Next Retail Limited v Gordon Simpson Agencies Pty Ltd

[2011] ATMO 128

TRADE MARKS ACT 1995  

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

Re:      Opposition by Next Retail Limited to registration of trade mark application 1317873 (18) -neXt - filed in the name of Gordon Simpson Agencies Pty Ltd.

DELEGATE:         Bianca Irgang

REPRESENTATION:           Opponent: Ms Siobhán Ryan of Counsel instructed by Griffith Hack Applicant: Not present at the hearing

DECISION: 2011 ATMO 128 Section 52 opposition: sections 44 and 60 pressed – s 60 ground of opposition established for all goods – trade marks are substantially identical and use of the applicant’s trade mark likely to deceive or cause confusion due to opponent’s overwhelming reputation in the UK – opponent’s evidence is sufficient to demonstrate ‘spill-over’ reputation – ‘spill-over’ reputation sufficient to establish the section 60 ground of opposition -  no requirement to consider other grounds.

Background

1.        Gordon Simpson Agencies Pty Ltd (‘the applicant’) filed application number 1317873 on 28 August 2009 in class 18 of the International Classification of Goods and Services. Details of the application are set out below.

Trade mark:      neXt

Trade mark application:         1317873

Filing Date:     28 August 2009

Specification: Class 18: Leather purses; leather wallets; pocket wallets; wallet holders incorporating shoulder straps; wallets for attachment to belts; handbags; handbags made of imitations leather; handbags made of leather; ladies handbags; travelling handbags; casual bags

2. Next Retail Limited (‘the opponent’) filed a Notice of Opposition (‘the Notice’) to the registration of the application on 7 April 2010. Thereafter the parties served and filed

evidence as allowed by the provisions of the Trade Mark Regulations 1995 (‘the Regulations’).

3.        I heard the matter in Melbourne as a delegate of the Registrar of Trade Marks on 2 May 2011. Ms Siobhan Ryan of Counsel instructed by Griffith Hack represented the opponent. The applicant did not attend the hearing or provide written submissions. 

Grounds of Opposition

1           The Notice nominated most of the grounds of opposition available under the Act.  The onus is upon the opponent to establish one or more of its grounds of opposition. Gyles J has referred to the standard of proof required in terms of a ‘balance of probabilities’.¹ His findings upon that issue, arrived at after a consideration of the relevant authorities, have been discussed with approval by Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks².

2           At the hearing the opponent advised that it was not formally withdrawing any of the grounds of opposition listed in the Notice but that it would provide submissions only on those grounds under sections 44 and 60 of the Act. None of the evidence served and filed by the opponent appears to go to the other grounds in the Notice and for the sake of completeness I find that these grounds have not been established.

3           Therefore, the grounds remaining for my consideration are those under sections 44 and 60 of the Act. Should the opponent establish one ground of opposition in relation to all of the applicant’s goods and services specification, there is no requirement for any of the other grounds of opposition to be considered. 

Evidence

7.        The evidence provided for this matter consists only of the following declaration:

¹ Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599 ² [2009] FCA 891, para 22-27

Opponent’s Evidence

8.        In her statutory declaration Ms Noble states that the opponent first adopted and used the trade mark NEXT in 1982 in the United Kingdom in relation to a wide range of clothing products which are sold through NEXT branded retail outlets which are owned or controlled by the opponent. Since then the opponent has continuously operated a chain of high street stores in the UK. In 1985 the opponent expanded its range of goods to include home wares and home furnishings. Ms Noble states that the opponent used its NEXT and NEXT HOME trade marks on these goods. 

9.        In 1988 the opponent launched a mail order catalogue service which recorded its millionth active customer in 2000. In 1999 the opponent launched its online shopping website: The mail order catalogue and the website sell a wide variety of goods under the opponent’s NEXT trade mark which include clothing, fashion accessories, home wares, furniture, lighting and kitchenware. Regardless of all the different trade channels employed by the opponent, there is no evidence that the opponent has ever sold any of its NEXT branded goods within Australia. The opponent also makes no claims of ever having directly sold its NEXT branded goods within Australia. 

10. Exhibit SLN-5 contains statistics for international travel from the Australian Bureau of Statistics website which show that between 1992 and 2002 the UK was the third largest source for short-term visitor arrivals in Australia. Exhibit SLN-6 contains similar statistics from British Tourism & Trade which were compiled by the Office for National Statistics. Both of these exhibits have been put forward by the opponent in order to support its claims of a ‘spill over’ reputation into Australia. These exhibits demonstrate a very impressive level of travel between Australia and the UK for the years before the priority date of the opposed application. 

