NSE Products Ltd v International Waters Pty Ltd
[2011] ATMO 35
•9 May 2011
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by NSE Products Ltd to registration of trade mark application 1246969(3) - NEW SKIN BEGINS - filed in the name of International Waters Pty Ltd.
Delegate: | Iain Thompson |
Representation: | Opponent: Melissa Marcus of Counsel, instructed by Malleson Stephen Jaques Applicant: Blake Knowles of Cullens, Patent & Trade Mark Attorneys |
Decision: | 2011 ATMO 35 Section 52 opposition – subsection 44(1) trade marks NU SKIN and NEW SKIN BEGINS are deceptively similar; subsection 44(3)(a) - honest concurrent user not established – no other circumstances. Registration refused. |
Background
1. In this matter International Waters Pty Ltd of Helensvale, Queensland, (‘the applicant’) has applied to register a trade mark current details of which appear below:
Application No: 1246969
Priority Date: 18 June 2008
Goods:Class 3: Cosmetics; skincare products and preparations including skincare cosmetics, skin and facial moisturisers and creams, anti-ageing and rejuvenating preparations, skin and facial cleansers and toners, exfoliants, facial masks, essences for skin care, hand and body creams and lotions; the aforesaid goods in lotion, cream, gel and liquid form; soaps; perfumery; hair lotions and hair care preparations; toiletries; essential oils; massage oils; cosmetic oils; shower and bath gel and lotions; bath oils; deodorant and antiperspirants for personal use; sun protection and sunscreen preparations; after-sun oils and moisturisers; cotton for cosmetic purposes; gift packs and gift sets in this class
Trade Mark: NEW SKIN BEGINS
2. The application was examined in accordance with section 33 of the Trade Marks Act 1995 (‘the Act’), accepted for possible registration and advertised as such in the Australian Official Journal of Trade Marks on 9 September 2008.
3. On 14 November 2008 NSE Products Ltd, of Provo, Utah, USA (‘the opponent’) filed Notice of Opposition, (‘the Notice’) to registration of the trade mark. The Notice cites most of the grounds available under the Act including those which were argued at the hearing under sections 41, 42(b), 44 and 60. For the sake of completeness, I record that those other grounds listed in the Notice have not been established.
4. I heard the submissions of the opponent and applicant at a hearing in Sydney on 17 February 2011. The opponent was represented by Melissa Marcus of Counsel, instructed by Malleson Stephen Jaques. The applicant was represented by Blake Knowles of Cullens, Patent and Trade Mark Attorneys.
The Evidence
5. The parties have served and filed evidence in support, evidence in answer and evidence in reply as is summarised below:
| Declarant | Position | Shortform | Date made | Exhibits |
| In Support | Secretary of opponent | Whitehead 1 | 29 January 2009 | TW-1 to TW-4 |
| In Answer Dean Doherty | General Manager of applicant | Doherty | 6 August 2009 | DD-1 to DD-16 |
| In Reply Tyler Whitehead | Secretary of opponent | Whitehead 2 | 16 August 2010 | TW-1 to TW-2 |
6. Mr Whitehead in Whitehead 1 states that the opponent has three Australian trade mark registrations:
Registration No: 778650
Priority Date: 17 November 1998
Goods:Class 3: Cosmetic and perfumery products; preparations and lotions for the care of the skin and of the hair, skin cleansing lotions, facial scrubs, skin revitalizing clays and compositions, skin toners, skin moisturizers, skin rejuvenating creams, facial lift compositions, body cleansing gels, exfoliators, hand lotions, body lotions, shaving lubricants, after shave lotions, cosmetics containing non-medicated sun protectants for the skin, shampoos and hair conditioners, eyelash treatment, mascara, nail cream, nail polish remover, scalp conditioner, deodorant, eye makeup remover, eye liner products, eyebrow pencil, eye shadow, lipsticks, lip liner, lip gloss, nail care products, foundation, powder, and holding sprays.
Class 16: Printed material, magazines, catalogs, brochures, folders, paper bags, posters, photographs, gift boxes, business cards, letterheads, envelopes, note pads, shipping labels and address labels
Trade Mark: NU SKIN
Endorsement: Provisions of section 41(5) applied.
Registration No: 786586
Priority Date: 25 February 1999
Goods:Class 3: Cosmetics; preparations and lotions for the care of the skin, skin cleansing lotions, skin cleansing soaps, facial scrubs, mask packs of mud and/or clay, skin toner, skin moisturizers, body cleansing gels, exfoliators, hand lotions, body lotions, shaving lubricants, after shave lotions, cosmetics containing non-medicated sun protectants for the skin
Trade Mark: NU SKIN 180
Registration No: 1234478
Priority Date: 9 April 2008
Goods/Services: Class 29: Dietary supplements; meal replacement drinks, and powders; dietary supplement drinks; meal replacement shakes; vitamin enhanced drinks; meal replacement bars
Class 32: Non-alcoholic drinks, including fruit juices, fiber drinks, and nutrient-enriched juice
Class 44: Services relating to a weight management program
Trade Mark: NU SKIN
7. Whitehead 1 and Whitehead 2 refer to the opponent’s use of the NU SKIN trade marks in Australia. For reasons which will become apparent, it is not necessary to discuss this evidence in more detail.
