Merck KGaA v Generic Health Pty Ltd
[2007] ATMO 1
•15 January 2007
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Application 1041864(5),(35) SASTIN to register a trade mark by Generic Health Pty Ltd and opposition thereto by Merck KGaA.
Delegate: Iain Thompson Representation: Applicant. Written submissions by Justin Vaastra of Arnold Bloch Leibler Opponent: Trevor Stevens of Davies Collison Cave Decision:
- s52 proceedings – ss 44 and 60 – evidence does not establish reputation of trade mark ZACTIN on which the opponent relies; trade marks SASTIN and ZACTIN not deceptively similar, discussion of impact of public policy issues in comparison of trade marks, opposition not established.
Background
Generic Health Pty Ltd (‘the applicant’) of Elsternwick, Victoria, has filed application to register a trade mark, current details of which are:
App No: 1041864
Filing Date: 14 February 2005
Goods:Class: 5 Pharmaceutical preparations and substances
Class: 35Distribution of goods; import services not being transport services
Trade Mark: SASTIN
Following advertisement of acceptance of the trade mark for possible registration on 16 June 2005, Merck KGaA, of Darmstadt, Germany, (‘the opponent’) served and filed Notice of Opposition to registration of the trade mark on 12 September 2005. The opponent has served and filed evidence in support of its opposition in accordance with the Trade Marks Act 1995 (‘the Act’) and regulations thereto. The applicant has not served and filed evidence in answer.
Prior to the hearing before me as a delegate of the Registrar of Trade Marks in Sydney on 16 October 2006, Justin Vaastra of Arnold Bloch Leibler, Solicitors, filed written submissions for the applicant; Trevor Stevens of Davies Collison Cave, Patent & Trade Mark Attorneys, represented the applicant at the hearing.
The submissions of the parties focussed on sections 44 and 60 of the Act.
Evidence
The evidence comprises a statutory declaration by Mark Hurley, Business Development Manager of Alphapharm Pty Ltd, a wholly owned subsidiary of the opponent, with exhibits 1 to 4. There are also four trade declarations served and filed in support of the opposition by dispensing pharmacists Messrs Stephen Thompson, Terry Herfort, Ian Gillard, and William Morgan. I will state now that these trade declarations which are in the form of a questionnaire cannot be regarded as being of high probative weight: the four declarations are in common form with spaces left for the answers to questions, the most relevant one of which is:
Based on my experience within the pharmaceutical industry it is my opinion that the word SASTIN is sufficiently similar to trade mark ZACTIN to cause confusion if applied to the same or similar goods. This opinion is based on the following considerations – that is:
___________________________________________________________________________________________________________________________________________________________________________________________________
The lines underneath are left for a handwritten ‘answer’. However, the printed portion of the proforma declarations do not allow for any other conclusion but that the trade marks are confusingly similar. Additionally, the declarants do not state that they personally would be confused by the similarity of the trade marks – they state that they are of the opinion that the trade marks are sufficiently similar to cause confusion amongst other people who include patients, pharmacists, and doctors. Such trade declarations can be afforded more weight if they are couched in such a way that it is obvious that the declarant freely states that he or she personally would be, or is, or has been, confused by the similarity of the trade marks. It is additionally unclear as to whether these dispensing pharmacists were the only ones approached in a survey or whether they were the only ones who could be found who agreed with whoever it was who approached them.
Mr Hurley attests to the registration of the opponent’s trade mark ZACTIN under 659362 in Australia. This registration is in Class 5 of the International (Nice) Classification of Goods and Services for, “Pharmaceutical preparations for the treatment of major depressant disorders.”
The opponent’s trade mark is, Mr Hurley says, used in Australia in relation to a drug to treat major depressant disorders and obsessive compulsive disorders.
This pharmaceutical sold under the opponent’s trade mark ZACTIN is available only on prescription by a doctor and is a serotonin reuptake inhibitor.
There is a wide range of pharmaceuticals that are contra-indicated once the opponent’s pharmaceutical sold under the trade mark ZACTIN has been prescribed for a patient.
