Trade Mark’s acceptance for possible registration, the Opponent filed a Notice of Intention to Oppose on 5 June 2018.  The Opponent then filed a Statement of Grounds and Particulars on 4 July 2018 (‘SGP’). The SGP raised grounds of opposition under ss 42(b), 44 and 60 of the Act. The Applicant filed a Notice of Intention to Defend on 20 July 2018.

   Evidence

2. The Opponent filed the following evidence in support of its opposition:

   ·Declaration made on 25 October 2018 by Michael Peter Squires, Partner at Phillips Ormonde Fitzpatrick, the Opponent’s representative, with Exhibits MPS-1 to MPS-6 (‘Squires declaration’); and

   ·Declaration made on 26 October 2018 by Brett Owers, the Commercial Finance Director of the Opponent, with Exhibits BO-1 to BO-12 (‘Owers declaration’).

3. The Applicant filed the following evidence in answer:

   ·Declaration made on 22 January 2019 by Tracey Carroll, shareholder and director of the Applicant, with Exhibits TC1 to TC9 (‘Carroll declaration’); and

4. The Opponent did not file evidence in reply.

5. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  By letter issuing from IP Australia on 11 June 2019 the parties were notified that as a hearing had not been requested the matter would be given to a delegate of the Registrar for a decision based on the written record.  The letter indicated that the parties had three months from the date of the letter to file any written submissions upon which they wished to rely.  The Opponent filed written submissions on 11 September 2019 (‘Opponent’s Submissions’).  The Applicant did not file any submissions.

6. I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by s 55 of the Act which provides that, unless the proceedings are discontinued, dismissed, or have lapsed under s 54A 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. 

   In doing so I take account of the written record comprised of the materials mentioned in the preceding paragraphs.

   The Opponent

7. The Opponent is an Australian company that is the owner of the trade marks listed below (‘Opponent’s Trade Marks’ or ‘Alchemy Mark(s)’).  The goods for which the Opponent’s Trade Marks are registered are collectively referred to as the ‘Opponent’s Goods’. 

Number	Trade Mark	Priority Date	Goods
606935	ALCHEMY	15 Jul 1993	Class 3: Skin care preparations; hair care preparations; cosmetics; toiletries; dentifrices; soaps for personal use; sunscreens; deodorants; essential oils; perfumery and fragrances.
1449663	ALCHEMY	21 Sept 2011	Class 3: Non-medicated skin care products; cosmetic skin care products; sun skin care products (cosmetics); dermatological cosmetic preparations; dermatological creams (other than medicated); dermatological preparations (other than medicated); liquid soaps; non-medicated soaps; soaps; medicated soap; non-medicated preparations for use in the bath; non-medicated preparations for use in the shower; non-medicated preparations for use on the body; preparations for personal hygiene (non-medicated); hair care preparations; non-medicated hair care products; non-medicated shampoos; medicated shampoos; toiletries; personal deodorants; antiperspirants for personal use; fragrances; perfume; essential oils

1. The relevant claims/statements in the Owers Declaration can be summarised as follows:

   ·     The Opponent purchased the Alchemy business and Alchemy Marks from The Purest Company Pty Ltd in December 2014 and does not have records relating to the use of the mark in Australia prior to 2014.  However the declarant understands that the Alchemy Mark was first used by the Opponent’s predecessor in title in Australia in 1994 and was used between 1994 and 2014 in respect of a range of cosmetics including shampoos and conditioners and body washes.

   ·     The Opponent has since 2014 continued to use the Alchemy Mark in relation to a range of cosmetic products including shampoos, conditioners and body washes.  The Opponent promotes the Alchemy Mark by way of labelling its products, promotional flyers, e-mail mail outs, social media and magazine advertisements.

   ·     The Opponent’s Alchemy brand enjoyed an 8.1% market share of the natural haircare market in Australia (which is 24% of the total hair care market), being the fourth largest natural haircare brand with the product being sold in major department stores and pharmacies such as Priceline and Chemist Warehouse.

2. The Annexes to the Owers Declaration display various marketing material including websites (through the WayBack Machine) that display the Alchemy Mark.  Notably those materials appear to suggest that the Opponent’s use of the Alchemy Mark is focused on natural haircare products with the Opponent’s other cosmetic products sold under different marks.  The Opponent also provides, as confidential annexures to the Owers Declaration, details of the annual sales and promotional expenses for goods bearing the Alchemy Mark in Australia.  In both cases I would describe the sales and marketing figures for 2015-2017 to be moderate but not insignificant, given the size of the market for haircare and cosmetics in Australia.  

