Nettlefold Signs Pty Ltd v Nettlefold Advertising Pty Ltd

[1995] ATMO 56

TRADE MARKS ACT 1955

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

Re:Opposition by Nettlefold Advertising Pty Ltd to the registration of trade mark application number 515704 in the name of Nettlefold Signs Pty Ltd.

Background:
After examination, trade mark application 515704 was accepted for registration in Part B of the register. It was accepted as complying with s 25 of the Trade Marks Act 1955, ie as one which is either distinctive or able to become distinctive. That acceptance was advertised on 27.2.92. The applicant is Nettlefold Signs Pty Ltd, which I will refer to simply as “the applicant” from this point.

In view of matters which arose later after opposition, by Nettlefold Advertising Pty Ltd (“the opponent”), to the registration of this accepted application, it is necessary to look briefly at the examination of the application.

The mark in question is the words NETTLEFOLD SIGNS with a chevron design, as below.

Nettlefold is a surname, of which 98 instances were found on a search on the consolidated Australian electoral rolls used as a searching tool for this purpose.  The name is not a common one.  Such is the significance of the word Nettlefold as a surname that, had only 60 instances been found, the mark would have been acceptable in part B without any evidence of use.  As it was, the mark was allowed to proceed to acceptance on the basis of use and of its potential to become distinctive on the basis of further use in the future.

The evidence of use was submitted by the applicant.  This evidence showed that what was described as “the word mark NETTLEFOLD” had been used continuously by the applicant since its first adoption on 28 August 1987 by Nettlefold Neon Pty Ltd, the former name of the applicant company.  The company name was changed to Nettlefold Signs Pty Ltd on 6 June 1989.  The application was accepted on the basis of the evidence and the opposition, now to be decided, was lodged.

The opposition process followed the course set out in the regulations.  Both sides served evidence to support their positions and the opposition came on for hearing and decision by me, as a delegate of the Registrar of Trade Marks.

At the hearing, the applicant was represented by Claude Anese, patent attorney of GR Cullen and Co.  The opponent was represented by Bruce Caine of counsel, instructed by Minter Ellison, solicitors.

Evidence:  Preliminaries.
What follows in relation to the business of the opponent is said to be supported by the opponent’s evidence in support.  That evidence in support is not strictly in the form required by the regulations, in that not all of it consists of original declarations.  Rather, the opponent has lodged an original declaration by Nathan Nankin.  Mr Nankin declares that the other material relied on by the opponent, and annexed to his declaration, consists of copies of certain affidavits.  The originals of these affidavits are declared to be with the Federal Court in relation to a dispute - perhaps a different dispute - between the two parties to this opposition.  At the hearing, the attorney for the applicant objected strongly to this procedure, saying that the regulations entitled the applicant to be served with copies of the material, the originals of which were to be lodged with the registrar.  He noted that the affidavit material was in many instances self-serving or conjectural, often irrelevant to the questions of law which were for my decision.  With that as a basis, the declaration of Mr Nankin was, he argued, simply a way of bringing in evidence which was at best worthless or at worst inadmissible. 

Mr Anese asked for a ruling on this failure, arguing that, for the reasons looked at in St Trudo Trade Mark, 1995 RPC 370, the registrar should be as strict in evidentiary requirements as a court of law would be. He noted that the UK Patents Office has recently produced a notice advising all parties that it has had to raise its standards of evidence in the light of that case.

My ruling on that question is as follows.

The situation in this country is not the same as in the United Kingdom.  In particular, an “appeal” from a decision of the Registrar of Trade Marks is, in Australia, an appeal in name only.  In Jaferjee v Scarlett [1937] 57 CLR 115, this was described as “well established” and the position has not changed since then. Fresh evidence is the norm, so the spectre of a court and the registrar coming to different conclusion on the same issue and evidence is not, in practice, a problem under our system of administration. Rather, it is an inevitable outcome, from time to time, in a system which allows minimal restrictions on the evidence to be applied in this office, while leaving the parties with an avenue of appeal, not just on the law, but on questions of fact.

