NSW Food Authority v National Foods Milk Limited
[2009] ATMO 65
•25 August 2009
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS, WITH REASONS
Re:Opposition by NSW Food Authority to registration of trade mark application 1159682, 1159684, 1159685(29) - HEARTACTIVE - filed in the name of National Foods Milk Limited.
Delegate: | Terry Williams |
Representation: | Opponent: Christian Dimitriadis of counsel, instructed by Moray and Agnew, solicitors Applicant: Ed Heerey of counsel, instructed by Blake Dawson Waldron, solicitors |
Decision: | S 52 opposition: S 42(b) and s 43 not established. Applicant refused permission to rely on further evidence. Registration proceeding. Costs. |
Background
National Foods Milk Limited filed trade mark applications 1159682, 1159684 and 1159685 on 6 February 2007. The applications are for registration of trade marks in respect of various goods in class 29 or in classes 29 and 32. The details are as follows:
| 1159682 | 1159684 | 1159685 |
| PURA HeartActive | HeartActive | |
| Class 29 and 32 goods | Class 29 goods only | Class 29 and 32 goods |
Class 29 goods: Milk; milk beverages; flavoured milk; milk based products; yoghurt; dairy products; dairy based products.
Class 32 goods: Fruit juices; non-alcoholic fruit juice beverages.
The applications have been advertised by the Trade Marks Office as having been accepted for possible registration, but this is opposed by NSW Food Authority (“the opponent”). The opponent is an agency of the New South Wales Government. It has the statutory responsibility for enforcing compliance with the Food Act 2003 (NSW) (“the Food Act”), under which it was created.
The opponent has used the process under Part 5 of the Trade Marks Regulations1995 to file, and serve a copy of, evidence in support of its opposition. That evidence consists of the declaration of Mr Kraa, who has had various roles within the opponent and within the NSW Department of Health over time. Mr Kraa has also lectured part-time at Sydney University and the University of NSW. He sets out his opinions on relevant matters, and his evidence also sets out correspondence that the opponent has sent to a company related to the applicant, concerning what he asserts to be a history of breaches of relevant statutory provisions since 2006.
The applicant elected not to file or serve evidence in answer to the opposition. Ultimately, s 55 of the Trade Marks Act 1955 (“the Act”) requires that the parties be given the opportunity to be heard. Both parties availed themselves of this opportunity and a hearing was scheduled for February 2009. By agreement between the parties, this was deferred until 25 May 2009 and the hearing relocated to Melbourne. At that hearing, the applicant was represented by Ed Heerey of counsel, instructed by Blake Dawson Waldron, solicitors, and the opponent by Christian Dimitriadis of counsel, instructed by Moray and Agnew, solicitors. Representatives of the instructing solicitors for both parties also attended the hearing.
Preliminary matter – extent of the onus
Both advocates made submissions on the extent of the burden of proof that they agreed was on the opponent. Mr Heerey argued that the opponent bears the onus of showing that the application should “clearly not be registered”. He respectfully suggested that I should reconsider the practice of the Trade Marks Office, which is that the opponent need only establish one or more of its grounds of opposition on the balance of probabilities. However, since the time of the hearing I have had the advantage of reading the decision of Sundberg J in Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891.
That matter was ex parte, unlike the present. In the present matter, I am required to note the terms of s 55, which reads:
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.
In Guylian, Sundberg J notes the view of Gyles J in Clinique Laboratories v Luxury Skincare Brands Pty Ltd [2003] FCA 1517; (2003) 61 IPR 130 at [132] and Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599 at [6]- [26]. Relevantly, Sundberg J notes:
In reliance on Lomas v Winton Shire Council [2002] FCAFC 413; (2003) AIPC 91-839, Guylian contends that the proper standard to be applied on an appeal under 35 of the Act in respect of a refusal to register is that the refusal should be upheld only if the Court is satisfied that the mark should clearly not be registered. Lomas was an appeal from a single judge’s decision to uphold an opposition to registration. At [17], the Full Court said:
No submissions were addressed to the Court concerning the standard to be applied by a single judge in considering an appeal under s 56 of the Act. The presence of s 195(2) [which imposes a leave requirement for appeals from a single judge decision] suggests that a parallel should be drawn with the scheme of appeals in opposition proceedings under the Patents Act 1990 (Cth). On that basis, on appeal under s 56, the Court should consider whether the trade mark should clearly not be registered. Only if so satisfied should the Court decide to uphold an opposition.