The latter part of Mr Hurley’s evidence relates to the dangers that might arise through the confusion of pharmaceuticals which have similar looking or sounding trade marks. There are several articles or reports in this part of the evidence and I will discuss this issue in general, and this evidence, as is necessary in the course of my decision.
There is no evidence as to the nature of the pharmaceutical presently sold under the opposed trade mark although this is mentioned in the submissions of the applicant. What I am to consider, however, is the effect of the fair use the opposed trade mark by the applicant on all of the goods for which registration is sought: Re Smith Hayden and Co's Application (1946) 63 RPC 97 at 101.8:
Assuming a use by the proprietor of each of the cited trade marks in a normal and fair manner in respect of any of the goods covered by those registrations, is the court satisfied that there will be no reasonable likelihood of deception and confusion amongst a substantial number of persons if the applicant for registration (the respondent to this application) also uses its mark normally and fairly in respect of goods covered by the proposed registration.
Accordingly, although I am aware of the nature of the applicant’s pharmaceutical, this is not of immediate relevance to my decision.
Grounds
It is common ground between the parties that:
· The trade marks are not substantially identical;
· The goods in question are goods of the same description for the purposes of subsection 44(1); and,
· The opponent’s trade mark registrations on which it relies for the purposes of subsection 44(1) have earlier priority dates than that of the opposed application.
What is in contention between the parties is whether;
· the opponent’s trade mark had a reputation at the priority date of the opposed application sufficient to found objections under section 60; and,
· If the trade marks are deceptively similar.
If the opponent establishes both of the factors listed under the preceding paragraph, it has established its grounds under both section 44 and 60 of the Act.
Reputation
The tests in assessing the reputation of a trade mark are to be found in McCormick & Company Inc v McCormick [2000] FCA 1335. Kenny J, having found that the trade marks in question were substantially identical or deceptively similar, posed the question this way at paragraph 81:
What is intended by the word "reputation" in s 60? The word is defined in The Macquarie Dictionary as follows:
reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.
Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to "the recognition of the McCormick & Co marks by the public generally".
Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public's mistakenly attributing a business connection between the two or attributing her product to the company?
There is no specific evidence that goes to establish the reputation of the opponent’s trade mark ZACTIN. There are no figures as to the revenue under the trade mark, or amounts expended on its promotion, or examples of its promotion. Indeed, although it is plain from the evidence that use of the opponent’s trade mark has started in Australia and the trade mark was specified (and the pharmaceutical in respect of which it is used was described) in the MIMS Biomonthly Australia of June 2005, it cannot be established from the evidence when that use started or whether that use was before the priority date of this opposed application: 14 February 2005.
As the opponent has not established that its trade mark had a reputation at the priority date of the opposed application, it follows that the opponent cannot establish its opposition under section 60 of the Act.
Deceptive Similarity
Deceptive similarity is defined within section 10 of the Act which provides:
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.
As regards ‘deceptive similarity’, French J said in Registrar of Trade Marks v Woolworths [1999] FCA 1020, at paragraph 50:
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 The Bali Company Inc (1973) 129 CLR 353 at 362:
"...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."
The test is not to be applied to the trade marks side by side but rather from the impression of the trade marks which is likely to be formed by the public. In the words of Dixon and McTiernan JJ in Australian Woollen Mills Ltd v F.S.Walton & Co Ltd, (1937) 58 CLR 641 at page 658:
In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.
All of the surrounding circumstances are to be taken into consideration, including the market context. In Re Application by the Pianotist Co Ltd (1906) 1A IPR 379 at 380; 23 RPC 774 at 777), Parker J said:
You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion -- that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods -- then you may refuse the registration, or, rather, you must refuse the registration in that case.
In arguing that the trade marks are deceptively similar, Mr Stevens says:
· Both of the trade marks are invented words and thus have no fixed point of reference for a person who sees or hears the words – the words do not contain or impart any meaning by which they may be separately remembered, The words are thus more likely to be confused than words with ordinary English meanings.
· Both words have two syllables and the identical number of letters.
· The words have phonetically similar beginnings: that is the letters ‘Z’ and ‘S’ are both dental alveola fricatives. In this regard, Mr Stevens at the hearing gave me an extract from the chapter ‘Preliminaries’, photocopied from the book, Generative Phonology by Kenstowicz and Kisseberth published by Academic Press.
