Mercury Retail Pty Ltd v Nile Clothing AG

[2015] ATMO 59

TRADE MARKS ACT 1995

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

Re:Opposition by Mercury Retail Pty Ltd to extension of protection of International Registration Designating Australia 1462657 (IR 771848) (35) NILE SPORTSWEAR Logo in the name of Nile Clothing AG

Delegate:	Michael Kirov
Representation:	Opponent: Nick Weston of Nicholas Weston Lawyers Holder: Did not appear
Decision:	2015 ATMO 59 Regulation 17A.34 opposition: Ground corresponding to s 44 of the Act considered – Opposed trade mark deceptively similar to Opponent’s earlier registered trade mark and claims similar services – extension of protection to Australia refused.

Background

1. Trade mark application number 1462657 is the Australian designation of a request made under the Madrid Protocol by Nile Clothing AG (“the Holder”) to extend protection of the trade mark subject of its international registration 771848 to Australia (“the IRDA”).  Current details of the IRDA are as follows:

Application No:         1462657

Filing Date:                20 May 2011

Services:Class 35: Data systemization and collection in computer data banks; computerized file management, all the services mentioned above excluding retail sale or on-line retail sale services in connection with jewelry or similar goods

(“the Holder’s Services”)

Trade Mark:  (“the Opposed Mark”)

1. After examining the IRDA, IP Australia advertised on 16 January 2014 its intention to extend protection for the Class 35 services listed above.  Mercury Retail Pty Ltd (“the Opponent”) subsequently filed a Notice of Intention to oppose this on 13 March 2014, followed by a Statement of Grounds and Particulars (“SGP”) on 10 April 2014.  As Jethro Marks, a Director of the Opponent, indicates in the SGP, the Opponent is the owner of earlier Australian trade mark registration 1277035 THE NILE (“the Opponent’s Mark”) in Class 35, covering what the Opponent says are similar services to the Holder’s Services.  Mr Marks goes on in the SGP to describe the Opponent’s business activities under the Opponent’s Mark:

   [The Opponent] uses the [the Opponent’s Mark] in respect of the [services for which it is registered] to operate an online retail distribution business. The company began operating from New Zealand in 2003 and sales commenced into the Australian market in 2004.  The [Opponent’s] physical presence and operations transferred to Australia in 2007.  The [Opponent’s] Mark is used on all facets of advertising and promotions both print and online and on all documentation and paperwork related to [the Opponent].  The business plan for [the Opponent] is loosely modelled on the business plan for US online retailer AMAZON.  [The Opponent] commenced operations as a bookseller but by February 2011 had expanded to all of the goods listed in Classes [sic] 35 in [the Opponent’s Registration] in accordance with our intentions when the Company was formed back in 2003.  My company has established a reputation in [the Opponent’s Mark] in the Australian market.

   [The Opponent’s Mark] has extensive and broad online coverage.  [The Opponent] has since 2006 run a website [“the Website”].  A visit to the Internet Archive Wayback Machine at demonstrates a screen capture of the home-page of the [Website] displaying the range of products marketed under [the Opponent’s Mark] and representing some of the goods listed in Classes [sic] 35.  [The Opponent] also operates 2 eBay stores under the [Opponent’s Mark] (the_nile_au and thenile_fashion) which have been in operation since 2009.  The eBay store “thenile_fashion” became known as “the_nile_au_stores” in September 2012.  The [W]ebsite and eBay Stores have been continually updated and expanded over time and by February 2011 all product lines of the goods listed in Classes [sic] 35 were available from either THE NILE eBay Stores or [the Website], or both.

   The Opponent has used [the Opponent’s Mark] internationally since 2006, with products available from [the Website] being sold in over 194 countries.

   To further emphasise [the Opponent’s Mark’s] online presence [The Opponent] has sold various fashion brands on a number of our eBay stores with seller I.D.s comprising the [Opponent’s Mark] followed by the descriptive word “stores” in one case, in another case comprising the [Opponent’s Mark] followed by the descriptive word “fashion” and in another case comprising the [the Opponent’s Mark] followed by the letters “au”.

2. Through its Australian attorneys, Shelston IP, the Switzerland based Holder filed a Notice of Intention to Defend on 16 May 2014.

3. The Opponent’s evidence in support consists of a statutory declaration by Jethro Marks, made on 25 August 2014, with Exhibits JM1 to JM10.