These observations have been followed in several first instance decisions, albeit with varying degrees of caution: see Bennett J in Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd [2003] FCA 901; (2003) 59 IPR 318 (Torpedoes) at [16]-[22], Finn J in Austereo [2004] FCA 968; 61 IPR 257 at [4]- [5] and Lander J in Kowa Company Ltd v NV Organon [2005] FCA 1282; (2005) 66 IPR 131 at [123]- [141]. In Austereo, Finn J considered that he ought “as a matter of comity” apply the Lomas standard as adopted by Bennett J in Torpedoes. In Kowa, Lander J expressed some doubt about the point but considered he was bound by Lomas and the Full Court decision in Woolworths [1999] FCAFC 1020; 93 FCR 365.
Gyles J has on two occasions expressed a different view: see Clinique Laboratories v Luxury Skincare Brands Pty Ltd [2003] FCA 1517; (2003) 61 IPR 130 at [132] and Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599 at [6]- [26] (Pfizer). His Honour considered the higher Lomas standard in some detail in Pfizer. After an exhaustive review of the authorities, and noting that the observations in Lomas itself were “plainly obiter dicta without the benefit of argument”, his Honour stated at [21]:
The fundamental difficulty with [the respondent’s] argument is that it is inconsistent with the language of s 55. Whether a ground of opposition has been “established” is a conventional concept requiring no particular elucidation. In my opinion, there is no basis upon which the section can be read as “the extent (if any) to which any ground on which the application was opposed has been clearly established”, particularly where that implication changes the practical operation of the section by imposing a special high onus of proof. It is also worth noting that the construction favoured in Torpedoes is not rooted in the words of the section at all. The precise finding in that case was that the opposition “should be upheld only if the court is satisfied that the trade mark should clearly not be registered”: at [22]. With all respect, that test is not to be found in the statute. I cannot find anything in the structure or content of other provisions of the 1995 Act that would point to reading s 55 other than according to its ordinary meaning.
Later, his Honour said at [22]:
In my opinion, borrowing further from the field of patents in this respect is impermissible, to adopt the word used by Finkelstein J [in BP Plc v Woolworths Ltd [2004] FCA 1362; (2004) 62 IPR 545]. Trade marks and patents are different species of intellectual property and have a different history. A general desire for uniformity cannot control construction of the statute governing each.
...
[26] 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.
Sundberg J goes on to acknowledge that there are real problems in applying the obiter remarks of Lomas in an ex parte matter. However, I think that the tenor of his comments in support of the view of Gyles J also leans heavily against any possible change of practice under s 55. That being so, I will follow existing practice and need decide only if the opponent has established any ground of opposition on a balance of probabilities.
Grounds of opposition
The opponent’s notices of opposition nominated three grounds of opposition to the registration of each trade mark. However, at the hearing, Mr Dimitriadis advised that the opponent would not pursue the ground of opposition based on s 41 of the Act. Of the remaining two, s 42(b) (“contrary to law”) is the primary ground on which the opponent relies. The related issues that arise under s 43 were, he said, entirely consistent with the s 42(b) ground.
At the outset, Mr Dimitriadis conceded that the opponent needed to establish if, in terms of Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd (2001) 52 IPR 24, the use of the applicant’s trade marks “would (not could) be contrary to law”. He conceded, however, that the opponent alleges a breach of a code for which criminal penalties apply. Accordingly, as per Briginshaw v Briginshaw[1], he argued that, while the standard that I must apply is a test as to the balance of probabilities, I must test the balance with an awareness of the adverse consequences for the applicant that may flow from of my finding in favour of the opponent. He accepted that the gravity of the propositions put by the opponent needs to be taken into account, but reiterated that, even so, the opponent need not make its case before me in terms of the criminal standard (“beyond reasonable doubt”).
[1] (1938) 60 CLR 336 at 362
At the heart of this question is the Food Standards Code developed pursuant to the Food Standards Australia New Zealand Act1991 (Cth). The Code contains a series of standards that apply to various aspects of food production and labeling. The standards are given the force of law in New South Wales by s 21 of the Food Act. Corresponding provisions exist in other States and Territories. Section 21(3) of the Food Act provides that a person "must not sell or advertise for sale any food that is packaged or labeled in a manner that contravenes a provision of the Food Standards Code” (“the Code”).
