Nordstrom, Inc

[2007] ATMO 24

TRADE MARKS ACT 1995

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

Re:Trade mark application number 852813(25) - NORDSTROM- in the name of Nordstrom, Inc.

Delegate:	Rowena Beal
Representation:	Ben Fitzpatrick of Counsel instructed by Davies Collison Cave of Melbourne
Decision:	2007 ATMO 24 Application considered under ss44(3)(b), evidence insufficient, application rejected

Background

1. Trade mark application number 852813 was filed on the 9^th October 2000 in the name of Nordstrom, Inc (the applicant). This application was a valid divisional of another trade mark application and accordingly claimed the 26^th October 1998 as a priority date. The goods claimed were as follows:

   Class 25: Clothing, footwear, headgear, hats, gloves, scarves, shawls, clothing belts, hosiery, socks

   The trade mark is the word NORDSTROM rendered in plain script.

2. The application was examined under the Trade Marks Act 1995 (the Act) and two adverse reports were issued. The examiner maintained that the application was substantially identical and deceptively similar to a prior registration and thus the application was caught by the provisions of section 44 of the Act. The applicant filed two applications, on the 7^th January 2003 and the 17^th September 2004 respectively, pursuant to section 92 of the Act to remove the cited mark, registration 745906 in the name of Starite Distributors Pty Ltd, from the Register. These removal actions were opposed by Starite Distributors. The first action in relation to class 25 resulted in the items ‘ladies dresses’ and ‘ladies knitwear’ being removed from the claim, leaving ‘men’s shirts’ and ‘men’s jackets’ in class 25[1]. The second action in relation to both class 24 and 25 resulted in no change to the registration[2].

   [1] (2004) ATMO 75

   [2] (2006) ATMO 89

3. Concurrent with the second non use action against the cited mark, the applicant also requested a reconsideration of the grounds for rejection on the basis of ‘other circumstances’ under subsection 44(3)(b). These other circumstances consisted of extensive use of the mark in the United States market and elsewhere, and the ‘spill over reputation’ gained in Australia from such use and promotion. The examiner considered the applicant’s submissions, however, another adverse report was issued. The applicant then sought a hearing on the matter.

4. The matter came before me, as a delegate of the Registrar, on the 11^th September 2006 in Melbourne. Mr Ben Fitzpatrick of counsel, assisted by Ms Fiona Brittain of Davies Collison Cave of Melbourne, provided representation to the applicant.

   Submissions and evidence

5. The lead declaration of David Mackie set out the history and use of the Nordstrom, Inc mark in the US and other jurisdictions. In addition, there was a supplementary declaration from Fiona Brittain attesting to investigations into trading activities of Starite Distributors Pty Ltd and another Australian company Nordstrom International Pty Ltd. The latter company appears to be an authorised user of the mark and operates from the same address.

6. At the hearing the applicant opened its submissions with a reliance on a presumption of registrability and the fact that the Registrar, under the provisions of subsection 44(3)(b) of the Act, has a broad ranging discretion to take into account matters outside the range of those considered in determining honest concurrent use. The submissions also addressed how this discretion had been applied in previous cases, and how ‘other circumstances’ should be interpreted more broadly than the ‘special circumstances’ of the 1955 Act.

7. The trade mark was first used in Australia in December 1998. The applicant concedes that, while there was limited use in Australia, the quite extensive use of the mark in overseas markets resulted in a spill over effect of the reputation gained overseas into the Australian marketplace. The applicant drew my attention to recent cases on the issue of reputation outside the jurisdiction in which registration was sought.

8. Other points referred to by the applicant were that the trade mark in question consisted of part of its company name and there would be significant inconvenience should it be denied registration in Australia.

   Discussion

9. The registration raised as a citation against the applicant’s trade mark application is registration number 745906, in the name of Starite Distributors Pty Ltd, and currently claims goods as follows;

   Class 24; Manchester

   Class 25; Men’s shirts, men’s jackets

   The trade mark consists of the word NORDSTROM rendered in plain script.