11. The opponent operates around 500 NEXT stores with a store in almost every town and city in the UK. The opponent also sells its NEXT branded goods through NEXT branded stores in Denmark, Iceland, Bahrain, Czech Republic, Cyprus, Malta, UAE Oman, Qatar, Saudi Arabia, Lebanon, Kuwait, Jersey, Guernsey, Indonesia, India, Turkey, Russia, Ukraine, Slovakia, Hungary, Pakistan and Japan (Exhibit SLN-3).  

12. The evidence shows that the opponent is a large company and has been one of the Top 100 companies on the London Stock Exchange for a number of years. The overall turnover figures for the opponent from the years 1999 until 2008 are very significant as are the substantial amounts spent on advertising and publicising its NEXT branded products. Exhibit SLN-7 demonstrates that the opponent has advertised its goods in a large number of publications.

13. In order to protect its reputation the opponent has also sought and obtained a number of overseas registrations for its NEXT trade mark. Copies of these trade mark registration certificates are located in exhibit SLN-9. The opponent has also purchased a number of pre-existing Australian trade mark registrations for the word NEXT, being numbers 386146, 486850, 577376 and 783870. The opponent also owns Australian trade mark registration number 641888 for the words NEXT KIDS. These trade marks all have earlier priority dates than that of the opposed application and cover clothing goods in class 25 and retail services relating to clothing in class 35. However, none of these registrations were listed in the Notice, nor referred to in the opponent’s evidence. The first mention of them was made at the hearing where the applicant was not present.

Discussion

Section 60 - Reputation in Australia

14. Section 60 of the Act provides: 

60 Trade mark similar to trade mark that has acquired a reputation in Australia

The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a) another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

(b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

15. To establish the ground of opposition under section 60, the opponent must demonstrate:

¾ That, at the priority date of the opposed application, another trade mark had acquired a reputation in Australia; and

¾ That because of the reputation of the other trade mark, use of the applicant’s

trade mark would be likely to deceive or cause confusion.

16. Unlike sections 44 or 58 of the Act, section 60 does not require that the goods upon

which the opponent uses its trade mark be of a specified standard of similarity with

the goods and services of interest to the applicant, nor is there a requirement that the

trade marks be substantially identical or deceptively similar. However, I say now that

a comparison of the opponent’s NEXT trade mark with the applicant’s NEXT trade

mark reveals that the marks are substantially identical. They are both the single word

NEXT.

17. It is now for me to determine if the opponent has acquired a reputation in Australia for

its NEXT trade mark which is sufficient to establish that use of the opposed trade

mark would be likely to deceive or cause confusion. 

18. The principles relevant to the assessment of the likelihood of confusion, etc, are set

out by French J in Registrar of Trade Marks v Woolworths ³:

In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1953] HCA 73; (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. 

³ [1999] FCA 1020 at paragraph 50

(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 Inc⁴:

“...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.” 

19. Reputation is to be assessed according to the test set out in McCormick & Company

Inc v McCormick⁵ by Kenny J 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?

⁴ [1973] HCA 43; (1973) 129 CLR 353 at 362 ⁵ [2000] FCA 1335

20. Considering the evidence, there is little doubt that the opponent enjoys a very

extensive reputation for its NEXT branded goods and services in the UK and

internationally. However, the onus is on the opponent to demonstrate that a reputation

in its NEXT trade mark existed in Australia before the priority date of the opposed

trade mark such that use of the opposed mark would be likely to deceive or cause

confusion. This is more than merely indicating prior use, the opponent’s trade mark

needs to be “associated in the minds of the Australian public”⁶.

21. The opponent concedes that it has not sold any of its NEXT branded goods or services

in Australia. However, Ms Ryan pointed to the ‘spillover’ of the opponent’s

international reputation into Australia as a result of visitors from the UK and other

countries in which the opponent uses its trade mark and foreigners likewise bringing

their knowledge of the opponent’s mark to Australia. She referred to the decision of

Hearing Officer Nancarrow in Ferdinando Giordana SpA v Walton International

Ltd⁷where it is stated: 

From the evidence provided, I have little doubt that the opponent enjoys a sizeable reputation in many Asian and Middle Eastern countries. The question to be answered, however, is how much of this reputation has been transferred into Australia by means of the spillover effect from international tourism. Neither of the cases relied on by the opponent in relation to a spillover of reputation concerned an opposition to registration. Anheuser-Busch (supra) was an expungement action and ConAgra (supra) was an action involving both passing off and ss.52 and 53 of the Trade Practices Act 1974. I accept, however, that the tests discussed in those cases are relevant.

Despite the figures provided for tourism between Hong Kong and Australia, no indication is available to explain how much, if any, exposure the tourists had to the opponent's mark, save the Biddle declaration regarding her own experience. It is theoretically possible that the opponent's stores were situated in readily accessible areas and that virtually all tourists were exposed to the mark or, alternatively, that the stores were situated in areas that tourists would rarely frequent. The spillover effect of reputation for the opponent, by means of international tourism, is extremely difficult to quantify. This line of reasoning is supported in ConAgra (supra) at 239 in the words of Lockhart J: 

Evidence of this kind has considerable difficulty, it seems to me, as proof of reputation. It is not possible to assess how many travellers on short visits to the United States would have watched television either at all or at the times of the appellant's advertising, or would have visited the shops or supermarkets.

