NV Sumatra Tobacco Trading Company v Philip Morris Products Inc

[1998] ATMO 69

TRADE MARKS ACT 1995

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

Re:Opposition by PHILIP MORRIS PRODUCTS INC. to registration of trade mark application number 642151 in the name of NV SUMATRA TOBACCO

TRADING COMPANY

Background

On 4 October 1994, NV Sumatra Tobacco Trading Company (the applicant) filed an application number 642151 for registration of the trade mark shown below

 

The applicant sought registration of the mark in class 34 in respect of a statement of goods reading:

"Cigarettes, matches, smokers' articles in this class, ashtrays in this class, cigarette papers, cigarette filters, tobacco, cigarette lighters, cigars".

Acceptance of the mark was advertised in the Australian Official Journal of Trade Marks of 13 June 1996.  Registration of the mark, under the provisions of section 52 of the Act, was opposed by Philip Morris Products Inc (the opponent) by filing a notice of opposition on 13 September 1996.  The three evidence stages of opposition, in terms of regulations 5.7 to 5.12, were completed by 15 June 1998.

The opponent requested a hearing on the opposition matter, which was held in Canberra.  Mr Stephen Burley of Counsel, instructed by Spruson & Ferguson of Sydney, represented the opponent while Mr Barry Hess, also of Counsel, instructed by Collison & Co of Adelaide, appeared for the applicant.

Evidence
The evidence in support comprises two statutory declarations.  Robert J. Eck, attorney-in-fact of the opponent company, who has been associated with the company since 1980, provides a short history of use of the opponent's trade marks in Australia, unit volume sales figures of cigarettes for five years from 1991 to 1995 and annual advertising expenditure for those goods during the corresponding period.  In addition, Mr Eck shows world-wide unit volume sales figures for cigarettes extending over forty years and selective lists of jurisdictions where the opponent's marks are registered, as well as copy of an article from the Financial World Magazine, reporting that the MARLBORO trade mark has been ranked as the most valuable trade mark in the world.  He expresses the opinion that, in designing the subject mark, the applicant had misappropriated many of the graphics elements from the opponent's marks and, in comparing the construction and placement of those elements in the marks, he concludes that the similarities between the marks are so close as to defy coincidence. 

The second declarant, Thomas R. Riedel, has had twenty-six years experience with packaging and corporate identity design.  He states his professional opinion as to the similarity between the opponent's marks and the mark of this application, suggesting that the applicant has imitated the range of the opponent's MARLBORO packets with the intention "to pass off HERO as a member of the Marlboro family of packs".     

In the first of the three declarations which constitute evidence in answer, Timin Bingei, the director of the applicant company, refers to copies of certificates of registration of the applicant's mark in France and Indonesia, a number of transport bills of lading in relation to shipments of the goods under the mark in parts of South-east Asia and samples of advertising material, all annexed to his declaration.  There is no indication that any of the advertising material was available in Australia.  Mr Alun William Thomas exhibits copies of the front of three cigarette packets and a copy of a table showing cigarette market share in Australia by brand and manufacturer, which indicates that in 1994 cigarettes under MARLBORO marks had 1.9% of market share compared with the leading brand, WINFIELD, holding 18.5% share.  With reference to Mr Thomas's market share exhibit, Doreen Perrin has attached to her declaration a copy of a cigarette package. 

The evidence in reply consists of a statutory declaration by Siabon Seet of Spruson & Ferguson, the opponent's attorneys, who compares the face of four cigarette packets, other than the applicant's, with the front of MARLBORO packet, setting out in detail perceived differences between the design on these packets.  Copies of the faces of these packets accompany her declaration. 

Grounds of opposition
The notice of opposition contains nine grounds of opposition, which, at the hearing, were condensed to the following:

¨that the opposed trade mark is substantially identical with or deceptively similar to the opponent's trade marks - section 44

¨that, because of some connotation or a sign contained in the opposed trade mark, use of that trade mark would be likely to deceive or cause confusion - section 43

¨that the opposed trade mark is deceptively similar to a trade marks that have acquired a reputation - section 60

¨that the opposed trade mark contains a false geographical identification - section 61

¨that use of the opposed trade mark would be contrary to law - section 42.