8. Doherty also refers to the history and use of the opposed trade mark in Australia and I will discuss this evidence in some detail when giving my reasons under subsection 44(3) of the Act concerning the honest concurrent user of the opposed trade mark.
Onus
9. It is the practice of the delegates of the Registrar to follow Pfizer Products Inc v Karam [2006] FCA 1663, as regards onus. Gyles J said of the onus in trade mark oppositions:
I am faced with the clear words of the statute, on one hand, and the opinions of various judges, on the other. There is no binding Full Court authority. I cannot find any instance where a single judge has actually applied the higher standard. In my opinion, in this case, comity does not demand that I depart from my view as to the meaning of the statute. ‘The fundamental responsibility of a court when it interprets a statute is to give effect to the legislative intention as it is expressed in the statute’ per Mason J in Babaniaris v Lutony Fashions Pty Ltd [1987] HCA 19; (1987) 163 CLR 1; cited with approval by Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ in John v Federal Commissioner of Taxation [1989] HCA 5; (1989) 166 CLR 417 at 439. I will, therefore, approach the matter on the basis that the opponent has to establish a ground of opposition, although not clearly establish such a ground, whether in a summary fashion or otherwise.
See also Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891 (18 August 2009) at [22] to [26]. The standard of the onus may nevertheless still be considered a live issue although, in my opinion, it has not been changed by the more recent decision of Lander J in Hills Industries Limited v Bitek Pty Ltd [2011] FCA 94 whose words at paragraphs 54-55 were clearly obiter and his Honour was in any event discussing section 56 of the Act rather than section 52:
In Kowa Co Ltd v NV Organon [2005] FCA 1282; 66 IPR 131 I said that I should follow the decision in Lomas because it was a decision of the Full Court and I should follow Bennett J’s decision in Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd [2003] FCA 901; 132 FCR 326 as a matter of comity and because other judges of the Court had followed that decision.
That is still my opinion. It may be, as Gyles J has pointed out, that the decision in Lomas was obiter and does not strictly need to be followed but it is a decision of the Full Court in circumstances where there are competing lines of authority at first instance which have left judges of this Court divided. The conflict cannot be resolved at first instance and must be resolved in the Full Court. As I indicated in Kowa Co Ltd v NV Organon [2005] FCA 1282; 66 IPR 131, I favour the reasoning of Gyles J in Clinique Laboratories Inc v Luxury Skincare Brands Pty Ltd [2003] FCA 1517; 61 IPR 130 but thought because of Lomas v Winton Shire Council [2002] FCAFC 413; [2003] AIPC 91-839 and comity I should follow the other line of authority. That is still my view, notwithstanding the criticism of that approach in Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787. [Stress added]
I will accordingly decide this matter on the balance of probabilities.
Section 44
It was common ground between the parties at the hearing that if the opponent cannot establish its ground under section 44 of the Act in relation to its registration 778650(3) NU SKIN, then the ground is a fortiori not established in relation to the opponent’s other registrations 786586 and 1234478. I will therefore discuss the section 44 ground only in relation to the opponent’s registration 778650(3) NU SKIN.
Section 44 of the Act relevantly provides:
44Identical etc. trade marks
(1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:
(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar goods or closely related services; or
(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.
Note 1:For deceptively similar see section 10.
Note 2:For similar goods see subsection 14(1).
Note 3:For priority date see section 12.
Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.
If the opponent establishes its ground under subsection 44(1), subsection 44(3) is relied upon by the applicant. That subsection of the Act provides:
(3)If the Registrar in either case is satisfied:
(a)that there has been honest concurrent use of the 2 trade marks; or
(b)that, because of other circumstances, it is proper to do so;
the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.
Note:For limitations see section 6.
Given that the registration on which the opponent relies has an earlier priority date than that of the opposed application and the goods on the application include goods which are the same or similar goods to those on the registration, it remains to be determined in terms of subsection 44(1) whether the trade marks of the parties are deceptively similar.
