NationsBank Corporation, Re

[1998] ATMO 49

TRADE MARKS ACT 1995

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

Re:      Application number 707146 in the name of NationsBank Corporation to register the trade mark WORLD CARD

Trade mark application 707146 seeks registration of the words world card.  The application was made on 24 April 1996 as a divisional application, claiming the filing date of initial application 583205, which was lodged on 28 July 1992.  The applicant is the NationsBank Corporation, an entity organised and existing under the laws of the State of North Carolina, United States of America, and located in Charlotte, North Carolina.  The NationsBank Corporation (which I shall now refer to as NationsBank) applied to register this trade mark for services it described as:

Banking services in [class 36] relating to banking credit and debit services and accounts provided in connection with a credit card.

The application came to be examined, and the examiner of trade marks objected that the words world card are descriptive. When used in relation to the services nominated in the application, world card, he said, describes them as credit card services which are accessible throughout the world. The examiner found that the words world card are words which other traders are likely to use to describe their world wide credit services. Accordingly, he objected that there were grounds for rejecting this trade mark under the terms of section 41 of the Trade Marks Act 1995.

On the applicant’s request, the trade mark application came to a hearing in Canberra, on 20 September 1998.  The hearing was before me.  NationsBank was represented by Mr David Hughes of the Melbourne attorney firm of Phillips Ormonde & Fitzpatrick.

The law

Section 41 of the Trade Marks Act 1995 deals with trade marks in terms of whether or not they are capable of distinguishing an applicant’s goods or services. So far as it is relevant to this matter, it reads as follows:

41(1) …

(2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

(3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

(4) Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a) the Registrar is to consider whether, because of the combined effect of the following:

(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

(ii) the use, or intended use, of the trade mark by the applicant;

(iii) any other circumstances;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services--the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and

(c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services--the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons.

(6) If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant--the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b) in any other case--the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

This section of the new Act has been judicially considered by Justice Branson in the oregon case Blount Inc v The Registrar of Trade Marks (1998) 40 IPR 498. 

Her Honour observes that, in applying the provisions of section 41, and in deciding whether a trade mark is capable of distinguishing, the Registrar has three options. He or she may conclude:

(a)that the trade mark is inherently adapted to distinguish the designated goods  or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or

(b)that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or

(c)that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of distinguishing the designated goods or services.

Justice Branson says:

The structure of s 41 of the Act dictates that if the Registrar reaches conclusion (a) above, then he or she will decide the question whether or not the trade mark is capable of distinguishing the designated … services from the … services of other persons by reaching the answer that it is so capable by reason of its inherent adaptability to distinguish (s 41(2) and (3)). The Registrar will, in such circumstances, be required, by reason of the terms of s 33(1) of the Act, to accept the application …

If the Registrar reaches conclusion (b) or (c) above, he or she is, within the meaning of s 41(4) "unable to decide the question". That is, he or she is unable, simply by taking into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services, to answer the question whether or not the trade mark is capable of distinguishing the designated … services from the … services of other persons.

If the Registrar reaches conclusion (b) above, then the provisions of paragraphs (a) and (b) of s 41(6) are brought into operation. … If the applicant fails to establish that because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated [services] as being those of the applicant, the Registrar must reject the application pursuant to s 41(2).

If the Registrar reaches conclusion (c) above, then the provisions of paragraphs (a), (b) and (c) of s 41(5) are brought into operation. If the Registrar … is satisfied that the trade mark does or will distinguish the designated … services as being those of the applicant, he or she will not reject the application pursuant to s 41(2). … If the Registrar … is not satisfied that the trade mark does or will distinguish the designated … services as being those of the applicant, the Registrar must reject the application (s 41(2)).

In determining the issues of section 41, Justice Branson directs that the first step is:

to take into account the extent to which the trade mark is inherently adapted to distinguish the designated … services from the … services of other persons.

Her Honour then addresses the question of inherent adaptation and comments both in terms of the repealed Trade Marks Act 1955 and the current law. Justice Branson says:

The notion of a trade mark being inherently adapted to distinguish the designated goods was of primary significance under the 1955 Act. There is no reason to think that the phrase "inherently adapted to distinguish the designated goods from the goods of other persons" appearing in s 41(3) of the Act is not intended to be understood in the light of decisions under the 1955 Act, and comparable United Kingdom legislation which includes references to inherent adaptability.

The test for capacity to distinguish

The starting point for assessing the trade mark world card in terms of section 41 is then for the Registrar to decide:

·   whether the term world card is inherently adapted to distinguish banking services - namely credit and debit accounts with credit card facilities -  from those same services offered by competing banks;  or

·   whether world card is a trade mark which is not to any extent inherently adapted to distinguish these services; or

·   whether world card is to some extent inherently adapted to distinguish these banking services from the services offered by other banks, but on that basis alone is not actually capable of distinguishing these services.