The situation in Australia is as per Minister for Immigration v Pochi, 31 ALR 666. The registrar functions as an administrative tribunal, and delegates of the registrar are required to assess matters, on the balance of probabilities, “based on material which tends logically to show the existence or non-existence of facts relevant to the issue to be decided”. That case also gives a historical insight into why the courts have restricted themselves to what judges in general once regarded as the best available testimony. But the salient point is made at page 689, based on earlier English decisions but definitive as law in Australia:

These technical rules of evidence, however, form no part of the rules of natural justice.  The requirement that a person exercising quasi-judicial functions must base his decision on evidence means no more than that it must be based on material which tends logically to show the existence or non-existence of facts relevant to the issue to be determined, or to show the likelihood or unlikelihood of the occurrence of some future event the occurrence of which would be relevant.  It means that he may not spin a coin or consult an astrologer, but he may take into account any material which, as a matter of reason, has some probative value in the sense mentioned above.  If it is capable of having any probative value, the weight to be attached to it is a matter for the person to whom Parliament has entrusted the responsibility of deciding the issue.

It is true that, in St Trudo, Ferris J noted that there are, in England, tribunals which are bound by the strict rules of evidence.  The Trade Marks Office is one of them.  At p 376-377 the judge listed the reasons why, on balance, he found this to be so. 

Not all of those factors apply in Australia.  Firstly, the registrar in the United Kingdom has powers specifically made the equivalent to an Official Referee of the Supreme Court.  Secondly, there is a specific provision in the Supreme Court Rules which allows statutory declarations used before the registrar to be used before the court in the event of an appeal.  Thirdly, the UK Act provides that, if the Registrar does not wish to appear at an appeal, he may submit a statement in writing which must, like an affidavit, be a statement of matters within the Registrar’s first-hand knowledge.  That statement, when made, will be deemed to form part of the evidence in the court for the purposes of the appeal.

None of those factors is the case in Australia, where the Act appears to have established the registrar as what Ferris J called an “informal” tribunal.

I therefore intend to consider the copies of the affidavits on which the opponent relies, and which have been served.  In doing so, I will give them only as much weight as I think they deserve, and in some instances this is very little indeed.

I allow in the copies of affidavits with some hesitation, but the fact is that the original affidavits are readily accessible to the applicant, which has had ample opportunity to reply to them, now, in this forum. 

The fact that I do not have the originals of the affidavits on hand is of concern to me.  Had I suspected that the applicant was unable to verify that the present copies were accurate, I would have rejected the material in its present form, even if it meant re-opening this matter.  It would no doubt have been possible to put it to the parties that the material was able to come in only in the form of a formally sworn statutory declaration.  But what would be the point of such a step now, when the original material is already in contention between the parties?

In practice, a somewhat similar issue has arisen before now, in a case with which Mr Anese is familiar.  In Weller v TGI Friday’s Inc, 29 IPR 61, an unusual situation arose. In that case, TGI sought to oppose registration of Weller’s trade marks. An original of a declaration had been lodged by Weller, albeit in another matter, the cross-opposition by Weller to various trade mark applications made by TGI. A copy had been served on TGI. TGI then sought to rely on that declaration in their role of opposing Weller. Hearing Officer Williams allowed leave to adduce that declaration as further evidence, even though, as a matter of logic, it would be entirely impossible for TGI to ever lodge the original declaration. Weller had already done this, in what was, as it is now, a different matter.

In the present case, I do not think that it matters that I do not have the original affidavit.  It is sufficient if the applicant is satisfied that the original exists.  Any other course would be to allow the regulations to be used to frustrate both expediency and common sense.

If the applicant wished to counter, by evidence of its own, the truth of matters set out in the affidavits, it had only to do so.  If it wished to dispute the accuracy of the copies, it could do that also.  Indeed, had the opponent wished to cross-examine witnesses, it could have approached the registrar to establish some good reason for summonses to be issued. 