I propose to consider both parties' aural submissions made at the hearing, together with the written outline of those  submissions tendered at the hearing, and discuss the above grounds each one in turn. 

Submissions and analysis

The opposed trade mark is substantially identical with or deceptively similar to the opponent's trade marks

The provisions relating to this ground of opposition are:

44.(1)  Subject to subsection (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.

The term "deceptively similar" under the Act is defined in section 10: "… a mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion".

In the evidence and submissions, the opponent has mentioned a number of its trade marks registered prior to the date of the present application in respect of the same or similar goods to those covered in the applicant's statement of goods.  The first of these marks was registered in Australia in 1957, under number 126011, in respect of cigarettes and is shown here:

 

Since then the opponent has registered other marks carrying only slight alterations on the front of the packaging.  All those marks, in Mr Burley's view, possess three main features: what was described by him and in the opponent's evidence as "the roof top" device, the crest or coat of arms, and an "endless belt" or lozenge.  In particular, my attention was directed to the mark of registration 336136, where these three features virtually comprise the whole mark. 
The representation of this mark is as follows:

 

Noting that the issue under subsection 44(1) is the same as under section 33 of the Trade Marks Act 1955, Mr Burley referred to the test in Johnson & Johnson v Kalnin 26 IPR 435, at 438, and Companhia Souza Cruz Industria E Comercio v Rothmans Pall Mall (Aust) Ltd (1998) AIPC 91-426, that test being that there must be no reasonable likelihood of deception and confusion amongst a substantial number of persons if the applicant uses its mark normally and fairly in respect of the goods covered by its proposed registration. Applying the principles of determining substantially identical or deceptively similar marks as expounded in Shell Company (Aust) Limited v Esso Standard Oil (Aust) Limited (1961) 109 CLR 407, at 414-415, and in Australian Woollen Mills Limited v FS Walton & Company Limited (1937) 58 CLR 641, at 658, Mr Burley came to the conclusion that the marks were deceptively similar. He submitted that the visual impact of the applicant's mark was clearly similar to the opponent's marks. Here he focused on what he regarded as three prominent features appearing in the opponent's marks which, he said, with only minor variations, such as the roof top device being inverted, had also been included in the applicant's mark. Mr Burley submitted that the word HERO could have some effect on the potential purchaser, but he reminded me of the existence of the opponent's registered mark which did not display the word MARLBORO. For support, Mr Burley referred to the statements in the declarations of Messrs Eck and Riedel. In comparing the subject mark with the opponent's marks, these deponents set out close similarities between the features that are in common in the marks, emphasizing the significance of the roof top device, which, they maintain, has achieved a world-wide recognition identifying the MARLBORO brand products. They suggest that the applicant might have copied the elements that are unique to the MARLBORO packets so as to represent its product as emanating from the opponent.

As observed by Mr Burley, in considering whether the marks are substantially identical, Windeyer J stated in Shell v Esso case, supra, at 415:

…. [the marks] should be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.

Viewing the marks in this manner, it seems obvious that, apart from the coat of arms and the endless belt devices, which in themselves are not identical, the total visual appearance of the marks is far from similar.  

On deceptive similarity between the marks, one should consider the marks in light of the criteria outlined by Dixon and McTiernan JJ in Australian Woollen Mills v Walton, supra, at 658, that:

… 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.

Their Honours have indicated that consideration should also be given to the kind of person who would be selecting the goods and the manner in which the goods are made available for purchase.   

It cannot be denied that the construction and location of the coat of arms and the endless belt devices in the marks in question bear resemblance.  The former in each mark essentially comprises two rampant beasts on either side of a shield device on top of which is placed a crown, with a scroll underneath the animals and the shield.  Absent from the applicant's coat of arms are the letters and words PM INC and the Latin phrase VENI VIDI VICI which, being an integral part of the coat of arms, are not conspicuous.  The endless belt device is included in the top portion of the marks under consideration.  However, in my assessment, the similarities end there.  In any event, I do not think these two elements in the marks would be regarded by the customers as particularly significant or prominent.  It has been generally recognized, and from my knowledge of trade marks entered on the Register in respect of goods in class 34 I can confirm it to be so, that a crest or coat of arms is a device widely adopted by other manufacturers for inclusion in marks in respect of tobacco products.  As revealed in both the opponent's and applicant's evidence, when the marks are in use, the endless belt device or lozenge appears to be occupied by descriptive, non-trade mark matter thus diminishing its visual impact.  The words which are prominently rendered in the marks, HERO and MARLBORO respectively, differ from each other visually, aurally, as well as conceptually, each conveying an understood meaning, given that the latter is the phonetic equivalent of the word "Marlborough".  There remains then the question of deciding whether the elements in the geometric design in each of the marks is so dominant as to impress the memory of potential purchasers and serve the purpose of being employed as a tool for selecting the goods, being mindful of the fact that the house mark MARLBORO is not always included in the opponent's marks, as is the case in the mark of registration 336136.  