It was also common ground between the parties that the familiar law concerning deceptive similarity applies here. That is, deceptive similarity is to be assessed according to the tests set out in Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407 at paragraph 13 per Windeyer J:
On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant’s television exhibitions. To quote Lord Radcliffe again: ‘The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him . . . . It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole’: de Cordova v. Vick Chemical Co (1951) 68 RPC, at p 106. And in Australian Woollen Mills Ltd v. F.S. Walton & Co. Ltd. (1937) 58 CLR 641 Dixon and McTiernan JJ. said: ‘In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same’ (1937) 58 CLR, at p 658.
The standard which is applied to the test is that specified in Registrar of Trade Marks v Woolworths [1999] FCA 1020 (‘Woolworths’) at paragraph 50 by French J who said:
In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (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.
(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 Inc [1973] HCA 43; (1973) 129 CLR 353 at 362:
‘“...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.’“
And, I am to consider the context of the use of the trade marks. This contextual comparison was stressed in In Re Application by the Pianotist Co Ltd (1906) 1A IPR 379 at 380; 23 RPC 774 at 777, above, where Parker J said:
You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks.
The context of the uses of the trade marks is not the context in which the evidence shows that the parties have actually used their trade marks but of the potential uses to which the parties could fairly and normally put their trade marks within the scope of the specifications of goods of their respective application and registration. In Woolworths, above, French J said:
The test to be applied is that proposed by Evershed J in Re An Application by Smith Hayden & Co Ltd (1945) 63 RPC 97 at 101. That test may be paraphrased for the purposes of this appeal as follows. Assuming use by the proprietor of the cited trade marks in a normal and fair manner for any of the goods or services covered by the registrations of trade marks, is the Court satisfied that there is a reasonable likelihood of deception or confusion among a substantial number of persons if the applicant for registration also uses its mark normally and fairly in respect of services covered by the proposed registration.
The above test, which is often referred to the ‘notional user’ test, applies also to other factors including the potential modes of marketing of the goods and the potential fonts in which the trade marks may be fairly and normally rendered within the scopes of the registration or opposed application.
In the matter before me both trade marks are used notionally in relation to the identical wide range of cosmetics, perfumery and skin care products. The context of the comparison is in the ways in which such goods are normally marketed – viz: through chemists and the specialist counters of department stores, via hair and beauty salons, via party plan, the Internet and via other forms of direct marketing. Experience tells us that such goods may be heavily advertised and promoted through television and radio where the trade marks will be used aurally.
The opponent submitted that regard should be taken of the essential feature[1] of the trade marks which is, Ms Marcus argued, the element NEW SKIN which forms the first two words of the opposed trade mark and is the phonetic equivalent[2] of the whole of the opponent’s trade mark.
[1] Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 415
[2] In Re Application by Pianotist Co Ltd (1906) 23 RPC 774 at 777; and see Berlei Hestia Industries Inc v Bali Co Inc (1973) 129 CLR 373 (‘Berlei’ and ‘Bali’) and Wingate Marketing Ply Ltd v Levis Strauss & Co (1994) 49 FCR 89 (‘Levi’s’ and ‘Revise’).
Ms Marcus submitted that in comparing trade marks for the purpose of assessing deceptive similarity, particular attention is to be paid to the first part of a trade mark[3] and that I should make allowance for the imperfect recollection of either trade mark. In Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58 Keane CJ, Stone and Jagot JJ stated at [93]:
Allowance is to be made for imperfect recollection. On that basis it may be accepted that the marks are suggestive of the same idea. As stated by Lord Herschell’s Committee (cited by Latham CJ in Jafferjee v Scarlett[4] at 121-122):
Two marks when placed side by side, may exhibit many and various differences, yet the idea left upon the mind by both may be the same, so that a person acquainted with a mark first registered and not having the two side by side for comparison , might well be deceived if goods were allowed to be impressed with the second mark, into a belief that he was dealing with goods which bore the same mark as that with which he was acquainted. Take, for example, a mark representing a game of football; another mark may show the players in a different dress, and in very different positions, and yet the idea conveyed by each might be simply a game of football. It would be too much to expect that persons dealing with trade-marked goods, and relying, as they frequently do, upon the marks, should be able to remember the exact details of the marks upon the goods with which they are in the habit of dealing.
[3] Chantelle v K K Chandeal (1996) 36 IPR 563 and In Re London Lubricants (1925) 42 RPC 264.
[4] [1937] HCA 36; (1937) 57 CLR 115.
For the applicant Mr Knowles submitted that the estimation of any deceptive similarity requires an assessment of the respective trade marks as wholes[5] and the presence of phonetically similar elements in the trade marks under comparison is not sufficient of itself to conclude they are deceptively similar, particularly where the overall look, sound and meaning of the trade marks is different. In particular, said Mr Knowles, the addition of a word to another word or phrase can create a substantially different meaning or impression.[6]
[5] Torpedoes Sportswear Pty Limited v Thorpedo Enterprises Pty Limited [2003] FCA 901 per Bennett J at [78].