Mr Anese argued that the authors of the affidavits are not available for cross-examination.  That argument, however, is not supported by s 119 of the act.  That section says simply that the registrar may, for the purposes of this act, summons witnesses.  Regulation 61 affirms that, despite the execution of declarations, a declarant may be required to give evidence orally.  However, it does not preclude the issue of a summons where appropriate. 

However, perhaps Mr Anese is simply accepting that, for practical purposes, the registrar will not summons witnesses unless there is some good reason to expect their cross-examination to be productive or to resolve conflicts as to facts.  In the present situation, as I have said, there is no conflict and the evidence is available in a form which allows both the registrar and the parties to assess the situation.

Mr Anese asked that, in the event that the copied affidavits be admitted, the weight given to them be reduced, on the one hand, and that, on the other, I specifically identify “the particular statements relied on as establishing fact”.  However, it seems to me that it will be neither practical nor convenient for me to footnote, as it were, each finding of fact with a table of sources, each source weighted to indicate its role in my finding.  Mr Anese is expecting more of this office than is normally delivered by an administrative tribunal, or even a court, in any but the most unusual circumstances.

On another point, I do accept Mr Anese’s arguments.  This is in relation to material which has been neither served nor lodged.  Specifically, the opponent has declined to lodge the confidential exhibits referred to in the declaration of Mr Nankin and/or in the attachments.  Accordingly, I cannot look at or consider them.  The opponent notes that it has offered to serve these exhibits on the applicant’s attorney, on condition that, they be kept confidential.  The opponent has not said from whom the material must be kept confidential.  It is not clear if the material can be passed even to the applicant itself, Mr Anese’s client. 

Such conditional service is not part of the regulations.  A party to an opposition is entitled to expect to see the material that its adversary relies on, and may find it unsatisfactory to agree that the material should, for instance, be restricted to the eyes of the attorneys but not of the party itself.  The Trade Marks Office does not accept that such a party to an opposition should be forced to give such an undertaking, and in this instance the applicant has declined to do so.  The “confidential material” thus forms no part of my decision.  Even had it been lodged, I would have excluded it. 

The opponent has relied, instead, on some “edited” samples of the material.  The edited set has been stripped of any useful information.  It satisfies me that some of the confidential exhibits are of a particular form and extent, but their content is still a mystery, both to me and to the applicant itself, on whom it has not been served.

Evidence: 
I return, on those terms, to the parts of the evidence in support that I am prepared to consider.  That material consists of the declaration of Mr Nankin, with the annexed copies of affidavits by Lionel Bosworth, Keith Forbes, Robert Grimwade, David Nettlefold, Bruce Parr, Allan Scash, Ann Veal, Anthony White, Brian Gapes, Antony Lyall, Ross Hepburn, Pierce Cody and Adam Dalgleish.

The opponent is an advertising company which specialises in promoting, offering for sale and selling advertising space for posters and signs.  This is perhaps somewhat different to the field of electric and illuminated signs, which are used for corporate identification, through signs which identify a particular firm or business.  The latter is “a distinct advertising market”, as Mr Hepburn puts it, though he does not say what it is distinct from. 

Mr Hepburn none the less declares that Claude Neon - a competitor of the opponent - is “the exception to the rule that businesses concentrate on one aspect”, ie the outdoor advertising sites market, the corporate identification market or the manufacture of signs, which Mr Hepburn again describes as “distinct”.  On the other hand, Mr Bosworth sees electrical and neon signs as more of a sub-set of the outdoor advertising industry.  Similarly, while Mr Forbes has listed the main players and briefly specified the fields in which the main players specialise, such as “posters printed and painted” “neon/electric/illuminated signs”, he too sees them as all being part of “the outdoor advertising industry”.

In general, there is a thread running through much of the opponent’s evidence:  the main players, on the whole, either lease sites or make electrical signs.  With one notable exception, it appears that the main players in the outdoor advertising industry do not do both.  But the opponent none the less presents itself, now at least, as being a “one stop shop production”.  It is not entirely clear from the opponent’s brochure “Be Seen” that the opponent undertakes the printing process for posters.  But it is very clear that they do provide clients with flexible vinyl signs on vinyl skins, as they are called, which can be illustrated by “our expert signwriters”.  The opponent’s brochure asserts that its production staff have many years experience of creative innovations.  Clients are invited to “call us about” neon signs or borders.