In the opponent's marks, the device located on the upper portion of the marks consists of two diagonal lines meeting in an apex which points upwards and creates what, at a cursory glance, could be taken for a snow-covered mountain peak but, in fact, represents a roof top device, as named by the opponent.  On the other hand, the dark shape occupying a large lower portion of the applicant's mark constitutes a different concept of what could be seen as a triangle inverted in a square, or two diagonal lines sloping downwards to create a "V" shape.  The exhibits of Mr Thomas and Ms Perrin in the applicant's evidence in answer demonstrate that the applicant's mark is not the only one incorporating this kind of device, but that similar geometric designs feature in the lower half of cigarette packets produced by other manufacturers, such as are used on the brands of WINFIELD, VISCOUNT, 555 STATE EXPRESS and COMMODORE.  This suggests that persons interested in the product would take more care in endeavouring to commit to their memory other existing distinguishing features in the marks.  I note that in Ms Seet's careful analysis of these marks and the opponent's MARLBORO mark, where she draws dissimilarities between the marks, observing that the overall get up of the applicant's mark and the MARLBORO pack, to which Messrs Eck and Riedel had referred, contained similar elements which were absent from the four previously mentioned packs, she has relied on a meticulous side by side comparison of the marks, which does not assist in determining which features in the marks are likely to impress one.  Ms Seet also makes reference to the fact that the present application is not subject to any colour endorsement and therefore the applicant could well display on its cigarette packet a colour scheme associated with the opponent's marks; i.e. a red dark field and white light field with the brand name appearing in black lettering.  To this I would comment that registration of the opponent's marks does not appear to be restricted to those particular colours; indeed, the opponent's own evidence shows other colour combinations on its cigarette packets.  Further, throughout the submissions, the opponent has concentrated on the special significance and extensive recognition of the rooftop device in the MARLBORO marks, but no evidence supports the contention that it would leave such an impression in one's mind that the opponent's products would be remembered and selected solely on the basis of the purchasers' recognition of that device, rather than by any other feature or the general effect created by the entire composition of the mark.       

I am in full agreement with the submissions of Mr Hess that, with the exception of obtaining cigarettes from vending machines, such goods are not self-serve items, but are purchased by the customer nominating the particular brand of his or her choice to a sales person at the counter.  Cigarettes are purchased with care either from a vending machine or by requesting the product from the shop assistant.  It is common knowledge, as pointed out by Mr Hess, that a cigarette brand is the all important differentiator in the consumer marketplace.  And, once smokers of cigarettes have chosen a particular brand that satisfies them, they readily recognize that brand and tend to remain loyal to it.  There is no indication in the evidence that the opponent's cigarettes bearing the mark without the word MARLBORO would be identified by any design in the mark.  It is also of some significance that Mr Eck in his declaration tends to refer to the opponent's marks as the "MARLBORO Label".   It seems to me more likely that, in view of the renown of the opponent's roof top device, that device would be associated with the opponent and the cigarettes selected by the verbal description "Marlboro".  Where the word MARLBORO is absent from the opponent's marks, given that the coat of arms device occurs frequently on other cigarette packets, customers would be more conscious of the exact positioning of the distinguishing element between the marks - the recognized roof top device.  In these circumstances and taking into account the other factors I have discussed previously, I do not attribute to the principle of "imperfect recollection" - Rysta Ltd's Appn (1943) 60 RPC 87 - the same significance stressed by Mr Burley as being one of the major reason for likely confusion of the marks.