[6] Jockey International, Inc. v Darren Wilkinson [2010] ATMO 22 (‘Throttle Jockey’).
Mr Knowles submitted that the presence of common elements is not in itself sufficient to find that the trade marks are deceptively similar. In Health World Limited v Shin-Sun (Australia) Pty Ltd and Others (2008) 75 1PR 478 (‘Heathplus’), Jacobson J held that the trade marks HEALTHPLUS and INNER HEALTH PLUS were not deceptively similar despite the marks having some common elements. His Honour said:
The two marks convey different ideas and concepts. HealthPlus conveys, to the ordinary person, an impression of enhanced health and well-being. It is directed at the idea of overall or general health. It is not concerned with specific aspects of bodily health such as internal health.
By contrast, the Inner Health Plus trade mark conveys the impression that it is concerned with a specific aspect of bodily health, namely internal health.
Mr Knowles also submitted that in assessing deceptive similarity, a relevant consideration is the distinctiveness of the common elements of two trade marks. Where the common elements are highly distinctive, a finding of deceptive similarity will be easier to arrive at. However, where the common elements are essentially descriptive in nature, they must be given less weight in any assessment.[7] Mr Knowles observed that, in Pfizer, Inc v Schering-Plough Animal Health Corporation [2006] ATMO 92, I discounted to some extent the presence of the common ‘prefix’ SCAB- in the two trade marks under comparison:
... because in the context of the trade marks in question, and the probable trade channels and purchasers, it will be perceived as performing some form of descriptive function and not seen in itself as denoting a trade source. Thus, while the element SCAB or SCABI does occur in the first syllable of the trade marks, the principle in London Lubricants[8], above, cannot be viewed as having the force that it would if the ‘prefix’ did not refer to the purpose of the goods.
[7] ‘Frigiking’ Trade Mark [1973] RPC 739; Cooper Engineering Company Ply Ltd, v Sigmund Pumps Limited (1952) 86 CLR 536).
[8] Re London Lubricants (1920) Ltd’s Application (1925) 42 RPC 264.
Mr Knowles further argued:
The words ‘new skin’ in isolation lack any significant degree of distinctiveness for these particular goods. In ‘isolation’, the term ‘new skin’ would indicate to a consumer that the purpose of these goods is to encourage the growth of new skin or to make existing skin appear `new’.
The Opponent’s Mark NU SKIN was only registered after the provision of evidence of use. Due to the descriptive nature of the words ‘new skin’, a large part of any acquired distinctiveness it could be said to have acquired must be attributed to the unconventional orthography of ‘NU’. Conversely, the Opposed Mark is bestowed its distinctiveness by the addition of the verb BEGINS, which transforms the trade mark from something that is descriptive to something that is merely allusory or suggestive. The Opposed Mark is bestowed distinctiveness by its unusual grammatical construction, its short, pithy nature, and its lack of direct meaning without surrounding material.
Therefore, the commonality of the phonetically similar elements ‘NU SKIN’ and ‘NEW SKIN’ in the respective trade marks must be discounted to some extent due to the descriptive function that these words possess when used in isolation.
Reasoning
Subsection 44(1)
Registration 778650(3) NU SKIN on which the opponent relies was accepted for registration by the Registrar of Trade Marks under the provisions of subsection 41(5) of the Act after a consideration of both the opponent’s evidence of the use of the trade mark and:
(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;
It was found by the Registrar that the opponent’s trade mark does or will distinguish the opponent’s designated goods as being those of the opponent and the Registrar was satisfied on that basis that the opponent’s trade mark NU SKIN does or will distinguish the opponent’s goods from those of other traders.
It is, in my consideration, inappropriate (when comparing trade marks which are ‘word’ trade marks such as here) to discount an entire trade mark on the basis of an alleged lack of adaptation to distinguish, which trade mark the Registrar has previous found does or will distinguish the goods of the opponent.
In the context of the opponent’s trade mark NU SKIN there can be little doubt that the ‘word’ NU will be immediately seen, understood, pronounced and remembered by most people as being the phonetic and visual equivalent of the word NEW. The public is well used to such misspellings in trade marks and their intended meanings – there are 100 registered and pending trade marks on the Australian register of trade marks which include the misspelling of the word NEW as NU. It is obvious that the immediate clarity of meaning of the word NU is appreciated by the registered owners of such trade marks in such diverse markets as ‘milking machines’ and ‘cement mixes’ (as well as cosmetics) and is also understood by divers traders to have an immediacy of meaning to the public – otherwise those traders would not adopt trade marks which include the element NU. Further, it is apparent that the word NU within the opponent’s trade mark was seen and understood previously by the Registrar as the equivalent of the word NEW – hence the objections to registration under section 41 and the acceptance of the opposed trade mark under the provisions of subsection 41(5) of the Act.