The opponent marks each of its advertising sites with the name Nettlefold.  Such sites now account, by the opponent’s estimate, to 12% of the Australian market for outdoor advertising space in terms of billboards and poster space.  It is the opponent’s claim that because of their reputation, use, by the applicant, of the trade mark the subject of the present application would have led, at the relevant date, to deception or confusion in the relevant area of commerce.

On the whole, most of the opponent’s evidence fails to address the relevant date, the date of application.  Various declarants write in the present tense.  Exhibits are undatable or, prima facie, suggest dates which appear to be later than the date of application.  While there is an abundance of self-serving assertion, the facts to underpin my decisions on questions of law are nearly always missing. 

There is a paucity of information that can be ascribed to a particular date, or even year, but it is fairly clear that the opponent had 1,000 sites in Victoria, Queensland, New South Wales and South Australia in 1985-86.  It presently has about 3,000 sites.  One of the exhibits to the Hepburn affidavit notes that “David Nettlefold is regarded as the maverick of the outside advertising industry, having built his company from nothing in just five years”.  This comment is from a source the name of which I cannot read, dated some time in 1989.  If the comment is true, the opponent was “nothing” in 1984.

As to advertising expenditure, the critical figures are again missing - they were not served.  It is said that the total for the period 1989 -1993 (inclusive) is $300,000, but the opponent has deliberately cast its figures as a total.  It would be wrong in principle to ascribe any large value to the period prior up to 27 July 1989, the date on which the application was lodged.

Some aspects of the affidavits are relevant, however.  Adam Dalgleish convinces me that there have, subsequent to the date of the opposed application, been instances of confusion among clients.  Cheques and invoices have been mistakenly sent to the applicant, though intended for the opponent.  There have been confusions about the payment of bills.  Robert Grimwade was confused by a job advertisement place by the applicant in late 1991, and so forth.  A property manager has written to “Nettlefold Signs” about rental of a sign which is apparently one of the opponent’s.  Even the applicant’s patent attorney has, on one instance, written to the applicant using the street address of the opponent.  Various officers of the opponent have kept records of these events.  David Nettlefold instructed his staff to document such confusions and it is clear that they were common enough in 1991.

There is a second thread running through the opponent’s evidence.  It is that David Nettlefold had, by the time the evidence was prepared, been well known in the advertising industry for some time.  The opponent may be confident in making that assertion for the purposes of its Federal Court proceedings against the company which is presently the applicant.  In the Federal Court, those matters will be assessed in the light of confidential evidence which the opponent cannot rely on in the Trade Marks Office.  It should, to that extent, be less confident of its position in the present proceedings, which relate, moreover, to the position at the date of application.

Given that the opponent was, at the relevant date, operating at least 1000 sites throughout Australia, and given that the advertising industry is a specialised area, I believe that the opponent has demonstrated a fledgling level of reputation at the relevant date.  It may be that one thousand sites is a significant thing in the outdoor advertising industry, or it may be that it is next to the “nothing” from which the opponent’s business arose in 1984.  I cannot quantify the reputation in view of the fact that the opponent has framed its evidence in a way which forces me to exclude the confidential material, and in view of the failure of substantially all of the declarants to address the relevant date, the date of application.  In short, I cannot quantify the very thing on which the opponent’s chance of success depends.

Now the surname Nettlefold is far from common.  The coincidence of two Nettlefold trade marks in areas with such an arguable nexus would be remarkable.  It is not, in fact, coincidence.

The applicant’s evidence in answer to the opposition is a declaration by Alan Palmer, Group Managing Director of the applicant.  Annexed to his declaration is, inter alia, the declaration that was put before the examiner of trade marks.  Mr Cain was very critical of this evidence, arguing in much the same lines as Mr Anese, that the evidence was often short on specific dates and failed to distinguish between the trade marks NETTLEFOLD NEON and NETTLEFOLD SIGNS.