3. The relevant claims/statements in the Squires Declaration can be summarised as follows:

   ·     The definition of cosmetics as set out in the Australian Government Department of Health Natural Industrial Chemicals Notification and Assessment Scheme includes soap, shampoo, moisturiser and other products.

   ·     A marketing trend is cosmetic products being marketed as products that cater to spiritual individuals or containing ingredients relating to non-religious ‘spirituality’.  Indeed there are various cosmetic products sold in Australia on which the word ‘spiritual’ is used.

4. The Annexes to the Squires Declaration consist of extracts from websites to support the claims/statements made above and in particular include various internet pages showing the use of ‘spiritual cosmetics’.

   The Applicant

5. The Applicant is an Australian company that has been trading since 2007. 

6. The relevant claims/statements in the Carroll Declaration can be summarised as follows:

   ·     The Applicant began marketing operations under the Trade Mark in 2007 and has used it in respect of various facial oils, creams, cleansers and scrubs.

   ·     The deponent came up with the idea of the Trade Mark in 1998 and is inspired by the Angelic Realm and spiritual connection from the universe. Products sold under the Trade Mark are high-quality facial and body oils and moisturisers using an aromatherapy focus.  The addition of the word ‘spiritual’ to ‘alchemy’ conveys a very different meaning to the word ‘alchemy’ alone, as it conveys an internal personal transformation within the context of the individual consumer.  The Applicant’s products are bespoke and are only sold in small numbers.

   ·     The Applicant has not come across any other traders using the same words or a similar marketing strategy for the Applicant’s products.  The Applicant’s products have been sold to consumers throughout Australia but mostly in the eastern states. 

   ·     The Opponent’s Alchemy brand is not likely to cause confusion with the Applicant’s products as it is primarily a haircare brand and Applicant sells facial and body oils.  

7. The Annexes to the Carroll Declaration show various uses of the Trade Mark and provide some confidential evidence of the sales and advertising expenditure on the Trade Mark, which in the context of the cosmetics industry in Australia is very small (consistent with the evidence of the Applicant of this being a small, bespoke business). 

   Grounds of Opposition, Onus and Standard of Proof

8. As indicated above in the SGP the Opponent nominated grounds of opposition under ss 42(b), 44 and 60 of the Act of the Act. To successfully oppose the application the Opponent needs to establish one of the nominated grounds. As will become apparent, the Opponent has successfully established the ground of opposition pursuant to s 44. Consequently, it is unnecessary that I consider the remaining grounds of opposition. Of course, should the decision be appealed, it would remain open to the Opponent to plead any ground available to it under the Act in proceedings before the Court.

9. The onus of proof in an opposition rests upon the Opponent.[1]  The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[2]  The date at which the rights of the parties are to be determined is 14 November 2017 (‘relevant date’), being the priority date of the application in Australia.[3]

   [1] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32].

   [2] Following Pfizer Products Inc v Karam (2006) 70 IPR 599, [6]-[26], and Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133].

   [3] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595, see also Trade Marks Act 1995 (Cth) s 29(1).

   Discussion

   Section 44

10. The relevant provisions of the Act with respect to the ground of opposition pursuant to s 44 are reproduced below:

    Section 44 - Identical etc. trade marks

    (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)it 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).

    (2)…

    (3)If the Registrar in either case is satisfied:

    (a)that there has been honest concurrent use of the 2 trade marks; or

    (b)that, because of other circumstances, it is proper to do so;

    the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area. 

    Note:  For limitations see section 6.

    (4)If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant's trade mark for a period:

    (a)beginning before the priority date for the registration of the other trade mark in respect of:

    (i)            the similar goods or closely related services; or

    (ii)           the similar services or closely related goods; and

    (b)ending on the priority date for the registration of the applicant's trade mark;

    the Registrar may not reject the application because of the existence of the other trade mark.

    Note 1: An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).
    Note 2: For predecessor in title see section 6.
    Note 3: For priority date see section 12.

    Section 10 - Definition of deceptively similar

    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.

11. To successfully oppose the application pursuant to s 44 of the Act the Opponent must establish the requirements of s 44(1), i.e. that at least one of the trade marks upon which it relies, being a trade mark registered or sought to be registered by a person other than the Applicant:

    ·     has a priority date which is earlier than that of the Trade Mark (‘the first requirement’);

    ·     is substantially identical with or deceptively similar to the Trade Mark (‘the second requirement’); and

    ·     is in respect of similar goods, and/or services which are closely related to, the Applicant’s Goods (‘the third requirement’).