The expression NEW SKIN is not of the same ilk as the words ‘world’, ‘master’ or ‘mate’ which are very frequently used by traders in the coinage of trade marks such as BURLED WORLD, DISASTER MASTER, or PLATE MATE. In fact there is just one registration of the phonetic equivalent of the trade mark NEW SKIN and this belongs to the opponent.
Mr Knowles’s submission that the expression NEW SKIN in the context of the opponent’s trade mark lacks any ‘any significant degree of distinctiveness for these goods’ is therefore not relevant to the task before me.
The word ‘begin’ is a verb which means, according to the Oxford Dictionary:
begin, v.1
1. intr. To open operations upon or in reference to (any action), to set oneself effectively to do (something), to be at the point of first contact with; to enter upon, take the first step, do the first or starting part; to commence, to start. An abstract notion, which is reached in various languages through the concrete notions of opening, broaching (French entamer), going into or entering upon (Latin inīre), rousing oneself to, attacking (Latin adorīri), setting oneself to (French se mettre), seizing hold of, or taking in hand (German anfangen), rousing oneself from inaction into activity (start).
In the context of the opposed trade mark, it is my consideration that most people will understand the word ‘begins’ as qualifying the words immediately preceding it. In other words, the opposed trade mark will be comprehended by most people as meaning, in effect, ‘new skin starts’. Mr Doherty, in giving reasons for the applicant’s adoption of the opposed trade mark says “[T]he trade mark ‘NEW SKIN BEGINS’ was created, as a short-form means of conveying the idea that ‘new skin begins’ (i.e. upon commencing use of our range of Alpha Hydroxy Acid-based products).”
Conversely, it is inherently unlikely, in my opinion, that the opposed trade mark would be viewed and understood as denoting a novel version of a product called SKIN BEGINS as there is no prior iteration of the product SKIN BEGINS. Understanding of the opposed trade mark as denoting ‘new/nu skin starts’ is particularly so for people who are aware of the opponent’s trade mark, have an imperfect recollection of it and encounter the opposed trade mark in shops or on the Internet on third party websites.
In other words, the addition of the word ‘begins’ to the words ‘new skin’ (or their phonetic equivalent ‘nu skin’) does not, in my opinion, form a new corporate identity, the word merely adds to or qualifies an existing corporate identity and gives it a tinge of immediacy. I add that in both ‘Throttle Jockey’ and ‘Healthplus’ the additional word in the allegedly similar trade mark occurred before the words ‘Jockey’ and ‘Health Plus’ and it is notoriously the beginnings of trade mark that most influence the perceptions of the public: London Lubricants. Here the extra word in the opposed trade mark occurs after the words NEW SKIN.
I therefore do not consider that the issue before me is in any way analogous to ‘Healthplus’ or ‘Throttle Jockey’, above.
I consequently concur with Ms Marcus’s submissions that:
(a)the dominant and essential (indeed, the only) feature of the opponent’s trade mark is the expression NU SKIN;
(b)the dominant and essential feature of the opposed trade mark is the expression NEW SKIN;
(c) NU SKIN is phonetically identical to NEW SKIN;
(d)the first part of the opposed trade mark is phonetically identical to the opponent’s trade mark NU SKIN.
(e)the remainder of the opposed trade mark (the word BEGINS) does very little to dispel the deceptive beginning and only qualifies the words ‘new/nu skin’ as beginning or starting: London Lubricants;
(f)the expressions NU SKIN and NEW SKIN convey exactly the same idea and have the same meaning;
(g)the opposed trade mark and the opponent’s NU SKIN trade mark are both notionally used in respect of exactly the same skin care and beauty products. The relevant goods at issue are identical.
(h)In terms of the doctrine of imperfect recollection, the consumer who has seen the opponent’s trade mark NU SKIN and encounters the opposed trade mark is likely to come away with the retained (but imperfect) recollection of the mark (in each instance) featuring the featuring the expression NU / NEW SKIN and confuse them on that basis.
I have already found that the two trade marks in question do not form dissimilar corporate identities.
I find the opposed trade mark to be deceptively similar to the trade mark on which the opponent relies and remark that the use of the trade marks on the same goods in the same marketplace could not do other than confuse and deceive.
The opponent has thus established its opposition under subsection 44(1) of the Act. However, the applicant looks to the provisions of subparagraph 44(3)(a) in order to establish that the applicant has used the opposed trade mark honestly and concurrently with that of the applicant. There are no ‘other circumstances’ in terms of subparagraph 44(3)(b) revealed within the evidence of the applicant.