10.  The priority date of the cited mark is 9^th October 1997 which predates the claimed first use of the applicant’s mark in Australia by over a year. The applicant has not pursued acceptance of its mark under the honest concurrent use provisions but instead is relying solely on the provisions of subsection 44(3)(b). The provisions of subsection 44(3)(b) provide for acceptance of an application where, because of other circumstances, it is proper to do so.

11.  Whilst there is not a great deal of judicial comment on the meaning of ‘other circumstances’ under the 1995 Act, Shanahan’s Australian Law of Trade Marks & Passing Off 3^rd Edition 2003 at [9.90] has suggested that ‘other circumstances’ ought to be construed more broadly than ‘special circumstances’ that were available under the 1955 Act. In fact, these circumstances may comprise any aspect of the applicant’s use tending to minimize the risk of confusion or showing particular hardship. The ultimate consideration must be whether it is ‘proper’ to do so. The applicant has argued the following matters, inter alia, constitute the ‘other circumstances’ to be considered.

12.  The applicant is claiming their substantial use overseas over many years as the basis for a ‘spill over’ reputation in Australia. Use in Australia of the applicant’s mark is limited. However, the history of use overseas is as follows. The applicant company is based in the US, was founded by a John Nordstrom, and first began operation in 1901 from a single shoe store in Seattle, USA. In 1963 the store expanded into apparel and from the 1980s has spread across the US. During the 90s the business also expanded into other jurisdictions and the applicant provided registration certificates for Canada, Japan, New Zealand, Korea, Taiwan and OHIM.

13.  Since the mid 90s Nordstrom, Inc has operated a web site, however, I note this website only allows online orders to be placed for dispatch to US postal addresses. Orders from Australia are possible but may only be placed by phone, and the first record of an order being dispatched to an Australian address is late 1998, some 14 months after the registration of the cited mark. The applicant submitted details of orders made by phone and posted to Australian addresses between 1998 and 2005. While the records are not entirely clear it seems the total number of garments shipped to Australia over that period of time number less than 100, and that many of these garments bore trademarks other than the word NORDSTROM solus. In total, it appears that between 1998 and 2005 there were less than 20 items bearing the current trade mark were sent to Australia. Many of those transactions occurred after the filing date in October 2000. While use in Australia is clearly minimal when considered in the context of the overseas activities of the applicant, the applicant claims sales of US$ 7.5 billion through their 186 stores in the US and other countries. It should conversely be noted that these figures are not all related to use of this trade mark on the goods claimed with this application as the applicant’s retail outlets sell a large range of goods bearing a range of brands.

14.  The question to be considered, however, is not whether there has been sufficient use in Australia - use in Australia is not in question - but rather, has use in other jurisdictions been enough to provide the applicant with a sufficient reputation in Australia to minimise the risk of deception and confusion in this marketplace, and are the circumstances of the applicant’s case otherwise such that acceptance is proper? In other words, have Nordstom’s business activities overseas resulted in sufficient level of consumer knowledge of their goods in Australia, and does that reputation attract new customers? This is essentially a question of fact.

15.  The applicant has suggested that use and reputation in a jurisdiction should not be essential to allow the application of subsection 44(3)(b). I do not believe that it is an intention of subsection 44(3)(b) of the Act to allow that use and reputation overseas can automatically be the basis of a registration in another jurisdiction. Such a view of section 44 would allow global registrations by default, irrespective of the applicant’s intentions with regard to offering their goods and services in particular countries. However, as discussed below, whilst I agree with the applicant that it is not necessary to demonstrate use in Australia as a necessary adjunct to the acquisition of reputation here, the applicant must still demonstrate that it has reputation in Australia in order to succeed.