Having regard to my foregoing comments, I find the marks to be neither substantially identical nor deceptively similar.  Accordingly, the applicant's mark does not offend against the provisions of section 44 of the Act.

The use of the applicant's trade mark would be likely to deceive or cause confusion because it contains some connotation or a sign

The relevant provisions covering this ground read:

43.  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.

In relation to this provision, Mr Burley submitted that it involved the following two features: that use of the applicant's mark was likely to cause confusion bearing in mind the similarities between the applicant's and opponent's marks, and that a deceptive reference was included in the opposed mark as to origin of the tobacco in the cigarettes.

Dealing with the first point, he said that the relevant test had been repeated recently by Beaumont J in Melhero Pty and Another v Club X and Others 37 IPR 151, by paraphrasing, at 199, the well known words of Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 595, at 595, that a mark is likely to deceive if the result of the user of the mark would cause a number of persons to "wonder" whether the two products may have come from the same source. If one were to regard the word HERO in the applicant's mark as potentially something which would distinguish the applicant's goods, given the opponent's registered mark 336136 without the house mark MARLBORO, the question remained whether or not a person who saw the applicant's mark depicted in the opponent's colours, red and white, would believe that the two products shared the same origin, Mr Burley submitted.

In viewing a mark in terms of section 43, Mr Burley said that an evaluation must be made of the material within the trade mark.  However, he directed my attention to the following statement in Southern Cross v Toowoomba Foundry, at 595:

In considering the probability of deception, all the surrounding circumstances have to be taken into consideration.  (This includes the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold, and the characters of the probable purchasers of the goods)….  The onus must be discharged by the applicant in respect of all goods coming within the specification in the application of the goods… in respect of which registration is desired, and not only in respect of those goods on which he is proposing to use the mark immediately … the test is, what can the applicant do if he obtains registration. 

In this regard, Mr Burley submitted, it was probable that the circumstances in which the goods of the applicant and the opponent were to be bought and sold would heighten the prospect of confusion between the allegedly conflicting marks.  Expanding on this statement, he said that cigarettes were sold at specialist outlets where a large range of brands could be acquired.  One manufacturer may produce a range of different brands of cigarettes, he added.  The visual similarities between the applicant's and the opponent's marks were such as to encourage buyers to make a connection between the manufacturers of both.  In normal circumstances of sale, Mr Burley said, the marks would be displayed in close proximity to each other with the likely result that a purchaser might be caused to wonder whether those goods originated from the same source.  

As to the second point, Mr Burley submitted that the words "USA BLEND CIGARETTES", being part of the applicant's mark, contained a connotation which was likely to deceive or cause confusion in the marketplace.  To a normal purchaser those words would indicate two things: first, that there was generally an "American" image associated with the goods bearing the mark; second, that the specific contents of the package were cigarettes made of blended tobacco from the United States of America.  These connotations, he asserted, could never be correct for most of the goods in respect of which the applicant desired to register its mark.  The suggestion that the goods came from the United States of America was a false one for goods which did not originate from there, he said, pointing out that the application was not confined to a specific origin of the goods.  In fact, Mr Burley contended, from the exhibits of advertisements of the applicant's product accompanying Mr Bingei's declaration, an inference could be drawn that the origin of the goods was likely to be Indonesia, alternatively, that there was a connection with the company Hudson Tobacco, London, England.  There was nothing in the evidence to link the product with America, or "U.S.A. Blend".  Mr Burley then cited Re The Registered Trade Mark "Yanx" (1951) 82 CLR 199, where the mark contained the word YANX, devices of stars and stripes and the words "Made in England". Despite the words "Made in England" being included in the mark, Mr Burley said, Williams J had considered that the label contained a connotation that the goods were from the United States of America and therefore, in the public interest, the mark should be expunged as a mark which would be likely to cause deception as to the origin of the goods.

In reply to Mr Burley's above submissions, Mr Hess said that a new theme had been injected in the opposition which was nowhere apparent in the opponent's evidence.  Since there was no material to indicate the source of the applicant's tobacco products, it should be assumed that the applicant will act according to the law in Australia.  Mr Hess contended that, in the opponent's submissions, it has been inferred that the applicant would somehow act unlawfully.  The words U.S.A. BLEND CIGARETTES could mean no more than cigarettes blended in accordance with some United States formulation technique.  He did not accept that those words would necessarily mean tobacco originating in the United States of America.  How the words would be interpreted by a "normal purchaser of goods" was clearly a matter for substantial evidence.