4. The Holder has not filed any evidence in the proceedings.

5. I heard the matter as a delegate of the Registrar of Trade Marks in Melbourne on 26 May 2015.  Shelston IP had earlier advised that the Holder would not be represented at the hearing and confirmed by email on 6 May 2015 that neither would the Holder be filing any written submissions.  Nick Weston of Nicholas Weston Lawyers appeared for the Opponent.  Mr Weston’s oral submissions were supplemented by written submissions emailed to the Holder’s representatives and to me on 19 May 2015.

Grounds of Opposition, Onus and Standard of Proof

1. The SGP lists grounds corresponding to ss 43, 44, 59 and 60 of the Trade Marks Act 1995 (“the Act”) and to succeed in its opposition the Opponent bears the onus of establishing at least one of these four grounds.  I proceed on the basis that the relevant standard of proof required is the ordinary civil standard based on the balance of probabilities.[1] At the hearing Mr Weston indicated that the Opponent would only be pressing the grounds based on ss 44 and 60 of the Act. As will become apparent I have in fact only found it necessary to address the s 44 ground in this decision and this is discussed below. Of course should the decision be appealed, it would always remain open to the Opponent to plead any ground it considered relevant in proceedings before the Court.

   [1] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599 at [6] to [26].

The Relevant Date

1. As indicated by Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd[2] the relevant date at which the rights of the parties are to be determined is the filing date of the opposed application, in this case 20 May 2011 (“the Priority Date”).

Discussion

[2] (1954) 91 CLR 592 at 595. See also the discussion by Yates J specifically in relation to IRDAs in Apple Inc v Registrar of Trade Marks (2014) 109 IPR 187 at [32]-[59].

Section 44

1. The ground based on s 44 of the Act is particularised in the SGP as follows:

   Contrary to Section 44 of the Act, the [Opposed] Mark is substantially identical with or deceptively similar to the [Opponent’s Mark] and the [Holder’s Services] are identical or at least similar to the class 35 services covered under the Opponent's registration.

2. Only s 44(2) of the Act is relevant in this case and this is set out below:

Identical etc. trade marks

44.(2) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of services (applicant's services) 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 services or closely related goods; or
(ii) a trade mark whose registration in respect of similar services or closely related goods 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 services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

Note 1:  For deceptively similar see section 10.

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

1. As mentioned, the Opponent’s s 44 ground is underpinned by its registration 1277035, relevant details of which are set out below:

Registration No:         1277035

Filing Date:                11 December 2008

Services:Class 35: Distribution services being the wholesale and retail sale of books, magazines and e-books, music, videotapes, cassette tapes, compact discs and DVDs, clothing, shoes, hats, footwear and headgear, computer software, computer and video games and office products; providing online marketplaces for the foregoing; providing searchable online advertising directories for the foregoing; advertising and advertisement services; business consulting and advisory services; promoting the goods and services of others

(“the Opponent’s Services”)

Trade Mark:              THE NILE

1. Registration 1277035 has a priority date earlier than that of the Opposed Mark. Accordingly for the Opponent’s s 44 ground to be established, I would need to be satisfied on the balance of probabilities that:

• the IRDA covers “similar services”[3] to the Opponent’s Services; and

• the Opposed Mark is “substantially identical” with, or “deceptively similar” to, the Opponent’s Mark.

  [3] As defined in s 14(2) of the Act, namely the same services or services “of the same description”.

1. On the question of similar services, Mr Weston said:

   We submit that the [Holder’s Services] that concern “data systemization and collection in computer data banks; computerized file management, all the services mentioned above excluding retail sale or on-line retail sale services in connection with jewelry or similar goods” are similar goods [sic] to those of the opponent within the meaning of section 14 of the Act and having regard to their respective uses and trade channels through which the goods are bought and sold. Online business requires this kind of marshalling of data and relational databases.

2. Notwithstanding Mr Weston’s references to “goods” rather than “services” in the above-quoted submission, I do agree that the Holder’s Services are on the face of it “similar” in terms of s 14(2) to at least some of the Opponent’s Services, particularly those specified as “providing searchable online advertising directories for [wholesale and retail distribution services of a wide range of goods]”. Such services strike me as being within the range of fair notional use the Holder might make of the Opposed Mark were its protection extended to Australia as presently sought.

3. The essential issue for determination is accordingly whether the Opposed Mark is substantially identical with, or deceptively similar to, the Opponent’s Mark.  At the hearing Mr Weston did not however press the claim that the marks are “substantially identical”, but did submit they are “deceptively similar” and so this is the issue to which I now turn.