These tests hinge on the question of whether the term world card is capable of distinguishing NationsBank’s banking services - in particular, its credit and debit accounts and its credit card facilities - from the same banking services offered by NationsBank’s competitors. As per sub-paragraph 41(5)(a)(i) of the Act, capacity to distinguish is to be gauged by assessing the extent to which the trade mark is inherently adapted to distinguish.  The meaning of this term is explained in Clark Equipment Company v Registrar of Trade Marks, the MICHIGAN case, 111 CLR 511. As per Justice Branson’s judgment, this precedent continues as good precedent under the Trade Marks Act 1995.  Adapting Justice Kitto’s words to services, his Honour’s direction is (p 514):

... the question of whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons trading in services 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 services in any manner which would infringe a registered trade mark granted in respect of it.

The essential question here, therefore, is whether the term world card is a term which other financial organisations, actuated only by proper motives, are likely to wish to apply to their own bank account and credit card services, for the sake of the descriptive signification ordinarily conveyed by the words world card.

The submission that world card is registrable 

Mr Hughes’ submissions are on a number of levels but broadly fall under three headings. First is what Mr Hughes refers to as the well-recognised legislative intent of the Trade Marks Act 1995 to be “less demanding”; second are his arguments that the trade mark world card is adapted to distinguish; and the third derives from a contention that the Registrar has not examined this trade mark application in accordance with procedures laid down in the Trade Marks Office Draft Manual of Practice and Procedure.

First, Mr Hughes submits that the test for registration established under the Trade Marks Act 1995 is a lesser test than the tests that operated under the Trade Marks Act 1955.  In support, he draws my attention to the general opening comments in Justice Branson’s considerations.  She says:

The concept of a trade mark is well known.  Section 17 of the Act defines a trade mark as follows;

A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person

Crucial to the concept of a trade mark is its capacity to distinguish the goods or services of one person from the goods or services of another.  Under the Act, it is sufficient in this regard for the trade mark to be “capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered” (s41(2))

Her Honour then goes on to observe that:

Under the 1955 Act it was established that certain marks could never be regarded as entitled to registration even thought they were, as a matter of fact, plainly distinctive of the applicant’s goods.  

… Parliament, by enacting the current Act, intended to effect a change in the trade mark law concerning distinctiveness. 

Justice Branson then quotes a passage from the recommendations that the Bill was to implement. This passage makes it clear that, under the new legislation, there was to be some provision, for registering a trade mark which had no inherent distinctive quality.  

This, then, is the “lesser test” that Justice Branson is referring to - the fact that if it meets those provisions, then under the Trade Marks Act 1995 a trade mark may proceed to registration regardless of the fact that it has no inherent capacity to distinguish. In terms of the world card trade mark, this means that if I find that it has no inherent capacity to distinguish, the trade mark may still succeed on the basis of established factual distinctiveness. The terms of section 41, further, however, allow a mark to proceed which is not yet distinctive, but which is judged on its prima facie merits, to be capable of distinguishing. This too may be regarded as a “lesser test” than the test for section 24 of the Trade Marks Act 1955 where the requirement was that the trade mark be shown to be distinctive before achieving a Part A registration.

So far I am in broad agreement with Mr Hughes but he goes further in suggesting that the “lesser test” is reflected in the explanatory note which accompanies subsection 41(6).  This reads

Note 1:Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a)the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

(b)the time of production of goods or of the rendering of services.

Mr Hughes suggests that this note implies that the inherent ability of a trade mark to distinguish is to be assessed against what is “ordinarily used” to indicate the various characteristics listed in paragraphs (a) and (b) to Note 1.  The expresssion “ordinarily used” he equates with that which is in common usage, particularly in Australia.  I cannot agree with this interpretation which suggests that for a trade mark to have no inherent adaptation to distinguish, it must be in common use.  In my view a sign which is “ordinarily used” is one, which in the words of Justice Kitto quoted above, is used “for the sake of the signification which [it] ordinarily possess[es]”.  This is the criterion against which the trade mark world card is to be assessed.

Second, Mr Hughes argues a number of points in respect of the meaning of the term world card.  These I will address point by point.  At the outset, however, it will be useful to quote the essence of the objection as it was put by the examiner, Mr Payasena Pattiarachchige.  In his first report, Mr Pattiarachchige says:  

Your trade mark is not capable of distinguishing your services from the services of other traders because world card  is descriptive of some of the services as being credit card services accessible throughout the world.

In his second report, he says:

The trade mark is intended to cover the banking services in relation to “banking credit and debit services and accounts provided in connection with a credit card”. Although the words credit card or credit services do not appear in the trade mark the section 41 reason for rejection is nevertheless valid as the words world card used in relation to these services quite strongly suggest that the world card is something which gives the user global access to the services claimed and therefore is descriptive of the services claimed.

Applying the michigan tests, it seems to me that Mr Pattiarachchige is quite right.  In today’s business world, access to trade on an international basis has become commonplace. The promotion of goods and services pours across the Internet to all manner of domestic and commercial sites and people from all walks of life are seeking safe and reliable ways to take up these offers and transfer money from one country to another. Travellers too are taking advantage of the revolutionary changes in communications, and are expecting to access their home bank accounts from abroad.  These services are now commonly provided by many Australian banks through use of personally identified electronic card systems.  Against this background, it seems to me to be very likely indeed that a bank wishing to indicate that its customers have access to funds or to credit facilities from sites across the world would refer to that service as a world service and to the card-operated access to that service as its world card service.  