With reference to the first point argued by Mr Burley, I will not be able to place much weight on it, as it is the Registrar's understanding that the provisions of section 43 were intended to allow a ground of rejection concerning possible deception or confusion arising from the nature of the mark itself when applied to the goods or services.  The provisions exclude deception or confusion likely to be caused by a conflict between the marks.  This was set out in an appendix to a recent, as yet unpublished, Trade Marks Office decision Down to Earth (Victoria) Co-operative Society Limited v George Schmidt, issued 9 April 1998, where the hearing officer stated the following:

The provisions of this section as explained in:

• The Working Party's Recommended Changes to the Australian Trade Marks Legislation - a report to the Hon. Ross Free MP, Minister for Science and Technology, July 1992,

• The Explanatory Memorandum, circulated by the authority of the Minister for Small Business, Customs and Construction, Senator the Hon. Chris Schacht, and

• The Trade Marks Office Draft Manual of Practice and Procedure,

provide that an application for registration must be rejected if the trade mark, because of some signification inherent to it, would be likely to deceive or cause confusion because of its use on the relevant services [or goods].

As explained in the above Draft Manual of Practice and Procedure, connotations of the kind that would debar a trade mark from registration under the provisions of s.43 may result from the whole trade mark or a part thereof.  Grounds for rejection under s.43 are, however, absolute grounds in that the likely deception or confusion must arise from the trade mark itself.  The provision does not apply to deception or confusion that might arise from conflict between two trade marks. 

To consider whether the phrase U.S.A. BLEND expresses a certain connotation which is likely to deceive or cause confusion to persons of "ordinary intelligence" - Shell v Esso, supra, at 415 - I note the meaning of the noun "blend", inter alia, in Webster's Third New International Dictionary as "something produced by blending as a: a product (as whiskey, a flour, or a tobacco) prepared by blending".  The verb "blend" is defined, inter alia, as: "2: to prepare (as whiskey, flour, tobacco, or tea) by mixing and thoroughly intermingling different varieties or grades whether for purposes of adulteration or of standardization and improvement of qualities".  The word "blend" used in conjunction with tobacco products would therefore indicate a mixture of various types of tobacco varieties or grades to obtain a particular kind or quality.  Coupled with the abbreviation for the United States of America, U.S.A., I believe the word "blend" in the opposed mark could attract a number of different interpretations: (1) a mixture of tobacco originating from the United States, (2) a certain type of mixture containing different grades or varieties of tobacco, perhaps the tobacco from the United States of America predominating, (3) a mixture of tobacco which has received wide approval amongst smokers in the United States, or (4) a mixture made in accordance with a certain traditional style developed the United States.  I do not think the words U.S.A. BLEND CIGARETTES would only be seen in the context of cigarettes blended from tobacco grown in the United States of America.  Smokers, who normally select cigarettes for their special flavour and character, are more likely to perceive the words as conveying the other meanings. 

There are no other features in the applicant's mark which might denote the origin of the goods, such as the word "Yanx", a mis-spelling of "Yanks", which, in combination with the stars and stripes usually connected with the United States, in the cited "Yanx" case, supra, enhanced the impression created by those components in the mark that the goods might emanate from the United States of America.  Having regard to the meaning of the word "blend", as noted earlier, it could be inferred that the goods upon which the applicant's mark is applied are tobacco products, but, in my view, the words U.S.A. BLEND CIGARETTES in the mark do not convey a definite connotation which would be likely to deceive or cause confusion as to the origin of the goods in respect of which the applicant is seeking registration of its mark. 

I do not consider therefore that registration of the subject mark ought to be rejected for any of the goods in the application, pursuant to the provisions of section 43 of the Act.  