16.  Support for the view that reputation may extend beyond the jurisdiction where a mark is actually used comes from several cases, mainly related to assessing reputation under a passing off action. See for example BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1977) 51 ALJR 254, and Anheuser-Busch Inc v Budejovicky Budvar (1984) 4 IPR 260. Another more recent case from New Zealand considering this issue is Next Retail Ltd v Stefanel Next Pty Ltd (IPONZ) (T15/2006) where an opposition was allowed even though there was no evidence of use of the trade mark NEXT in New Zealand. I agree that in a time of frequent travel between countries, and consumer awareness of trends and products in other countries bought about by mass media and internet activity it is no longer valid to consider that a trade mark will only be known within the boundaries of the jurisdiction where it is used. Australian consumers may become aware of the more well known brands of other cultures by exposure to media where these brands are frequently portrayed.

17.  However, regardless of the issue of use in a particular jurisdiction, the requirement that a reputation must be established in that jurisdiction remains an essential requirement and this is reflected in the trend of recent judicial decisions. See for example ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 and Le Cordon Bleu BV v Cordon Bleu International Ltee [2000] FCA 1587. Such a reputation could be expected to be sufficient to allow consumers to differentiate between two sets of goods bearing the same trade mark on the basis of that reputation. Notably, ConAgra at 237 per Lockhart J and at 271-272 per French J considered the reputation of the mark must be in some degree substantial in the passing off context. This degree of reputation would also appear to be relevant in this case under section 44(3)(b) as the applicant must establish that their reputation is significant enough that consumers will be able to distinguish between the applicant’s goods in the face of the reputation of the goods of a proprietor of 10 years standing in the marketplace.

18.  The applicant in the current case bases their claim for the acquisition of reputation in Australia on the following facts:

Visitors from Australia to the US in 2002 and 2003 were around 400,000 being indicative of the number of Australians potentially exposed to the mark,

Australian consumers being exposed to advertising under the trade mark through International magazines,

Promotion by third party websites in Australia which facilitate direct purchase of goods from the US, and

Australian customers are able to make telephone orders to the US company

From these facts I am asked to infer reputation in Australia.

19.  Establishing the extent of a reputation in a jurisdiction where there has been little business activity from the applicant is difficult.  The evidence must show likely exposure of consumers to, and consequent knowledge of the trade mark. As remarked by Lockhart J in Conagra ‘evidence of travel between jurisdictions presents considerable difficulty as proof of reputation, since it is not possible to assess how many travellers would have seen the goods concerned or advertising associated with them.’. In this case the relevant market in Australia is the general public and not a specialist market. 

20.  The applicant has argued that the number of travellers moving between the US and Australia will necessarily result in ‘recognition’ of their trade mark. However, this in itself is not enough to demonstrate reputation. Simply showing there has been a movement of people between countries does not establish that consumers in this country have sufficient knowledge or perception of Nordstrom’s reputation that they would not be confused by the goods of two proprietors bearing the same trade mark in Australia. Clearly evidence of many travellers moving between countries may assist in establishing a reputation, but this evidence will be more compelling if supported by additional facts indicating the establishment of the reputation. Clearly evidence of many travellers moving between countries will assist in inferring a reputation, however, it must be demonstrated that the reputation exists.

21.  Such reputation may also be demonstrated through more specific targeting of consumers in the new jurisdiction through some sales and promotion enabling consumers to make the mental connection between trade mark use in a foreign country and that of their own country. This point was illustrated in Dominion Rent A Car v Budget Rent A Car Systems(1970) Ltd [1987] 2 NZLR 395 which looked at the degree of activity required to justify a finding that an international company had sufficient business connection in New Zealand to which goodwill could attach. The judge, in obiter commentary, found that a company with an international reputation must still demonstrate some business connection with the new jurisdiction in order to ‘localise’ that reputation in the minds of the consumers of New Zealand. I consider this comment to be valid to the current circumstance.