Those provisions include Standard l.lA.2, entitled "Health Claims", which prohibits certain kinds of claims being made on the labels of food products. Specifically, clauses 3(a), (b) and (c) of Standard l.lA.2 provide:
(3) (a) Save where otherwise expressly prescribed by this Code, any label on or attached to a package containing or any advertisement for food shall not include a claim for therapeutic or prophylactic action or a claim described by words of similar import.
(b) Any label on or attached to a package containing or an advertisement for a food shall not include the word 'health' or any word or words of similar import as a part of or in conjunction with the name of the food.
(c) Save where otherwise expressly prescribed by this Code, any label on or attached to a package containing or any advertisement for food shall not contain any word, statement, claim, express or implied, or design that directly or by implication could be interpreted as advice of a medical nature from any person.
It is common ground that there is no other relevant provision in the Code. Mr Dimitriadis addressed each of these paragraphs in turn but, having set out the law at issue, there is a procedural matter which can now be conveniently dealt with.
Applicant’s request for permission to rely on further evidence – refused
As I have already said, this matter was first listed for hearing in February 2009. In the approach to the rescheduled hearing, I gave directions for a staged exchange of written submissions. The opponent complied on 11 May, following which the applicant complied on 18 May, with the hearing listed for 25 May. I found it somewhat surprising, accordingly, that the applicant found it necessary, late on 21 May, to seek my permission to introduce further evidence.
This further evidence consists of a declaration by Ms Findlay, the applicant’s solicitor, to which are annexed:
(a) a copy of a letter from the New South Wales Department of Health (NSW Health) Food Branch to the Australia New Zealand Food Authority (ANZFA) (received 16 November 1999) (Exhibit BJF-1);
(b) a copy of a Preliminary Assessment Report dated 12 January 2000 by the ANZFA regarding an application by NSW Health to amend Standard A1(19) (now Standard 1.1.A.2) of Code (Exhibit BJF-2);
(c) a schedule setting out all Australian trade mark registrations and accepted applications that include the word "heart" or variants thereof in respect of food products, which were applied for after the decision of Madgwick J in Advantage Rent-A-Car v Advantage Car Rental Pty Ltd
In brief, items (a) and (b) show that the opponent, while asserting to me that the grounds of opposition on which it now relies are clear and readily supportable, was at one time of the view that the legislation in question was ambiguous and in need of amendment.
The only explanation for why the applicant did not seek to introduce this material at any earlier stage is that it was part of an old matter on which Ms Findlay worked (presumably on the applicant’s behalf) in 1999 and 2000. Ms Findlay was responsible for the filing of the presently-opposed applications but, after the filing of the notices of opposition, her partner, Peter Chalk, had carriage of the matter from August 2007 until he went on leave on 12 May 2009, the day after the opponent’s summary of argument was served on his firm. Ms Findlay, for her part, had gone on maternity leave on 30 April 2008, returning on 4 May 2009. At the hearing, Ms Findlay tabled another declaration, this one setting out the circumstances to which I have just referred. However, her conclusion, that “this evidence could not have been obtained earlier” simply because its existence was unknown to anyone else within her firm, is untenable. Her later declaration documents the immediate cause of the failure to introduce the evidence at an appropriate time but does not adequately explain it. At the hearing, I therefore heard the applicant on why it should now be allowed to rely on this material, the introduction of which the opponent also disputed.
As I said at the hearing, the material would quite possibly be of use to me in deciding the opposition, since it is potentially a helpful insight to see an opponent blowing simultaneously hot and cold over its grounds of opposition. However, I had no hesitation in denying the applicant the permission it sought. As I also said at the hearing, there is no damage to the public interest through the failure of an application, either in general or particularly where, as here, it may come about because of an applicant’s failure to respond to opposition proceedings in a timely way. The applicant had, firstly, waived its opportunity to introduce this material as evidence in answer to the opposition, and then failed to raise its existence even when the matter was first listed for hearing in February this year. I have no sympathy at all with its present situation. The worst that would ordinarily happen in such a case is that (if the opposition succeeds) the applicant may be forced to reapply, should it be minded to do so.