12. In the event that each of these requirements is satisfied by the Opponent it may still be possible for the Registrar to accept the application (or allow it to proceed to registration) if the Registrar is satisfied, pursuant to ss 44(3) and 44(4) of the Act, that there has been honest concurrent use of the Trade Mark, other circumstances which would make registration of the Trade Mark proper, or that the Applicant has continuously used the Trade Mark beginning before the priority date of the Opponent’s relied upon mark.

13. In the present case, were I to find that the requirements above were satisfied, I would not allow the Trade Mark to proceed to registration. There is insufficient evidence of sales and marketing featuring the Trade Mark to show continuous use of the Trade Mark before the priority date (1993) of the earliest of the Opponent’s Trade Marks. In addition the evidence of sales and marketing is of such a low level that I would not be minded to make a finding of honest concurrent use pursuant to s 44(3) of the Act (noting that the extent of use in duration, area and volume is a relevant criterion for a finding of honest concurrent use) and there is no evidence of other circumstances that would make registration of the Trade Mark proper.

14. The Opponent has particularised the ground of opposition in the SGP by reference to the Opponent’s Trade Marks.  Each of the Opponent’s Trade Marks has a priority date that is earlier than the priority date of the Trade Mark.  Each of the Opponent’s Trade Marks is registered for (among other things) cosmetics which encompass the Applicant’s Goods.  The first and third requirements are satisfied.

    Substantially identical and/or deceptively similar

15. I will now consider whether the Trade Mark is substantially identical to the Alchemy Mark (by which I refer to the Opponent’s Trade Marks).  When considering ‘substantial identity’ in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd Windeyer J said:

    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.[4]

    [4] (1963) 109 CLR 407, 414.

16. On a side by side comparison there are clear differences between the respective trade marks being the addition of the word ‘Spiritual’ to the Trade Mark.  This difference is sufficient for me to conclude that the respective trade marks are not substantially identical.  I move then to consider whether the Trade Mark and Alchemy Mark are deceptively similar.

17. The principal authority for guidance in determining whether trade marks are deceptively similar also comes from the judgment of Windeyer J in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd:

    On the question of deceptive similarity, a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity.Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant’s [trade mark].[5]

    [5] Ibid [13].

1. Jacobson J in Millennium & Copthorne International Limited v Kingsgate Hotel Group Pty Ltd summarised the principles of deceptive similarity with reference to the authorities as follows:

   Without seeking to reformulate the various statements of principle stated in the Full Court authorities, it is sufficient for present purposes to identify the critical elements which seem to me to inform the issue of deceptive similarity in the present case. There are nine elements.

   First, the judgment of likelihood of deception is a practical one. It requires an assessment of the effect of the challenged mark on the minds of potential customers: Woolworths[6] at [49]; Australian Woollen Mills[7] at 658.

   Second, the question of deceptive similarity is not to be decided by a side-by-side comparison. It is to be determined by a comparison of the impression based on recollection of the opponent’s mark that persons of ordinary intelligence and memory would have, and the impression that those persons would get from the opposed trade mark: Crazy Ron’s[8] at [73]; Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407 at 415 per Windeyer J.

   Third, allowance must be made for imperfect recollection: Crazy Ron’s at [74].

   Fourth, the effect of the spoken description must be considered: Woolworths at [49]; Crazy Ron’s at [75]; Australian Woollen Mills at 658.

   Fifth, it is necessary to show a real tangible danger of deception or confusion: Woolworths at [43] and [50]; Crazy Ron’s at [76]; Southern Cross Refrigerating[9] at 594 – 595.

   Sixth, 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 the two products come from the same source: Woolworths at [50]; Southern Cross Refrigerating Co at 595. This test sets a lower threshold than that which is required to establish that conduct is likely to mislead or deceive under s 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth): see McWilliam's Wines Pty Ltd v McDonald's System of Australia Pty Ltd [1980] FCA 159; (1980) 33 ALR 394 at 398 per Smithers J.

   Seventh, all surrounding circumstances must be taken into consideration. The circumstances include those in which the marks will be used, and in which the goods or services will be bought and sold, as well as the character of the probable acquirers of the goods and services: Woolworths at [50]; Crazy Ron’s at [86] – [89]; Southern Cross Refrigerating at 595.