22. The applicant has argued that its stores in the U.S. are placed in cities that tourists are likely to visit. I do not find this compelling. The nature of the goods here in question, being ordinary articles of clothing without any specialised purpose, would suggest that immigrants from the US to Australia and tourists to the US on extended stays may be aware of the reputation of Nordstrom’s mark. However, short term tourists do not necessarily travel across the world to buy ordinary articles of clothing. Travellers for short term tourism purposes are traditionally travelling on a timetable and intending to visit specific tourism sites. Unless on a tour with the specific purpose of visiting clothing retailers I think it unlikely that a casual visitor would pay particular attention to brands of clothing on their way to the next item on their itinery. Evidence of movement between the countries will assist with the inference of reputation if there are other supporting factors, however, in itself this evidence is not sufficient.

23. This matter was also considered in Next Retail, being a New Zealand case. The Assistant Commissioner found that the UK proprietor had established sufficient reputation in New Zealand at the relevant date on the basis of ‘spill over‘ reputation. The opponent in this matter provided evidence of migration and tourism figures, as well as more extensive international advertising, which suggested that a proportionately large number of the New Zealand population had been exposed to the trade mark in any one of many countries where the opponent conducted business. The level of reputation demonstrated appears to have satisfied the Assistant Commissioner in that instance. Clearly the onus rests on the applicant to demonstrate sufficient awareness of their mark amongst consumers in Australia to reduce the likelihood of deception or confusion.

24. Chase Manhattan Overseas Corp and others v Chase CorpLtd and another 8 IPR 69 also discusses ‘slopover’ reputation being reputation spreading to consumers of one jurisdiction from use in another. Wilcox J in that instance concluded that such reputation could only exist where there were close links between countries, specifically Australia and New Zealand being sufficiently close. These close links derived from businesses operating in both countries, branded products common to both, the movement of populations back and forward for tourism and immigration purposes. While the links between Australia and the US in the current case may not be as close as Australia and New Zealand for instance, or even arguably Australia and Britain, I am satisfied that the respective marketplaces are similar enough that there would be no hindrance to reputation permeating between these particular countries.

25. The applicant points to advertising in international newspapers and magazines. I do not rely on this evidence to support the required level of reputation in Australia. Firstly, the applicant has not provided any of the advertising material referred to and secondly, there is little information provided as to the frequency or timing of those advertisements, nor the nature of those ads. The applicant has provided a limited range of newspaper articles published in Australia, such as have appeared in the Financial Review or some local newspapers such as the Cairns Post. These articles appear to refer to the Nordstrom company in the context of its business activity in the US, or other brands belonging to Australian producers being stocked by Nordstrom retail outlets in the US rather than any reference to the goods in question here. This does not appear to be specific advertising targeting potential Australian consumers with the aim of increasing sales and reputation in this country.

26. The fact that the applicant has a web site was also brought to my attention. In the current case, the purchase of Nordstrom products online through their website is not available to consumers outside the U.S., nor is there any indication provided on the site that such customers may purchase their goods through other means. In its submissions the applicant states that phone orders are possible although it is not clear how international purchasers would know this. The only advice provided to international purchasers on the website was under the heading ‘International Orders’ where there is a statement as follows;

‘At this time, we are not able to send orders internationally but we hope to in the future. You may, however, purchase from an international address and ship to a U.S. destination.’

I have not been able to find any invitation to international customers to place an order by phone. I conclude that there does not appear to be a deliberate or specific intention that goods bearing the Nordstrom trade mark are being marketed to consumers in Australia. The website is available for viewing by potential customers in Australia as it is for potential customers anywhere in the world who may be interested in purchasing any brand offered through the website. However, there is not a specific promotion or marketing of Nordstrom branded clothing to Australian consumers.

27. Clearly once the goods have been ordered from Australia and shipped to an Australian address then that activity would constitute use of the mark. However, a reasonable number of such sales would be required to substantiate the significant reputation required. The only sales in evidence were of a sporadic and occasional nature and not indicative of a significant or even a growing reputation in Australia. In Contal Co Pty Ltd v Szozda 1986 AIPC 90-317 it was the judge’s view that a trader has a reputation to protect where he has customers, not simply where he has a presence. The extent of Nordstrom’s ‘spill over’ reputation and international promotional activity has resulted in, between 1998 and 2005, the sale of about 20 garments bearing the Nordstrom trade mark to Australian customers.