Mr Hughes, I think, acknowledges that the term world card has some reference of this kind, but he argues that words do not have to be devoid of meaning in order to be adapted to distinguish.  He refers me to my decision on the trade mark firkin (Carlton & United Breweries vs Allied Domencq Retailing Ltd AIPC ¶ 91-382).  It is true that I judged this word adapted to distinguish despite the fact that it had a dictionary meaning relevant to the specified goods. In that case, however, I was satisfied that firkin was archaic, not in current use and was not likely to be used by competing traders. I have no reason to hold that view in respect of the term world card.

In a supplement to this argument, Mr Hughes puts it to me that the word world is an ‘abstract noun’. This may be so if the meaning of world is taken to be universal.  But it does not follow that world cannot be descriptive. One might well claim that credit is an abstract noun. However, the question is not whether the word world  (or credit) is an abstract noun, but whether world card (or, in like vein, credit card) is a term that other traders would wish to use.

Further on this theme, Mr Hughes claims that world card is a newly coined term which conveys nothing more than a fanciful meaning.  Then he reminds me that obviousness of meaning must not be confused with obviousness of derivation - Hallgarten’s Application (1948) 66 RPC 105 at 108 - the whisqueur Case. The words world card, however, are both ordinary and well used words which are understood by all English speakers.  There is no need for me to turn to dictionary definitions.  The meaning of these words is simply a matter of common knowledge and plain common sense.  When these words are used in respect of banking services, particularly credit card services I am quite satisfied that an ordinary member of the public will understand that these services are proffered as services which operate on an international basis, and are available throughout the world.  This may be a new descriptive term for a relatively new service, but it is not ‘newly coined’.  It is a nothing more than conventional usage of common words to describe that newly evolving service. world card has none of the unconventional structure of whisqueur. I reject Mr Hughes submission that the term world card has no clear or relevant meaning and his submission that it is a newly coined term. 

Finally, Mr Hughes drew my attention to a section in the Trade Marks Office Draft Manual of Practice and Procedure which cautions the examiner that where there is an objection that grounds for rejection exist under the provisions of section 41 of the Act, the grounds should be well documented. No documentary evidence was provided in support of the objection to world card. Mr Hughes argues that the objection then was not properly taken.

The Trade Marks Office Draft Manual of Practice and Procedure, however, is not the law.  It is a manual of procedure.  In the recent decision in Companhia Souza Cruz Industria E Comercio v Rothmans of Pall Mall (Australia) Ltd  [1998] 689 FCA (17 June 1998), Justice Wilcox points out that the Registrar may not institute procedural rules and treat them as if they are law. 

The instruction to examiners to document their objections to the best of their ability, is little more than practice - and draft practice at that.  It is good practice, and if documentary support for an examiner’s objection is necessary and available, then it should be provided to the applicant.  Trade marks, however, consist of new words and terms, devices, shapes, sounds and smells and to assess these marks and signs, examiners may have to rely on their general knowledge, their powers of deduction and detection, and their understanding of current market developments.  In such instances, documented material may not be available to support the objection.

However, the relevant law, section 41 of the Act, does not require documented evidence as a necessary preliminary to a ground of rejection. It requires the examiner to come to a conclusion on whether, on balance, he or she is satisfied that, subject to the extent to which the mark is found to be inherently adapted to distinguish, that mark is capable of distinguishing.

If documentary material is discovered which will assist the applicant to understand the nature and force of the objection, examiners should include that material in their reports.  The fact that in some instances there is no documentary evidence, however, does not render an objection invalid.

Decision

I turn now to my decision. 

Contrary to a word like firkin which is not at all ordinary, but is archaic, rare, and going further out of style, I find that the term world card is an ordinary English term which, when applied to the specified services, will be widely understood by ordinary people and which is likely to be increasingly relevant in describing personally identified card systems which can be accessed across the globe. At the end of the twentieth century international banking services are merely a part of burgeoning electronic commerce and in the context of this phenomenon, new technology and new services are daily giving rise to new terminology.  The fact that an ordinary term such as world card has no history of use in relation to that service, is therefore not sufficient ground to conclude that the term is capable of distinguishing.  The critical question is whether competitors providing a similar service will be likely to think of the words world card and use them to describe that service.  I think it is likely that they will.  I find that world card is a descriptive term which other banking businesses, offering similar services, and actuated only by proper motives, are likely to want to use and, moreover, will have a growing need to use, as a description of their own global credit and banking services.  I am therefore satisfied that the words world card are not to any extent adapted to distinguish.

This conclusion brings the provisions of subsection 41(6) into operation.  The applicant has produced no evidence to show that, because of use of world card prior to filing the initial application, the trade mark at that time did distinguish the NationsBank’s services.   In accordance with the provisions of subsection 41(2), I therefore reject this application to register this trade mark.

Helen R. Hardie
Deputy Registrar

30 October 1998