   Eighth, the question of whether there is a likelihood of confusion is not to be answered by reference to the manner in which a party has used the mark, but by reference to what an applicant can do. That is to say, the use to which it can properly put the mark if registration is obtained: Woolworths at [50]; Berlei Hestia Industries Ltd v The Bali Company Inc [1973] HCA 43; (1973) 129 CLR 353 at 362 per Mason J.

   Ninth, if a registered trade mark includes words which can be regarded as an ‘essential feature’ of the mark, another mark that incorporates those words may cause a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of those words: Crazy Ron’s at [79]. However, care must be taken to not too readily characterise words in a composite trade mark as an ‘essential feature’ because to do so may effectively convert a composite mark into something different: Crazy Ron’s at [100].[10]

   [6] Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020.

   [7] Australian Woollen Mills Ltd v FS Walton & Co Ltd [1937] HCA 51; (1937) 58 CLR 641.

   [8] Crazy Ron’s Communications Pty Ltd v Mobileworld Pty Ltd [2004] FCAFC 196; (2004) 209 ALR 1.

   [9] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592.

   [10] [2012] FCA 1022, [37]-[46].

2. The  Alchemy Mark is wholly contained within the  Trade Mark.  This alone is not sufficient to make the trade marks deceptively similar.  In some cases, a trade mark conveys an overall conceptual meaning sufficiently different, from another trade mark which is contained within it, such that the trade marks are not deceptively similar. This was found to be the case in, for example, REBELLION vs SOUL REBELLION[11] and JOCKEY vs THROTTLE JOCKEY.[12]  This, however, is not the situation here, rather the proper comparison is a case such as E & J Gallo Winery v Lion Nathan Australia Pty Ltd[13] in which marks containing BAREFOOT and BAREFOOT RADLER were found to be deceptively similar.  There are a number of factors that are relevant to this consideration, including most importantly, whether the additional element changes the idea and impression of the mark as a whole.

   [11] Chris Kingsley v David Scott [2011] ATMO 20.

   [12] Jockey International Inc v Darren Wilkinson [2010] ATMO 22.

   [13] [2008] FCA 934.

3. Notwithstanding the Applicant’s submissions (made in the Carroll declaration) that the addition of the word ‘spiritual’ to ‘alchemy’ conveys an internal personal transformation within the context of the individual consumer which is different to the meaning of alchemy, I find that the Trade Mark does not, as a whole, convey a conceptual meaning that is sufficiently different to that conveyed by the Alchemy Mark.  ‘Alchemy’ refers to the change or conversion of one type of matter to another type of matter and in the context of the Applicant’s Goods, refers to the effect of cosmetic products in changing or improving one’s appearance.  Given the nature of the Applicant’s Goods, which again are cosmetic products, the addition of the word ‘spiritual’ to the word ‘alchemy’ would convey that either:

   a)the cosmetics are Alchemy products that contain spiritual elements or have a spiritual quality; or

   b)that the effect of the Applicant’s Goods is to change or transform one’s appearance, that would have the additional effect of changing or transforming one’s spiritual self. 

4. This does not change the overall idea and impression of the mark as a whole in the same way that SOUL REBELLION or THROTTLE JOCKEY do.  Ultimately, the impression given by both the Trade Mark and the Alchemy Marks, in the context of the Applicant’s Goods is one of change and transformation. As such, I find that the word ALCHEMY is, in the Trade Mark, a primary distinctive element and indicator of trade source.  For this reason, consumers would be likely, at least, to be caused to wonder whether the trade source of the Opponent’s Goods and the trade source of the Applicant’s Goods are one and the same.  The trade marks are, therefore, deceptively similar.  The Opponent has established this ground of opposition.

   Decision

5. I have found the Opponent has established the ground of opposition it raised pursuant to s 44 of the Act. As the delegate of the Registrar I accordingly refuse to register the Trade Mark. I direct that the refusal be recorded one month from the date of this decision. If the Registrar is served with a notice of appeal before that time, I direct that the refusal shall not occur until the appeal has been withdrawn or discontinued. Otherwise the disposition of this application should be in accordance with the Court’s orders or directions.

   Costs

6. The Opponent has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. I accordingly award costs against the Applicant under section 221 of the Act in the relevant amounts under Schedule 8 of the Trade Mark Regulations 1995 (Cth).

   Nicholas Smith
   Hearing Officer
   Delegate of the Registrar of Trade Marks
   6 October 2020