4. Mr Weston’s submissions on the question of deceptive similarity were brief and essentially confined to the below quotation from the judgment of Luxmoore CJ in Rysta Ltd’s Application[4] highlighting the need to make allowance for imperfect recollection by potential users of the parties’ services:

   The answer to the question whether the sound of one word resembles too nearly the sound of another so as bring the former within the limits of s 12 of the Trade Marks Act, 1938, must nearly always depend on first impression, for obviously a person who is familiar with both words will neither be deceived nor confused.  It is the person who only knows the one word, and has perhaps an imperfect recollection of it, who is likely to be deceived or confused.  Little assistance, therefore, is to be obtained from a meticulous comparison of the two words, letter by letter and syllable by syllable, pronounced with the clarity to be expected from a teacher of elocution.  The court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description, but also of the shop assistant ministering to that person’s wants.  [Mr Weston’s emphasis retained]

   [4] (1943) 60 RPC 87 at 108-109.

5. That said, s 10 of the Act defines the term “deceptively similar” as follows:

   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.

6. The distinction between the terms “to deceive” and “to cause confusion” was addressed by the Full Federal Court in The Coca-Cola Company v All-Fect Distributors Ltd,[5] where in a joint judgment Black CJ, Sundberg and Finkelstein JJ said the following at [39]:

   Section 10 of the Act provides that a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion. No intention to deceive or cause confusion is required: Re Bali Brassiere Co Inc's Registered Trade Mark (1968) 118 CLR 128 at 139. The distinction between “likely to deceive” and “likely to cause confusion” lies not in some element of culpability in the user to be inferred from the word “deceive”, but in the effect of the mark on prospective purchasers. In Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410 at 423 Richardson J, in the New Zealand Court of Appeal, said:

   “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.

   [5] (1999) 96 FCR 107; 47 IPR 481.

7. Moreover, as far as “confusion” in particular is concerned, Dodds-Streeton J highlighted in Tivo Inc v Vivo International Corporation Pty Ltd[6] (“Tivo 1”) that:

   It is well established that trade marks may be deceptively similar for the purposes of ss 44(1) and (2) of the Act even if confusion is unlikely to persist up to the point of, and contribute to, inducing sale.

   [6] [2012] FCA 252 (19 March 2012) at [105].

8. I note that Dodds-Streeton J’s ultimate finding in that case, (that  was deceptively similar to TIVO in the context of audio-visual products), was upheld on appeal to the Full Federal Court[7] in Vivo International Corporation Pty Ltd v Tivo Inc[8] (“Tivo 2”).

   [7] Keane CJ (as he then was), Nicholas and Dowsett JJ.

   [8] (2012) 99 IPR 1.

9. Specific guidance in assessing deceptive similarity is generally found in Australian Woollen Mills Ltd v FS Walton & Co Ltd[9] where, as Dixon and McTiernan JJ put it in their joint judgment in a familiar passage at 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.

   [9] (1937) 58 CLR 641.

10. I note their Honours’ specific references in the above quote to the fact that, “The effect of spoken description must be considered” and that “similarities both of sound and of meaning may play an important part” in assessing whether marks are deceptively similar.  In this regard the minor stylization of the Holder’s Mark as a whole, dominated as it is by the element NILE, may be discounted to a large extent for comparison purposes, a matter reinforced by the decisions in Tivo 1 and Tivo 2. It is perhaps germane also to note in this regard that s 7(2) of the Act explicitly states:

    To avoid any doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, a use of the trade mark.

11. In the present matter then, I should attempt to assess the effect or impression produced on the mind of potential users of the Holder’s Services, who know of the Opponent’s Mark (and perhaps have an imperfect recollection of it), when they encounter such services being offered under the Opposed Mark.  This may of course arise, inter alia, in the course of radio advertising or telephone enquiries.  It is enough if the person of ordinary intelligence and memory would be caused to wonder, or be left in doubt, about whether the parties’ services come from the same source.