28. In addition the applicant relies on promotion through third party websites, and The former website appears to be no longer viable and instead refers users on to some general mail forwarding services for those wishing to purchase goods from overseas companies in general. The second website appeared to sell a variety of sale stock from a large range of clothing brands. The brands on offer at any one time appeared to be random, presumably on the basis of whatever sale stock was available to the proprietors, and there was no search facility to search for goods of a particular brand. I accept the applicant’s claim that they have on occasion sold stock through this website, although whether this stock carries the Nordstrom brand or one of the other brands sold through the applicant’s retail outlets is uncertain.

29. The applicant has claimed promotion in Australia includes references to the applicant’s mark through a subscription publication called ‘The Shoppers Guide’. The edition supplied in the evidence was dated 2004, some years after the filing date of the application. I am unable to locate a current version of this publication, nor is their website to be currently available. The publication appears to have been a mail forwarding service that compiled a directory of Australian and overseas companies that have a web presence. This publication is itself advertised in a Sun Herald supplement dated 13 March 2005, and through another website. The Nordstrom trade mark did appear in the directory amongst other trade marks and provided the information that the company’s goods may be purchased in US dollars and shipped to a US address. Alternatively, the goods were available through the mail forwarding service provided by the now defunct web site. Again there is no mention that phone orders are available to international purchasers, nor is there a phone number provided. This publication appears to emphasise that this is a US company primarily targeting US consumers with goods that may only be purchased with US currency.

30. I have not found the promotion of the applicant’s mark through its own website, third party websites, or through its international advertising to be persuasive in establishing sufficient reputation in Australia at or since the filing date.

31. The applicant has submitted that its business activities are directed to the upper end of the retail market, with their goods being ‘high quality, fashionable and relatively expensive’. Currently, Starite’s mark is registered for a restricted range of goods in classes 24 and 25, which the applicant claims is sold through the wholesale marketplace or to corporations to re-badge with corporate logos. The fact remains, however, that Starite’s goods do progress to retail outlets still bearing the Nordstrom trade mark. This was established in the applicant’s own evidence through the investigators report referred to in the Brittain declaration.

32. While there may be some difference in the type of customers to whom Starite deal and those to whom Nordstrom target their products in their overseas markets, the fact remains that Starite’s registration is not restricted to wholesale services nor to a particular quality of product. In assessing the risk of deception or confusion contemplated by section 44 I must assume that both marks will be used in a normal and fair manner[3] and for all the goods covered. I must consider the statutory rights of the registered proprietor rather than the actual use to date. As stated in Shanahan 3^rd Ed, ‘differences extraneous to the trade marks themselves, such as differences in getup, price, quality, and manner of sale or promotion, should have no relevance under s44, nor should the fact that the actual products sold are not competitive.’ I therefore consider that the goods of Starite and Nordstrom, as claimed, are the same and similar for the purposes of assessment under section 44.

[3] Smith Hayden & Co Ltd’s Appn (1946) 63 RPC 97 at 101

33. It is worth noting that where the applicant has not established its reputation in Australia it would be difficult to see how the marketplace in Australia would be aware of the attributes of Nordstrom’s goods, as claimed by the applicant. If reputation in Australia cannot be established then consumers would not be aware that there was in fact some distinction in quality, price, or any other feature of the goods of Nordstrom from those of Starite’s goods that have been in the marketplace since 1997.