Whether the applicant's mark is deceptively similar to trade marks that had acquired a reputation in Australia

This ground of opposition relates to the provisions of section 60  which state:

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

(a)It is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had acquired a reputation in Australia; and

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

Concerning this ground, Mr Burley submitted that, unlike under sections 43 and 44 of the Act, the question here was based on hypothetical uses of the applicant's mark, taking into account the local as well as international reputation of the opponent's MARLBORO marks, noting that the protection of well-known marks was specifically intended by the Working Party to Review Trade Marks Legislation, as stated in Recommended Changes to the Australian Trade Marks Legislation, July 1992.  In that regard, he said, the extraordinary market penetration of the opponent's marks was an important feature, the evidence showing overwhelming sales of the goods, so much so that the opponent could rely on the general knowledge in recognition of the MARLBORO brand.  Further, he said, apparently deliberate reproduction of the major features of the MARLBORO marks in the applicant's mark, as claimed by Mr Riedel, demonstrated a recognition, on the part of the applicant, of the commercial importance of the opponent's marks.  In these circumstances, Mr Burley asserted, where the applicant had strained every nerve to take advantage of the opponent's reputation, there was a strong likelihood that the consumers would be deceived into perceiving a connection between the marks. 

There cannot be any question as to the reputation of cigarettes carrying the MARLBORO brand before the date of the present application, which is the relevant date for the purpose of section 60.  Mr Eck's declaration provides ample evidence as to the exceptionally impressive sales of the product worldwide.  Indeed, Mr Eck exhibits copy of an article in the Financial World of 25 June 1996, declaring the MARLBORO as "the world's most valuable brand".  "For the first time in three years, Marlboro ranks first ($44.6 billion), overtaking Coca-Cola ($43.4 billion)", according to the article, at 4-5.  Similarly, the sales value given by Mr Eck, together with the advertising expenditure, suggests significant popularity of the MARLBORO cigarettes in Australia.  Pursuant to paragraph (b) of section 60, however, it is necessary to establish that use of the applicant's mark would be likely to deceive or cause confusion because of the reputation acquired by these marks   No instances of deception or confusion have been evidenced.  I have already found that the degree of resemblance between the marks is not such as to render them deceptively similar, particularly considering the manner in which cigarettes are sold and the usually discerning consumers dealing with such products.  Mr Riedel suggests that in designing its mark the applicant had chosen similar features to those of the opponent's marks so as to confuse the prospective purchasers and trade off the MARLOBORO image.  To support such allegations, I think it would need to be shown by evidence that, having regard to the reputation of the MARLBORO trade marks, the potential customers would be caused to wonder whether the goods had a common origin, or whether there was a connection, in the course of trade, between the opponent and the applicant - Southern Cross v Toowoomba Foundry, supra. 

It follows that the opponent has not established a case in terms of section 60 of the Act. 

Whether the opposed mark contains a false geographical identification
Under this ground, the Mr Burley made similar submissions to those concerning the section 43 ground, that the words U.S.A. BLEND CIGARETTES unambiguously indicated the cigarettes to be made of blended tobacco from the United States of America.

Section 61 provides that:

61.(1)         The registration of a trade mark in respect of particular goods (relevant goods) may be opposed on the ground that the trade mark contains or consists of a sign that is a geographical indication for goods (designated goods) originating in:

(a)  a country, or in a region or locality in a country, other than the country in       

which the relevant goods originated; or

(b)  a region or locality in the country in which the relevant goods originated 
      other than the region or locality in which the relevant goods originated.

The term "geographical indication" is defined in section 6 as:

"geographical indication", in relation to goods originating in a particular country or in a region or locality of that country, means a sign recognised in that country as a sign indicating that the goods:
      (a)  originated in that country, region or locality; and
      (b)  have a quality, reputation or other characteristic attributable to their
            geographical origin.  

From this definition it appears that to substantiate this ground of opposition the opponent would need to show that the reputation of the sign as a geographical indication for the designated goods must be of some significance.  It would then fall on the applicant to rebut the opponent's claim as required under subsections 61(2) and (3).

As no evidence has been filed by the opponent in relation to this matter, the opponent cannot succeed on this ground. 

Would use of the applicant's mark be contrary to law?
It has been submitted by the opponent that the opposed mark should not be registered  because its use would be contrary to law in terms of section 42 of the Act.  This section reads as follows:

42.  An application for the registration of a trade mark must be rejected if:
         (a)   the trade mark contains or consists of scandalous matter; or
         (b)   its use would be contrary to law.