Subsection 44(3(a)
As initial observations I note that in terms of subsection 44(3) the onus is on the applicant to establish its honest concurrent user of the opposed trade mark (or other circumstances); and, the relevant date is the priority date of the opposed application (18 June 2008).
As explained by Kenny J in McCormick & Company Inc v McCormick [2000] FCA 1335at [40]:
Section 44(3) gives the Registrar a discretion to accept an application that would otherwise be rejected under s 44(1) in the case of honest concurrent use or other circumstances making it proper to do so. The authorities establish that the principal criteria for determining whether registration should be permitted pursuant to s 44(3) include:
(1) the honesty of the concurrent use;
(2)the extent of the use in terms of time, geographic area and volume of sales;
(3)the degree of confusion likely to ensue between the marks in question;
(4) whether any instances of confusion have been proved; and
(5) the relevant inconvenience that would ensue to the parties if registration were to be permitted.
See In Re Alex Pirie & Sons Ltd’s Application (1932) 49 RPC 195; (1933) 50 RPC 147 at 159-160; In Re John Fitton & Co Ltd’s Application (1949) 66 RPC 110 at 112; and Stingray Surf Co Pty Ltd v Lister [1997] ATMO 3; (1997) 37 IPR 306 at 310-311. These factors are not necessarily exhaustive of the matters to be considered, but they are a useful guide: see In Re Electrix Ltd’s Application [1957] RPC 369 at 379. [Stress added].
As a background to my reasons, I observe that Mr Doherty states that the applicant started use of the opposed trade mark in 2006. He says:
The Applicant commenced use of the NEW SKIN BEGINS trade mark in August 2006 and has used the mark continuously in connection with its family of skincare products throughout Australia since that time. Annexed hereto and labelled ‘Exhibit DD-1’ is an email dated 10 July 2006 from Tracey Baillie of On Trak Communications [sic] of Mudgeeraba, Queensland, initiating the concept for the trade mark. Also included in Exhibit DD-1 is an email dated 16 August 2006 from Erin Larmor of Red Lentil Graphic Design, forwarding artwork for use in commencing promotions. Also included in Exhibit DD-1 is a copy of promotional leaflets dated 21 and 28 August 2006, and a copy of an email invitation issued by the Applicant to prospective attendees for a breakfast scheduled for 8 December 2006 promoting the products sold under the mark.
The Applicant’s selection of the NEW SKIN BEGINS trade mark was primarily the result of our desire to convey that the Applicant’s products feature the highest concentration of glycolic acid available to encourage the production of new skin cells. From this factual basis, the trade mark ‘NEW SKIN BEGINS’ was created, as a short-form means of conveying the idea that ‘“new skin begins’“ (i.e. upon commencing use of our range of Alpha Hydroxy Acid-based products). The mark was also selected because it builds on an earlier concept promoted by the Applicant (in promotions earlier than August 2006), that its products promote a ‘Fresh Beginning’ or are a type of ‘New Age’ Skin Care comprising ‘a new age formulation’. Annexed hereto and labelled ‘Exhibit DD-2’ is a letter addressed to ‘“Dear Alpha-H advocate’“ describing in part the derivation of the ‘new skin begins’ message. Also included in Exhibit DD-2 are pages showing the earlier use of ‘new’ in the Applicant’s marketing from the Applicant’s website as at 26 November 2004, taken from the Internet archive site >
The email dated 10 July 2006 from Ms Tracey Baillie of On Track Communications[9] at Exhibit DD-1 suggests a number of different expressions for potential use with the applicant’s ‘house’ trade mark as a tag line. Out of the alternatives which Ms Baillie suggested, the applicant selected the opposed trade mark. The applicant’s house trade mark appears below:
‘the applicant’s logo trade mark’
[9] I note that Mr Doherty refers to this organisation as being ‘On Trak Communications’ in his declaration but this is apparently a drafting error to judge by On Track Communications’s website: type="1">
The exhibits to the declaration show that, on the applicant’s webpages on its Internet website, the opposed trade mark is used on the top of each webpage as follows:
I note now that while trade mark status is claimed for the logo on the right, no such status is claimed for the words ‘New skin begins’.
And in virtually all printed promotional and advertising material, packaging, etc. annexed to Doherty, the words ‘New skin begins’ appear adjacent to the logo:
(‘the composite trade mark’)
There is considerable variation in the way the composite trade mark is presented. The words ‘new skin begins’ are occasionally run together, or on different lines, and appear above or to the side of the logo trade mark.
The honesty of the adoption and use
Mr Doherty attests:
I first became aware of the Opponent’s NU SKIN trade mark which is the subject of Australian trade mark registration no. 778650, upon being notified by Cullens of the opposition.