34. The applicant has argued that their trade mark is also their name and consequently it would be difficult for them to ‘re-badge’ were they to be denied registration. This is indeed an important point in the overall consideration. However, it must also be weighed against the inconvenience to the cited proprietor who has an established and pre existing registration for 10 years in this jurisdiction. The word Nordstrom, by the applicant’s own account of their history, is the surname of the company founder. Indeed, the name is listed in the Australian electoral roll 65 times again indicating it is a surname, although not a common one. The honesty of adoption of the applicant’s mark is not in question, however, the choice of a surname for use in relation to goods and services is not at all unusual and the Act at section122 specifically allows that traders should be able to use surnames to indicate the trade source of goods and services. The history of Starite’s adoption of the mark is not available to me for these proceedings. Clearly there is considerable inconvenience to the applicant should they not be permitted to register their mark, especially if it is ever their intention to increase their business activity in Australia. However, the inconvenience to a proprietor who has been established in Australia for over 10 years is also significant. Clearly Starite’s defence of their registration in the two recent non use actions attests to their commitment to their mark as well.

35. I note the applicant’s comments regarding Starite’s probable awareness of the reputation of the Nordstrom, Inc trade mark at the time of the registration of the mark in 1997. I also note the allegation of ‘sharp business practice’ on the part of Starite. However, the applicant has presented no evidence, nor can I find any indication that Starite was aware of the applicant’s mark. There is certainly no indication of fraud or intention to obtain registration here to prevent or limit competition by the applicant in Australia as discussed by Williams J. in Seven Up Co. v O.T. Ltd, 75 CLR 203 and also Davies J in Anheuser-Busch v Castlebrae Pty Ltd (1991) AIPC 90-840. I note that at the time of adoption of the mark in Australia, Nordstrom Inc’s business activities were largely confined to the US. I accept that the applicant has a significant reputation in the US. However, as the applicant’s reputation in Australia has not been established at a sufficiently significant level as at the filing date, and the date of first use for this applicant is after the date of first use by Starite, it would be incorrect to say that the applicant is the owner of the mark in Australia.

36. I do not think the provisions of subsection 44(3)(b) are intended to confer protection on a trade mark owner who has little reputation in a particular jurisdiction. To do so would offer a virtual international monopoly in a trade mark which the proprietor may never exploit in Australia. The applicant has asked me to infer reputation in Australia from use and reputation overseas, but has not stated their intention to open retail operations or otherwise specifically target Australian customers. Nor has any indication of a growing reputation been demonstrated through evidence such as consumer surveys, expanding sales figures, expansion in customer services aimed at Australian consumers, increase in targeted advertising or website promotion etc which would be expected. Indeed the number of promotional opportunities for the applicant appears to be shrinking since the date of application in 2000 rather than expanding as would be expected if the applicant were seeking to expand their sales activity and reputation in Australia. Justice Heerey in Cordon Bleu referred to the nature of the reputation of a brand and remarked ‘It is one thing to say, as in Conagra, that a trader has a reputation in Australia as one who is known here and who might potentially do business here. It seems rather different when the essence of the trader’s business, as known in Australia, is that it is carried on at a particular place outside Australia’. If Nordstrom, Inc could be said to have any reputation in Australia at all it is as a US company primarily targeting US consumers.

37. Subsection 44(3)(b) can potentially have application where there is little or no business presence in Australia and where use and reputation overseas may be taken into consideration. However, the applicant must establish at least some reputation in Australia as a consequence of that use to demonstrate that the applicant’s trade mark and that of the cited proprietor can co exist in the Australian marketplace without confusion. The applicant claims that spill over reputation exists in Australia, but its existence is unsubstantiated on the evidence before me and I am not satisfied that Nordstrom Inc’s trade mark had sufficient reputation among a substantial number of persons in Australia at the filing date or since that date.

Decision

38. I am not satisfied that the applicant has established sufficient reputation in Australia to allow their mark to co exist with the cited registration of 745906. I find that there are no ‘other circumstances’ that allow acceptance of this application under the provisions of subsection 44(3)(b) at present. Under the provisions of section 33(3) and section 44(1) of the Act I reject this application.

Rowena Beal
Senior Examiner
Trade Marks Hearings
1^st May 2007