Mr Palmer was a director of the opponent between 1983 and 1988 and of the applicant from 1986.  Since 1982, he has been a director of Corporation Australia Pty Ltd (“Corporation”), which acquired the applicant in December 1988.  He declares to the relationship between the applicant and the opponent.

After June 1983, Mr Palmer has declared that Corporation owned 50% of Nettlefold Outdoor Advertising Unit Trust.  That business had previously been owned by David Nettlefold (Holdings) Pty Ltd, which changed its name to Nettlefold Advertising Pty Ltd in July 1986.  In that year, the opponent acquired a 75% interest in the applicant.  In February 1987, the opponent acquired 100% of the applicant. 

In December 1988, Hoyts Entertainment Ltd purchased 100% of the opponent, while Corporation purchased the applicant.  The applicant changed its name and its trade mark.  The disputed application was filed in July 1989.

The applicant has had a substantial business since at least 1990.  In that year it sold more than two million dollars of goods.  While Mr Caine was critical of this claim, noting that the sales have fallen in recent years to some 1.2 million dollars, the values still, in my opinion, speak for themselves. 

The reason given for the change from Nettlefold Neon Pty Ltd to Nettlefold Signs Pty Ltd is that, per Mr Palmer, “the former name was misleading as my company was involved in the manufacture of a wide range of signage products not limited exclusively to neon signs”. 

It is in fact this change of name that most disturbs the opponent.  Mr Nettlefold makes it clear that he was satisfied that NETTLEFOLD NEON and NETTLEFOLD ADVERTISING could coexist.  This is consistent with Mr Palmer’s declared assertion that the opponent leases sites while the applicant makes signs.  This is, Mr Palmer argues, a “clear demarcation”.

Mr Palmer declares that, when Corporation bought the applicant, the sales agreement included no limitation with regard to the applicant’s use of the word Nettlefold.  That does appear to be so.  However, Corporation was obliged to restrict anyone to whom they themselves sold the business from using the name “Nettlefold Neon”.  This restriction applied for two years after Corporation bought the business, and could be waived only on conditions which included the consent of David Nettlefold, or of another named person in the event of David Nettlefold’s death.  Aside from this, there is no specific mention of trade mark rights in the agreement.

The applicant commenced to use the word NETTLEFOLD at a time when it was entirely owned by the applicant.  There is evidence that the opponent later, after the sale of the applicant company to Corporation, transferred the business name NETTLEFOLD NEON to the applicant in both Victoria and South Australia.  Those transfers were signed by David Nettlefold in September 1989.  Mr Nettlefold is declared to have been at that time, two months after lodgement of the disputed application, Managing Director of the opponent.

Arguments on the substantive issue
At the heart of the opponent’s concerns is section 28 of the Trade Marks Act 1955, which deals with, inter alia, the registration of trade marks which, on evidence, would be likely to deceive or cause confusion.  Both representatives accept that this question is to be decided at the date of the application.  This is made clear by cases such as Southern Cross Refrigerating Co. v Toowoomba Foundry Pty Ltd [1954] 91 CLR 592.

Intertwined with this is an argument that, because of this misdescription, the mark is not capable of becoming distinctive of the applicant to the exclusion of others; in particular, to the exclusion of the opponent.

Mr Anese put to me a simple case: that the opponent had not established a significant reputation, or any likelihood of deception or confusion, as at the relevant date. That, moreover, even if it had, the operation of section 28 is constrained in the way set out in the Journal of 12.9.91.  In short, he said that the applicant legitimately adopted the trade mark, legitimately changed it, and was at all times acting honestly in accord with the rights it had to use the trade mark NETTLEFOLD.  Such potential as there was for confusion came only from the use of that surname, with the variation from NETTLEFOLD NEON to NETTLEFOLD SIGNS being a mere change in a descriptive word.