[…]
In my view, it is not possible that confusion would occur between the Applicant’s and the Opponent’s marks primarily for the following reasons:
(i) The modes of sale are different. The Opponent’s products are sold solely by network marketing. The Applicant utilises modes of sale other than network marketing. [I provide comments in relation to network marketing in paragraph 14, and information on the Applicant’s modes of sale in paragraphs 22-261.]
(ii) The marks ‘NU SKIN’ and ‘NEW SKIN BEGINS’ are entirely different. The Applicant’s mark is essentially a ‘slogan’ and the marks differ both visually and aurally. Furthermore, the respective marks have differing connotations. I would not have hesitated to approve the selection of the NEW SKIN BEGINS slogan even if I had been aware of the ‘NU SKIN’ mark, as I do not see any similarity between the respective marks.
(iii) The Opponent does not always use ‘Nu Skin’ as a trade mark. I note from the Opponent’s website at that the Opponent often uses the words `Nu Skin’ as a short form for its corporate name ‘Nu Skin Enterprises’ which must cause consumer confusion as to the function of the words ‘Nu Skin’ in the applicant’s business.
I note that at least subparagraph (iii), above is a post facto justification and consequently does not go to the honesty of the adoption of the trade mark. Mr Doherty, after all, declares that he was unaware of the opponent’s trade mark when the applicant adopted the opposed trade mark.
The extent of the use in terms of time, geographic area and volume of sales
In Doherty, revenue figures are given for sales under the opposed trade mark. Rather oddly, these include figures from the year 2005 which is antecedent to the date on which Mr Doherty declares the applicant started using the trade mark (late August 2006). Confidentiality is claimed for the “approximate estimated retail value” of sales claimed under the opposed trade mark and (while the sales are a few million dollars per annum) I assess the figures as being modest in comparison to those in other matters concerning similar goods which I have dealt with. (According to the Australian Bureau of Statistics, Australians spent in excess of $6.0 billion on cosmetics, toiletries and personal care items in 2005-06).
Sales under the opposed trade mark, Mr Doherty avers, have occurred throughout Australia via salons, through entities such as Moving Messages, TVSN Channel Pty Ltd, SPV Australia Pty Ltd (which I note is now deregistered), and Alpha Beauty. Sales also occur, states Mr Doherty, through prestigious retailers such as John Lewis, QVC, Harrods and Harvey Nichols though these latter are not within Australia. The applicant also sells through its website and is now franchising its own salons.
The Doherty declaration also gives details of the marketing budget. Mr Doherty declares:
The Applicant carefully manages its marketing funds to ensure that the best results for investment are obtained. Following is the Applicant’s marketing budget from 2005-2009 virtually all of which is used in relation to promotions that incorporate or feature the NEW SKIN BEGINS trade mark.
Confidentiality is also claimed for details of the expenditure on marketing – a discussion of these figures is therefore difficult. However, I would view the amounts as being comparatively quite modest. I observe again that there is an apparent discrepancy as Mr Doherty states that some of the marketing expenditure occurred in 2005, well before the opposed trade mark was selected by the applicant from a list of options suggested by Ms Baillie of On Track Communications in her email of 10 July 2006.
The degree of confusion likely to ensue between the trade marks in question
Mr Doherty states that the degree of confusion likely is low because of the way in which the opponent’s goods are marketed – a mode called ‘network marketing’. Mr Doherty says:
It is my understanding that the Opponent utilises network marketing as the means of selling its products. Generally, by this method, independent agents serve as distributors of the goods and build and manage their own sales force by recruiting and training other independent agents, and commission is earned on the agent’s own sales revenue as well as on the sales revenue of the sales force recruited by the agent and the agent’s recruits. My perception of network marketing is that the selling of the products occurs in pockets where a zealous representative is located. However, it is also my perception that the representative’s motivation can stem from the rewards offered rather than from conviction about the quality of the products. This method is not utilised by the Applicant as it does not accord with my vision of the marketing of the Applicant’s products by virtue of standing solely on their own merits.
I remark that it would, by this account of network marketing, be possible for a zealous sales agent to sell to salons, or other sales outlets similar to those through which the applicant’s goods are sold throughout Australia and that the evidence shows that the ingredient which is the ‘selling point’ of both parties’ goods is identical: glycolic acid.
It is concerning the degree of confusion likely to ensue that the opponent puts the emphasis in its argument. Ms Marcus submitted that the opposed trade mark is, with the exception of the opponent’s website usage, invariably used with the applicant’s logo trade mark being the word and letter ALPHA-H enclosed in an oval border. Simply put, the opponent’s argument is that any lack of confusion is unsurprising because the opposed trade mark is not used on its own as it is represented in the application for registration.
Mr Knowles, for his part, directed me to the applicant’s evidence of its Internet website where the opposed trade mark occurs some distance from the opponent’s logo trade mark on the opposite side of the page. This, he submits, is evidence of the use of the opposed trade mark on its own.