· The vowel following the initial letter is identical.
· The letter which is most dissimilar, the letter ‘C’ occurs in the middle of the word and is thus ‘swallowed’.
· Both syllables in the trade marks are likely to be stressed
· The suffix –TIN in common between the trade marks might cause people to wonder if a ‘series of trade marks were being adopted to suggest a common origin of goods.
And in arguing that the trade marks of the parties are not deceptively similar, Mr Vaastra says:
· The trade marks are visually and aurally dissimilar.
· The trade marks only share the letter ‘A’ in the ‘prefix’ and a common suffix.
· The fact that the trade marks are made up words does not affect the fact that they look different: Kowa Company Ltd v NV Organon [2005] FCA 1282
· The central letter ‘C’ in the opponent’s trade mark gives it a harder sound that that given in the applicant’s trade mark where the central letter ‘S’ gives in a softer sound.
Discussion
Much of the detailed analysis of the trade marks by the parties is, in my opinion, irrelevant to my considerations. Such detailed analysis relies on having the trade marks side-by-side and engaging in a minute letter-by-letter and syllable-by-syllable comparison of the trade marks. Such comparison is proscribed by the authorities such as Australian Woollen Mills, above, which stress that the comparison is one of general impression of the trade marks set against the marketplace of the relevant goods, how they enter trade, and the likely effect on customers.
The initial factor to be addressed is the weight that Mr Stevens would have me accord the evidence of the effects of confusion of the kind of goods which are here under consideration – pharmaceuticals.
The evidence which is said to go to this issue is an article from the October 2002 issue of the MBF Good Health News Magazine entitled High Alert on Medical Mixups; an article from Virtual Hospital ( – Look-Alike, Sound-Alike Drug Name Confusion – this is apparently about instances of confusion in the United States of trade marks other than those before me; an article from the United States Food and Drug Administration ( – Strategies to Reduce Medication Errors; and, the Second National Report on Patient Safety – Improving Medication Safety, by the Australian Council for Safety and Quality in Health Care in July 2002 (‘the ACSQHC Report’).
The publications are concerned at least in part with the causes and effects of the confusion of one pharmaceutical for another and the prescription of sound-alike or look-alike medicines or error in dispensing look-alike or sound-alike medicines.
An initial problem with this evidence is that, by-and-large, it is of a very general nature. While it specifies pharmaceuticals with names which are generally similar are said to have been confused, there is little about the rate at which such confusion occurs or whether the confusion occurred because of a likelihood of confusion, or whether that confusion occurred because there was a possibility of confusion, or that the confusion was improbable but has occurred because some degree of error in a human system is statistically inevitable. (In other words, the substitution of drugs with these names was quite unlikely but occurred anyway, because the doctor, pharmacist, or nurse involved was tired, overworked, stressed, or slipshod in their approach). In short, this evidence does not speak to the sorts of tests which are to be applied in this forum which are ones of balance and degree.
In 2002, 190 million prescriptions were written by doctors in Australia (the ACSQHC Report). Against this very large figure, a very low percentage rate of error can thus make any problem with very slight systems failures in the doctor/pharmacist/patient ‘chain’ appear to be vast – however, the ACSQHC Report repeatedly stresses that some degree of human error is inevitable. The report’s recommendations are aimed at systems design which will minimise these errors. Significantly, there is no mention of a problem with any alleged similarity of drug names in the ACSQHC Report’s recommendations for improvements in the system.
The other problem with this type of evidence is that it invites an importation of general health policy considerations into the comparison of the trade marks under section 44 rather than to provide concrete evidence about the marketplace in which the goods are sold.