12. As the decision of the Full Federal Court in Tivo 2 affirms, two marks may be considered deceptively similar not only because consumers might think them related in the sense that the goods or services sold under them come from the same source, but due also to their simply being mistaken one for the other because of their phonetic similarity.  As mentioned earlier, in Tivo 2 the Court (unanimously) upheld Dodds-Streeton J’s finding at first instance that the trade mark  was deceptively similar to the trade mark TIVO in the context of audio-visual products.  At [159] of his judgment Nicholas J (with whom Dowsett J agreed) noted:

    My decision on the s 44(1) point turns not on any risk that the two marks might be confused as being related, but on the basis that they exhibit a strong phonetic similarity, and that consumers of ordinary memory and intelligence who had an imperfect recollection of one or other of the marks might not appreciate that the brand name referred to in the course of discussions taking place prior to sale was different to that which the consumer had previously seen or heard.[10]

    [10] See also Nicholas J’s judgment at [107]-[108] and [152]-[160] generally.

13. His Honour had earlier made it clear that it was the “strong phonetic similarity” of the TIVO and  marks alone that led him to conclude they were deceptively similar and that he accordingly did not consider the stylization of the  mark was significant.  As he explained at [152]-[154]:

    [152] The question whether the application for registration of the Vivo trade mark should have been rejected in accordance with the requirements of s 44(1) of the Act raises a number of considerations.

    [153] As previously explained, the question must be addressed on the footing that the primary judge’s finding of deceptive similarity was based upon phonetic similarity and that her Honour’s rejection of TiVo’s case based upon visual similarity was not challenged on appeal. This creates an element of complexity in what some might otherwise regard as a relatively straightforward case. The way in which the appeal has been conducted has prevented me from concluding that the Vivo trade mark is deceptively similar to the TiVo trade mark based upon a visual comparison of the marks.

    [154] The Vivo trade mark is a composite word and device mark. The word “Vivo” is the dominant element of the mark. I doubt that the device that forms part of the mark would make any lasting impression on the mind of most consumers. Consumers who wish to refer to Vivo products in written or oral communications will almost certainly do so using only the word component of the mark.

14. Keane CJ also concluded that  was deceptively similar to TIVO based on the marks’ aural similarity alone, noting that this was notwithstanding the marks began with different letters:

    [74] It is readily apparent from the reasons of the primary judge that the absence of visual similarity between the two trade marks did not escape her Honour’s attention. Notably, the primary judge did:

    [171] … not think the marks deceptively similar on a visual comparison, as they include a visually different initial letter and, as Vivo is a device mark, are differently represented. Nevertheless, [according to the primary judge] in the context and circumstances of sale, the difference in appearance would not preclude the likelihood of confusion, as … in a substantial proportion of cases, the aural effect and impression of the mark are likely to be of greater significance than the visual effect and impression.

    …

    [80] Her Honour concluded that the significant phonetic similarity was likely to cause confusion. I am satisfied that this similarity is sufficient to give rise to a “real danger of confusion” on the part of customers: see Berlei Hestia at CLR 362; ALR 450.

1. In the present case, of course, discounting the significance of “the absence of visual similarity” between the Opposed Mark and the Opponent’s Mark is one thing.  I am still left to consider the words “NILE sportswear” and “THE NILE” respectively, bearing in mind that these collocations as wholes are not phonetically similar as the elements TIVO and VIVO were found to be.  The parties’ marks do however both prominently feature the identical element NILE and it is by reference to this distinctive element that I think that both parties’ marks are likely to be recalled by potential users of the parties’ services.  In this regard I note that in discussing assessment of deceptive similarity in the context of an infringement matter, the Full Federal Court (Keane CJ, Stone and Jagot JJ) in Food Channel Network Pty Ltd v Television Food Network GP,[11] endorsed the approach of an earlier Full Federal Court (Moore, Sackville and Emmett JJ) in Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd[12] (“Crazy Ron’s”).  As the Court put it at [91]:

   The approach to the comparison to be made between marks that are said to be deceptively similar was summarised by this court in Crazy Ron’sat [73]–[79]:

   [73] First, …

   [75] Second, …

   [76] Third, …

   [77] Fourth … …

   [79] Fifth, the authorities also recognise that the concept of imperfect recollection may be applied to trade marks other than those consisting simply of an invented word (as in Aristoc v Rysta[13] and Berlei v Bali[14]).  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 well infringe the registered trade mark.  The other mark may also infringe if there is a tangible danger of deception or confusion by reason of consumers retaining an imperfect recollection of the words constituting an essential feature of the registered mark.

   [11] (2010) 86 IPR 437.

   [12] (2004) 209 ALR 1; 61 IPR 212.