⁶ Seven Up Co v OT Ltd (1947) 75 CLR 203 at 211 ⁷ (1999) 48 IPR 423

22. Hearing Officer Nancarrow observed in this case that there was a ‘greater awareness of the significance of international trade marks’ and I agree with the opponent that consumers are now far more aware of international trade marks then they have been in the past. I also agree that the opponent’s evidence does not suffer from the uncertainties of the evidence in the Giordano case. The opponent’s evidence does demonstrate that its reputation in its NEXT branded goods and services has reached a definite and indisputable level of saturation within the UK. There is no doubt that the opponent’s NEXT goods and services do have a very substantial reputation in the UK as well as in other countries.

23. In considering the substantial reputation of the opponent I take into account that 89% of its overall sales are in relation to clothing and accessories. I note that these accessory goods include those goods claimed by the opposed application. I take note of the opponent’s prolific advertising and presence in the overseas marketplace which was all taking place long before the priority date of the opposed application. Exhibit SLN-7 contains copies of magazine advertisements as well as lists of the magazines in which the opponent has advertised its NEXT branded goods. The magazines listed in the exhibit include such titles as OK Magazine, Heat, Cosmopolitan, Elle, Beautiful Homes, Hello Magazine, Marie Claire, New Woman and She. Distribution numbers have been provided for the publications listed and I am satisfied that the combined circulation of these publications is very significant. I am also satisfied that on the balance of probabilities it is highly likely that a number of Australian consumers have come into contact with these publications and the opponent’s advertisements. 

24. In saying this I turn to the evidence of tourism levels between Australia and the UK which is located in exhibits SLN-5 and SLN-6. The figures in these exhibits demonstrate very considerable traffic between the UK and Australia which has occurred prior to the filing date of the opposed application. The information from the Australian Bureau of Statistics demonstrates that the UK is the third largest source for short-term arrivals in Australia (at 13%) and that the UK is one of the main destinations for Australian residents (at 10%). In 2005 alone over 900 000 Australians visited the UK. This evidence has been gathered by both official statistical information and via impartial third parties, by The Australian Bureau of Statistics and by British Tourism & Trade, and has not been disputed.

25. Given the saturation level of the opponent’s reputation in the UK for its NEXT goods I am satisfied on the balance of probabilities that a number of Australian residents will have come into contact with the opponent’s NEXT branded goods. I am also satisfied that with the opponent’s very considerable reputation and presence in the international marketplace that it is likely a high number of Australian residents would be aware of the opponent’s NEXT branded goods and would be caused to wonder if there was a connection between them and the applicant’s same goods branded with its NEXT trade mark.

26. While the opponent’s considerable reputation has been developed overseas, I consider that I need to give it weight in this case, since the repute of its NEXT branded goods is overwhelming in the UK and has reached a level of saturation which can not be disputed. This reputation had also been developed before the priority date of the opposed application. Coupled with the statistical evidence of travel between Australia and the UK, I consider that, given the impressive reputation evidenced by the opponent in its NEXT trade mark, a significant number of Australian consumers would at the very least subscribe to a reasonable doubt⁸ as to some sort of connection between that well-known trade mark and the applicant’s trade mark, particularly since the trade marks are identical. When to this are added the facts that the goods the NEXT trade marks are used on are the same and given the enormous size and character of the opponent’s reputation, the degree of speculation would, in my assessment, rise to, at the very least, the reasonable doubt required to trigger section

60.

27. The ordinary consumer would, in my view, reasonably subscribe to the view that the applicant’s NEXT trade mark had been adopted for no reason other than to denote a connection with the commercial success of the opponent’s NEXT trade mark. Therefore, the opponent has established a ground of opposition under the provisions of section 60. Having found in favour of the opponent in terms of section 60 there is no need for me to discuss the other grounds set out in the notice although this ground or any others in the Act may also be relied on in the event of an appeal from this decision.

8

Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd

(1954) 91 CLR 592 at 594-5

Decision

28. Section 55 of the Act provides: 

Decision

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.

29. I find that the opponent has met the onus upon it, in terms      of the grounds of opposition under section 60 argued at the hearing. I refuse to register trade mark application 1317873.

Costs

30. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs, according to the official scale set out in Schedule 8 of the Trade Marks Regulations 1995, against the trade mark applicant Gordon Simpson Agencies Pty Ltd.

Bianca Irgang Hearing Officer Trade Marks Hearings 21 December 2011