This ‘policy’ approach to the issue appears to me to go very much to the exercise of a discretion by the Registrar of the type that was present in the Trade Marks Act 1955. However, the import of general policy issues into considerations of the type of matter before me under section 44 is one that is not appropriate under the Trade Marks Act 1995. As observed by French J in Registrar of Trade Marks v Woolworths [1999] FCA 1020:
The grounds for non-acceptance of an application to be found in Division 2 of Part 4 of the Act substantially reflect grounds for non-acceptance set out in recommendation 6A of the 1992 Working Party Report. It was said in the Report:
"These grounds have been formulated with the aim of excluding matters which are considered inappropriate for a bureaucracy to determine, such as matters of morality or fraud, and with general principles in mind that it should be procedurally straightforward to obtain registration of a trade mark, and procedurally straightforward to have one removed from the Register. This aim can be achieved, at least in part, by defining clearly the grounds on which an application may be denied registration, as well as those whereby the registration may be rectified or removed." (p 44)
Deputy Registrar Hardie also commented on this kind of issue in Schering Aktiengesellschaft v Bracco International B.V [1999] ATMO 89:
I do take note, however, of Ms Freeman's reference to Edward's Application [(1946) 63 RPC 19 - the JARDEX/JARDOX case] and her submissions that, where medical products are concerned, there is strong public interest in precluding even small risks if there is a possibility of dangerous consequences.
Edward's Application however, was decided not on the basis of a real likelihood of risk, but on an exercise of the Registrar's discretion. That discretion does not exist under the Trade Marks Act 1995. The provisions of section 44 as analysed and explained by Justice French [see Woolworths, above] require a positive finding that a risk of deception or confusion is likely. [Parenthetical material added]
This evidence of the effects of confusion in the marketplace for pharmaceuticals is thus of weight only inasmuch as it provides incidental information on the nature of the marketplace – however, there appears to be much of the operation of the marketplace that the material does not address.
For instance, it is my general observation of medical practices that handwritten prescriptions, whether legible or not, are very much on the decline. Amongst the recommendations of the reports and articles in evidence is one that doctors print when writing prescriptions and include the generic name of the drug which is being prescribed. Most patient records in practices of any size are now computerised and prescriptions generated via a computer and printer. Additionally, it would appear to be mandated by the Australian Pharmaceutical Manufacturers Association (APMA) that:
Promotion of prescription pharmaceuticals sold under the trade marks is limited to physicians
All promotional material for such pharmaceuticals has the trade mark, brand name and generic name of the product clearly visible
(Eli Lilly and Company v Douglas Pharmaceuticals Limited [2003] ATMO 45)
In fact, the marketplace for prescription pharmaceuticals appears in my observations to be one of the most tightly regulated in Australia and with the best-trained and educated professionals (nurses, doctors, and pharmacists) working within it.
Additionally, as regards patient confusion, to contemplate such confusion on the part of a patient and consequent adverse effects needs me to presuppose that a medical practitioner would prescribe two drugs with trade marks which are both generally similar and are also contra-indicated to the same patient. Another possibility is that, if the opposed goods are non-prescription pharmaceuticals, I am asked to suppose that the patient has being prescribed the one, then self-selected the other from a pharmacy, placed them into the same medicine cabinet, then confused them. In other words, I am being asked to assess the likelihood of a chain of coincidences or accidents. I suppose that these events could conceivably happen but it does not appear probable to me that the existence of such circumstances are ‘likelihoods’ such that they should accorded much weight here. As I have also inferred, to postulate the likely existence of such circumstances, leads me out into the consideration of policy and an exercise of a discretion that I do not have. This approach would also require me to consider the disposition of the goods after they have passed out of trade and into the possession of the customer or patient.
Speculations as to how two pharmaceuticals with names which are generally similar might potentially have similar packaging and could end up in the same medicine cabinet and be possibly be mistaken for each other would be mere conjecture. Such a hypothesis has no substantial weight in a reasoned assessment of whether the trade marks are, on balance, deceptively similar.
The other item that Mr Stevens wishes me to take notice of is the photocopied extract from the book, Generative Phonology by Kenstowicz and Kisseberth published by Academic Press.
However, I am quite concerned that this material is evidence which should have been served and filed prior to the hearing. This material seems to me to be more akin to expert commentary on the similarity of parts of the trade marks and not being general information of which I (or the applicant) might be informed from a readily accessible source such as the on-line Register of Trade Marks, which is searchable via ATMOSS on the Internet. It would not appear to afford the applicant natural justice if I were to rely on this phonetic evidence as the applicant has not had the opportunity to comment on it.