In any event, Mr Knowles submitted, it is possible for two different trade marks to be used at the same time and referred me to cases such as Wellness Pty Ltd v Pro Bio Living Waters Pty Ltd [2003] FCA 1048.
I consider that this latter argument goes more to the question of whether the opposed trade mark has been used, rather than if it has been used on its own for the purposes of any assessment within the context of issues under subsection 44(3). After all, if a trade mark has not been used on its own, the assessment of the likelihood of confusion if the trade mark is used as applied for (on its own) becomes, depending on one’s viewpoint, either an impossible task, or a question which allows only one conclusion in view of an earlier finding of deceptive similarity.
The difficulty that I have with the applicant’s reliance on the use of the opposed trade mark on its own on its Internet website is that, once a person has entered the website, that person knows that he or she is on the applicant’s Internet website. There is the presence of the applicant’s logo trade mark and Internet address to alert them to this. There is a reduced scope for confusion there – any more than if a putative purchaser had walked into a shop in the High Street emblazoned with the opponent’s logo trade mark and selling only the opponent’s goods. How then does this evidence of the applicant’s website speak to the assessment of the honest concurrent use of the opposed trade mark on its own as represented on the application for registration, and without the other identifiers of the applicant’s website address and the applicant’s logo trade mark which militate against the possibility of confusion?
However, a further difficulty arises because there is no evidence as to what proportion of the applicant’s sales under the opposed trade mark occur through its website. The number of other outlets through which the goods are sold is given in Doherty and total in the many hundreds which suggests that sales via the applicant’s Internet website are a rather minor proportion of sales under the opposed trade mark. Those sales under the opposed trade mark (other than on the Internet) happen where the goods may be physically inspected by the purchaser and occur under the applicant’s composite trade mark with both the opposed trade mark and the applicant’s logo trade mark used together on the packaging in which they are sold.
In other words, the applicant’s evidence, looked at as a whole, suggests that the vast majority of purchasers only ever see the applicant’s opposed trade mark and logo trade mark used together or (in the milieu of the applicant’s Internet website) in a context where confusion is reduced. However, the opposed trade mark is not the applicant’s composite trade mark – it is the words NEW SKIN BEGINS on their own.
Thus Mr Doherty’s evidence that there has been no confusion is not surprising. Confusion has been unlikely because the opposed trade mark has not been used in the marketplace so that it stands on its own. However, the opposed trade mark consists only of the words NEW SKIN BEGINS. Those words are, in the context of the opposed application, used or intended to be used on their own and unsupported by any other trade mark or identifier.
Accordingly, the opposed trade mark has not been used on its own in a way that permits any evidence-based assessment of the likelihood of confusion which I have previously assessed in terms of subsection 44(1) as being high when considered against the notional use of each of the parties’ trade marks in a fair and normal manner across the range of marketplaces in which the identical goods are sold.
The relevant inconvenience to the parties if registration were to be permitted
The opponent first began selling cosmetics under its NU SKIN trade mark in Australia in 1992 (Whitehead 1), some 16 years before the priority date and has averaged retail revenue during that time which is approximately twice that of the applicant’s much more recent revenue under the opposed trade mark.
At the priority date the applicant had had some two years of comparatively modest use of the opposed trade mark and marketing expenditure thereto which might be inferred, because of the discrepancies in the dates provided, to be possibly more realistically viewed as being drafted in terms of the applicant’s logo trade mark which was (I gather) in use on its own in 2005.
The opposed trade mark is, in the words of Mr Doherty, a slogan and appears most often within the applicant’s composite trade mark which incorporates the expression ALPHA-H. The expression ALPHA-H is both the house trade mark of the applicant and the most likely source for a verbal request for the goods. Conversely, the opponent’s trade mark is often used adjacent to the graphic image of a tree. But the opponent’s trade mark NU SKIN appears to function either as the opponent’s house trade mark or as the sole words by which the opponent’s goods will be identified, remembered and requested. Consequently, the opponent’s trade mark NU SKIN is not a strap or tag line or a slogan – it is the most likely source for a verbal identification of, and request for, the goods.
In my consideration, for the above reasons, the relative inconvenience lies very obviously with the opponent.
Because of the reasons given above, the applicant has not established its case under subsection 44(3) of the Act to my satisfaction and the opponent’s ground under section 44 is established.
It is unnecessary to consider the other grounds under which the opposition was argued.
Decision
Section 55 of the Act provides:
Decision
55. 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.
Note: For limitations see section 6.
I refuse to register application 1246969.
Costs
Having been successful, the opponent is entitled to its costs at the official scale which I award against the applicant.
Iain Thompson
Hearing Officer
Trade Marks Hearings
9 May 2011
21
0