   [13] Re Rysta Ltd’s Application[1943] 1 All ER 400; (1943) 60 RPC 87 (CA) and Aristoc Ltd v Rysta Ltd [1945] AC 68; [1945] 1 All ER 34; (1944) 1B IPR 467 (HL).

   [14] Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353; 1 ALR 443.

2. Recognition of the significance for comparison purposes of marks sharing an “essential feature” in common has a long pedigree.  As Sir Wilfred Greene MR of the English Court of Appeal put it in Saville Perfumery Ltd v June Perfect Ltd:[15]

   Now the question of resemblance and the likelihood of deception are to be considered by reference not only to the whole mark, but also to its distinguishing or essential features, if any.

   [15] (1939) 1B IPR 440 at 453; (1941) 58 RPC 147 at 162.

3. In similar vein Lord Radcliffe observed in De Cordova v Vick Chemical Co:[16]

   …that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.

   [16] (1951) 68 RPC 103; 1b IPR 496 at RPC 106; IPR 499.

4. More recently, the Full Federal Court (Lindgren, Emmett and Finkelstein JJ) in Starr Partners Pty Ltd v Dev Prem Pty Ltd (“Starr Partners”) further explained:[17]

   [22] The first step in the analysis is to identify the impression produced by the registered mark considered in its entirety. Similarity is not based on only part of the registered mark. On the other hand, when one decides upon the impression produced by that mark it is not improper to give more or less weight to particular features of it, provided the ultimate conclusion is based on a consideration of the mark in its entirety. This approach does no more than recognise that one word or feature of a mark can be more striking and memorable than another.

   ...

   [26] Because the likelihood of deception or confusion must be assessed in the light of the imperfection of human recollection, where a trade mark includes both common and uncommon words, the uncommon words … will be the more memorable, and therefore significant for infringement purposes, than the common words...

   [17] (2007) 71 IPR 459 at [22] and [26].

5. To my mind the element NILE is the essential or distinguishing feature of both the Opposed Mark and the Opponent’s Mark.  It is the “uncommon word” featured in each of the marks.  It has no descriptive or other relevant significance in relation to the parties’ services as far as I am aware and would on the face of it be the most memorable element in each of the marks.  I do not think the addition of the words “footwear” or “THE” to the element NILE significantly affects this assessment, nor as discussed earlier that the visual impression of the Opposed Mark would necessarily be observed or recalled by many consumers as a significant distinguishing factor.

6. Moreover, I think that consumers wishing to refer to, or enquire about, the Holder’s Services orally or in writing or via an Internet search engine would on the face of it need to use the word “nile”, whether or not they also referred to the only other word element in the Opposed Mark, the word “footwear”.  The stylistic aspects of the Opposed Mark as a whole are of little relevance in this context as I see it.

7. In summary, bearing in mind the prominence of the element NILE in both parties’ marks I think that the non-distinctive nature, and/or the relative lack of prominence or significance, of the other elements in the parties’ marks, makes it less likely this would obviate the risk of deception and confusion as between the marks as wholes.  Despite the differences between the parties’ marks I accordingly consider there is a real likelihood that a significant number of potential consumers would wonder, or be left in doubt about, whether the parties’ similar Class 35 services come from the same source.

8. My finding then is that the Opposed Mark is deceptively similar to the Opponent’s Mark. I have already noted that the IRDA covers services similar to those covered by the Opponent’s registration 1277035. The Opponent has accordingly established its s 44 ground of opposition.

Decision

1. Reg 17A.34N(1) of the Trade Marks Regulations 1995 (“the Regulations”) provides:

   (1) Unless the opposition proceedings are discontinued or dismissed, the     Registrar must decide:

   (a)  to refuse protection in respect of all of the goods or services listed in the                  IRDA; or

   (b)  to to extend protection in respect of some or all of the goods or services                   listed in the IRDA (with or without conditions or limitations);

   having regard to the extent (if any) to which the grounds on which the

   IRDA was opposed have been established.

2. I have found that the Opponent has established a ground of opposition under s 44(2) of the Act and, as the Registrar’s delegate, I accordingly refuse to extend protection of the Opposed Mark to Australia in respect of all of the services listed in the IRDA.

Costs

1. In the event that it prevailed, Mr Weston requested an award of costs in the Opponent’s favour. As the successful party, the Opponent is so entitled and I accordingly award costs against the Holder as per Schedule 8 of the Regulations.

Michael Kirov
Hearing Officer
Trade Marks Hearings
29 June 2015