Further, I have contextual difficulties with this material which is, as I have noted, a partial extract photocopied from a chapter called ‘Preliminaries’. It is not clear to me that the material addresses the alleged similarity of the trade marks in the circumstances before me. While, for example, the material addresses the general similarity of the ‘S’ and ‘Z’ sounds, it is not clear whether there might other material later in the book which might qualify this information according to where the letters might fall in a word or according to the word’s origins or construction. It is notorious in English that letters might change their sound, even if used in the same relative position within words – such as the first letter ‘C’ in the words CANE and CIRCLE. Thus, even if the applicant had seen the material and had opportunity to comment on it, I would be hesitant in the circumstances before me to put any great weight upon it.
Accordingly, I prefer to use my own impressions of the trade marks, common sense, and knowledge of the world, in relation to the assessment of whether the trade marks are deceptively similar. As observed by Heerey J in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 at 501:
The question whether the use of a mark is likely to deceive or cause confusion is in the end a question of impression and common sense; it is a “jury question” in which the judge is entitled to give effect to his or her own opinion as to the likelihood of deception or confusion: Murray Goulburn Co-op Ltd v New South Wales Dairy Corp (1990) 24 FCR 370; at 377; 16 IPR 289; at 296.
The trade marks do not appear to me to be deceptively similar.
The ‘suffix’ –TIN is one which is quite common within pharmaceutical trade marks. At the time of writing this decision, there are some 240 registered and pending trade marks in the names of many different traders which incorporate this ‘suffix’. I do not think that it is any more probable that the opponent’s trade mark ZACTIN will be confused with the opposed trade mark on this basis than would the opponent’s trade mark be confused with any of the one hundred or so earlier registrations which incorporate the ‘suffix’ – TIN.
Thus, while the ‘suffix’ –TIN has no obvious facility in relation to the goods, it is not one that denotes, or is particularly associated with, a single source in trade.
However, to impose this particular analysis on the trade marks might well be a fallacy. The opponent’s trade mark may also be perceived by professionals in the marketplace for these goods as being the alphabetical letter Z followed by the ‘suffix’ –ACTIN which is used to denote a ray, or beam of light, and thus has some poetic use in relation to a drug used to treat depressive or compulsive disorders. There are some seventeen registered and pending trade marks for pharmaceuticals on the IP Australia data-base that have this ending which might be regarded as a true suffix. The opposed trade mark is not susceptible to this analysis.
With the above paragraph also in mind, the ‘prefixes’ ZAC- and SAS- (if this analysis is appropriately imposed on the trade marks) are, to my mind, quite different. It is true that there may be some phonetic similarity between the initial letters – just how far that similarity might affect the memory and perceptions of a trained professional is obviously a matter of some conjecture but I do not think that the similarity is so pronounced that it would be likely to result in confusion of the one ‘prefix’ for the other or be seen as denoting a common source in trade or resulting in confusion.
The trade marks, considered as wholes, are such that there is no real or substantial risk that a reasonable person (or a number of people in the relevant class of likely purchasers) will be caused to wonder if the goods come from the same source or to confuse the one for the other. (See, for example, Kowa Co v NV Organon (2005) 223 ALR 27). I think that there is a strong likelihood that many professionals in the marketplace will view the trade marks as being compounded in different ways, the one being the ‘prefix’ SAS- followed by the ‘suffix’ –TIN and the other being the alphabetical letter ‘Z’ followed by the ‘suffix’ –ACTIN. Even if the trade marks are not viewed in this way, I consider that there is no real risk or likelihood of confusion.
Thus, when the above factors are considered and weighed, the trade marks are not, as I have already noted, deceptively similar.
Accordingly, the opposition in terms of section 44 is not established.
Decision
Section 55 of the Act provides:
Decision
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.
The opponent has not established its grounds under which the opposition was argued at the hearing under sections 44 and 60 for the reasons stated above. For the sake of completeness, I note that those other grounds listed on the Notice of Opposition have not been established.
Trade mark application number 1041864 may therefore 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 the disposition of the application be in accordance with the Court’s direction or order.
Costs
As the applicant has been successful in these proceedings, I order costs against the opponent at the scale set out in the regulations.
Ian Thompson
Hearing OfficerTrade Marks Hearings
15 January 2007
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