Mr Caine argued the contrary.  He argued, in particular, that the practice set out in the Journal is wrong.  As a contingency, he also argued that the applicant’s conduct in continuing to use and, indeed, expand its use of the trade mark in its amended form, NETTLEFOLD SIGNS, was very clearly the sort of conduct that would be caught by the registrar’s practice.

To this, Mr Anese argued that the applicant was owned by the opponent at the time the mark NETTLEFOLD NEON was adopted.  The company was subsequently sold to a new owner who was entitled to fully use the assets it had bought.  The opponent, on the other hand, actually consented to the continued use of the identifier NETTLEFOLD, at least in the mark NETTLEFOLD NEON.

Mr Anese argued that any deception or confusion which might arise is as a result of the element NETTLEFOLD.  He noted that David Nettlefold is now not in the outdoor advertising field in Australia, and that if there was any deception or confusion, which he denied strenuously, it was as much between the opponent and Mr Nettlefold as anyone else.  The applicant, on the other hand, was in a separate field, the actual making of signs.  Mr Anese argued that there was evidence available that a sufficient demarcation existed between what the applicant does and the opponent’s activities, and that this would reduce, for practical purposes, the possibility of deception to acceptable levels.

A second string to the opponent’s bow is the line that, because of the background facts now revealed in this forum, the trade mark is not distinctive of the applicant. To this Mr Anese noted, quite correctly, that the test is somewhat lower. It is the test of s 25 of the 1955 act, which looks at future ability to become distinctive and at present inherent adaptation to distinguish the applicant’s goods from those of others.

Decision
It is common ground that, in the first instance, the opposition can succeed only if s 28(a) of the Trade Marks Act 1955 is triggered.

As a preliminary, I have already said that the opponent had, in my opinion, a fledgling reputation at the relevant date.  More I cannot say.  There is no real reason for me to find that there would have been a significant number of people who were deceived or confused by the applicant’s use of the trade mark NETTLEFOLD SIGNS.  Had the opponent presented evidence of a quantifiable reputation at the relevant date, it would perhaps have succeeded in this opposition, but it did not.  When I attempt to extrapolate back from the opponent’s evidence, self-serving as it is, cast in the present tense as it is, with parts of it excluded as they must be, nothing emerges but shadows of possibilities.  The opponent has neglected the evidentiary onus.  Thus, while the applicant has always to show that it is entitled to registration, in this instance there is no reason to doubt that it has done so.

As to Mr Caine’s argument on the registrar’s s 28 practice, as set out in the Journal of 12.9.91, I think little needs to be said. His criticisms were thorough, but I am still convinced that section 28 of the act is either conjunctive, per RIV-OLAND, (Riv-Oland Marble Co (Vic) Pty Ltd v Settef SpA, 12 IPR 321), or limited in the way found by what is, despite Mr Caine’s argument, still arguably a majority of the High Court in MOO/MOOVE (NSW Dairy Corp v Murray Goulburn Cooperative 18 IPR 385).  I can sympathise with Mr Caine’s argument that this should not tie the registrar’s hands prior to registration, but I will not overturn the practice which has been built up since the date of the Journal in question.  Unless that practice is expressly criticised in the Federal Court, which has so far declined to pass any view on it, it will have to stand.

The applicant having failed to demonstrate any assessable and conflicting reputation at the relevant date, I am not called on to deal with the opponent’s arguments in relation to s 25.

I do not agree with Mr Caine’s implicit criticism of the decision of a delegate of the registrar in accepting the application in the first place.  Prima facie, the decision to accept this application was correct.  It did not matter, at that stage, that the mark actually in use might have been NETTLEFOLD NEON rather than NETTLEFOLD SIGNS.  Prima facie, Nettlefold is Nettlefold.  Nothing turned on that aspect at all.  It is only now, when the opposition process has allowed an alternative assessment of the same facts, that there is any possibility of taking another view of the applicant’s case.  None the less, because of the way the opponent has framed its case, I think registration is the proper course.

I therefore dismiss the opposition to the registration of application 515704.  In the absence of any appeal, I direct that the application be registered.  I award costs in accord with the scale to the applicant.

V. Zars
Hearing Officer.
22 December 1995