As has been noted in Studio SrL v Buying Systems Australia Pty Ltd, (1991) 22 IPR 580, and in Shanahan’s Australian Law of Trade Marks and Passing Off, 4th Edn at 15.2020, it is not a good thing to refuse a party permission to bring in relevant, credible evidence and thereby potentially encourage that party to consider an appeal to the Federal Court. However, I should be equally mindful of not encouraging parties to rely on this, when before the Registrar of Trade Marks, as a means to enable the tardy, and particularly a tardy applicant, to put right their protracted failure to protect their own interests. I was, at the time, yet to make my own decision in the substantive matter but there was some reason to hope that I could reach a correct conclusion without this evidence. If, at the end, my decision is to refuse registration and the applicant opts to appeal, and if the further evidence is as significant as the applicant would have it, the opponent will at least be aware of the further evidence when deciding if it wishes to contest the appeal. A proper balance of the interests involved therefore required me to proceed without the further evidence, and to attempt to reach a correct decision despite any potential pitfalls. I return, accordingly, to a consideration of the matter in terms of Mr Dimitriadis’ submissions, taking each paragraph in turn.
Primary ground of opposition – contrary to law - considered
Mr Dimitriadis argued the matter on the basis that all three applications stand or fall primarily on my analysis of the key words HEART ACTIVE[2]. As he put it in his written submissions, in application 1159682 the device element actually enhances the message he said was conveyed by the words HEART ACTIVE. At the hearing, he suggested that the presence of the word PURA in application 1159684 would change the context in which the words HEART ACTIVE were to be seen, perhaps suggesting that the latter words had a different function from the element PURA.
[2] Strictly speaking, those words are rendered as variations on HeartActive. It may be that this quirk of rendition would assist the applicant by emphasising the potential trade mark function of the sign in question. However, for convenience, and since it does not affect the outcome, I will refer to the element as I have just done.
Paragraph 3(a) of the Code, to which Mr Dimitriadis first turned, stipulates:
Save where otherwise expressly prescribed by this Code, any label on or attached to a package containing or any advertisement for food shall not include a claim for therapeutic or prophylactic action or a claim described by words of similar import.
I do not read the above reference to “a claim described by words of similar import” as broadening the scope of “claim for therapeutic or prophylactic action” to any significant degree. If the trade marks include neither a claim for prophylactic action nor for therapeutic action, and make no claim to an action that may be described by words that mean either of those things, the trade marks are is not caught by this paragraph. Mr Dimitriadis argued, accordingly, that the words HEART ACTIVE convey a claim for prophylactic action. The term "prophylactic" is not defined in the Code but both parties agree that I can safely rely on the definition from the Macquarie Concise Dictionary (Fourth Edition, 2006) with respect to the adjectival use of the word as follows: “Defending or protecting from a disease, as a drug.” Mr Dimitriadis said the words HEART ACTIVE clearly convey such a claim in the present context because they suggest that the consumption of the relevant goods will have a prophylactic action in defending or protecting consumers from heart disease and illness. He stressed, in oral submissions, that the claim need not be of the form, “this is a prophylactic drug”. It was sufficient if the end result was that a claim that the product would have such an effect was made.
As I understand Mr Dimitriadis, the making of a claim is a matter of context. I agree with him. However, he suggested that the words HEART ACTIVE - and the device present in 1159682 - are directed to convey the meaning or impression of heart health. I cannot accept this argument. Clearly, the words are not unsuggestive. My own view, however, is that they go no further than having a vague suggestion of some sort of general goodness about them. “Heart” means something to do with heart, obviously, and “active” means active, but beyond this I cannot agree with him. The words have an emotive appeal, but I do not find that this action is within the ambit of paragraph 3(a). As Mr Heerey pointed out for the applicant, paragraph (a), unlike paragraph (c), does not extend to “implied claims”. Again, as he argued, I should not make the mistake of assuming that words suggesting something may be good for one’s health are necessarily a claim for a prophylactic action. The hazily favourable implications conveyed by the trade marks are, at most, that the goods in question may promote health or healthiness. The words HEART ACTIVE do not, however, convey a claim to prophylactic action. This is unchanged by combination with the other elements present in applications 1159682 and 1159684.
Paragraph 3(b) of the Code reads as follows:
Any label on or attached to a package containing or an advertisement for a food shall not include the word 'health' or any word or words of similar import as a part of or in conjunction with the name of the food.
The provision is directed to words used “as a part of or in conjunction with” the name of a food, in this case “milk” etc as specified in the applications. Mr Heerey argued at the hearing that the sign in question is proposed for use as a trade mark, not as a name of a food but, as Mr Dimitriadis countered, the relevant trade mark would be used “in conjunction with” the name of the food.
Mr Dimitriadis argued that the words HEART ACTIVE, in the present context, imply that an "active" heart is good for one's health. It was clear, he argued, that the adoption of the word "active" was an attempt to create a link or association, in the minds of consumers, between the consumption of the relevant goods, on the one hand, and the facilitation of physical exercise and an active or physical lifestyle. Again, he argued that the “message” was emphasised in the case of application 1159682 by the combination of the devices of the heart and curving arrow.
Mr Dimitriadis conceded that this is not the opponent’s strongest case and I do not think it is a viable argument. I am not satisfied that the trade marks in question would have the function proscribed by paragraph 3(b), that is, indicating an association with an active lifestyle to an extent having a similar import to the word “health”.
Paragraph 3(c) of the Code is as follows:
Save where otherwise expressly prescribed by this Code, any label on or attached to a package containing or any advertisement for food shall not contain any word, statement, claim, express or implied, or design that directly or by implication could be interpreted as advice of a medical nature from any person.
Clearly, this provision, unlike 3(a) or 3(b), includes both express and implied claims. The ultimate question, Mr Dimitriadis said, was not whether the words were advice of a medical nature so much as “could they be so interpreted by consumers?” All that he needed to establish, he argued, was that the trade marks had the capacity to be so interpreted. He noted evidence given by Mr Kraa on behalf of the opponent to the effect that exercise is good for the health. He invited me to find that the words, in effect, indicate that the goods would have a beneficial health effect by lowering risks to heart health. While I agree with him that implied claims are within the scope of the paragraph, I think it would be fanciful of me to go further. The perceptions of people in the main are not always easy to assess or predict, and the language of Advantage Rent-A-Car, supra, adds an overlay to the matter. None the less, as I said in relation to paragraph (a), my own view is that the words imply something non-specific and by no means readily understood. Accordingly, I am not satisfied that the trade marks would be interpreted as medical advice, either express or implicit.
Finally, Mr Dimitriadis cautioned me not to read anything into what appears to be a long-standing failure of the opponent to prosecute the applicant for its alleged breaches of the code. It was, he said, a serious matter to undertake such an action and I was not entitled to speculate as to why the opponent may not have done so. It would unnecessarily draw this matter out for me to explore such issues here. Ultimately, Mr Dimitriadis put the matter to me in simpler terms: was the applicant’s proposed use of the trade marks, as at the filing date of the applications, a use contrary to the Code, or was it not? I accept that this is the correct approach, subject to the other elements of the analysis to which I have referred above. In following that approach, I stress that I have not given significant weight either to the opinions of Mr Kraa on the relevant issues or to his agency’s failure to act on those opinions.
Remaining grounds
Mr Dimitriadis submitted that the arguments set out above, with suitable adjustment to the principles in question, would also establish a breach of s 43 of the Act or of the Trade Practices Act 1974. I think that the terms of s 43 of the Act are sufficiently broad as to subsume any suggestion that the trade marks might be misleading or deceptive in terms of the Trade Practices Act. Mr Dimitriadis did not argue otherwise. I turn therefore to the terms of s 43 of the Act:
An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.
It will be clear, from my comments above, that I find the trade marks convey a vague and non-specific message. I note Mr Kraa’s declaration shows that the applicant uses a trade mark incorporating the elements of application 1195682 in respect of 99% fat-free milk. On such goods, I do not believe that the usage of the applied-for trade marks would give rise to any significant level of confusion. Nor does the evidence show that notional fair usage on other goods covered by the applications would do so. Accordingly, the remaining grounds of opposition are not established.
Conclusion
The trade mark applications may proceed to registration one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until either the appeal is withdrawn or a court so orders. I award costs against the opponent at the official scale in the regulations. Costs on the second and third oppositions are to be taxed as per James Hardie & Co Pty Ltd v Hume Industries (Malaysia) (2001) 53 IPR 591. However, the costs in respect of the time taken in hearing the matter are to be reduced by 15 minutes by way of allowance for the application for permission to bring in further evidence.
Terry Williams
Hearing Officer
Trade Marks Hearings
25 August 2009
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