Mr Burley said that, bearing in mind the range of goods nominated in the application and the use to which the applicant would be able to put the mark, there was a substantial likelihood that the goods will not originate in the United States of America.  He submitted that there was nothing in the applicant's evidence to suggest that the origin of the goods was the United States; it was more likely to be Indonesia.  Further, most of the goods for which registration is sought could not be "U.S.A. Blend Cigarettes", Mr Burley stressed.  The incorporation of these words into the applicant's mark meant contravention of section 53(eb) of the Trade Practices Act, 1974 and would amount to an illegality which was inherent in the mark itself within the test referred to in Arthur Fairest Limited's Application (1951) 68 RPC 197, at 208 and 209. It was inherent in the mark that the goods would be misdescribed, whereas in the cited case the conduct of the applicant company had been in breach of the Betting and Lotteries Act, he said.  He directed my attention to the words of Lloyd-Jacob J, at 209:

Although I have no reason whatever to suppose that the acceptance of this application would provide any cover of legality to what is otherwise an illegal operation, I must consider whether the right to represent upon any literature of the Applicant Company that they have a registered trade mark may lead to the belief in some persons to whom these documents may come that judicial approval has been given to the distribution of this literature.

Mr Burley introduced a further point arising from another legislative prohibition concerning application of the Tobacco Advertising Prohibition Act 1992 to the subject mark.   That Act, he said, prohibited advertising making use of, amongst other things, a trade mark of a cigarette manufacturer.  The definition of an advertisement was broad enough to cover goods which are not cigarettes.  In relation to these points Mr Burley referred to sections 9, 10 and 15 of that Act.  He said that the exceptions provided in sections 16 to 20 did not allow the defences which would be necessary to salvage the applicant's goods from contravening the Act, bearing in mind the potential uses which may be made under registration of the mark.

In reply, Mr Hess said that the opponent had expressed the assumption that, firstly, the words "U.S.A. Blend Cigarettes" had a definite meaning and secondly, if those words did have that meaning, the applicant would not produce products in accordance with that meaning.  The applicant did not accept the former, but, in any event, there was no evidence that the applicant would not be marketing the goods in compliance with Australian law.  He said that the opponent's submissions based on the misleading representation under the Trade Practices Act was all conjectural.  The advertisements annexed to Mr Bingei's declaration, Mr Hess said, dealt with information in South-east Asia.  So far as the mark covered goods such as matches and others, it was exclusionary in the sense that, once it was registered and thereafter, it would prevent other people from applying the mark to those goods.  He further stated that common sense would prevail and that, if the applicant's goods, for example, cigarette lighters, filters or papers were put in the marketplace, it was unlikely that the words "U.S.A. Blend Cigarettes" would be used to describe the character of the goods, but that the mark itself may serve as a promotional item. 

Concerning the Tobacco Advertising Prohibition Act, there was no indication that the applicant in any way will be contravening this statute, Mr Hess said. To the extent the applicant used the mark on goods which were caught by that Act, that was a matter to be dealt with under that Act, but did not concern my consideration of the present application.

Discussing the opponent's submissions in relation to the section 43 ground, I indicated that I did not think the phrase "U.S.A. Blend Cigarettes" was confined to only one interpretation.  In any event, even if those words did solely suggest the origin of the goods, there is no evidence that the tobacco used in the applicant's products is not in fact sourced from the United States of America, even though the manufacturer of the cigarettes is an Indonesian company.  As to the question whether use of the words "U.S.A. Blend Cigarettes" in the applicant's mark would be in breach of the Trade Practices Act, that is a matter outside the Registrar's jurisdiction.

I have been presented with submissions concerning alleged contravention of the Tobacco Advertising Prohibition Act 1992. Here again the Registrar has been asked to determine something which is not within his competence, hence I am not in a position to decide whether the applicant's mark offends against that Act. 

Having regard to these comments, the issues relating to the section 42 ground as it was delivered by the opponent are more appropriate for decisions elsewhere than in the present forum.  

Conclusion
I have decided that the opponent has not been successful in relation to any of the grounds upon which it focused its submissions.  Therefore, subject to any appeal from this decision, I direct that the mark of application 642151 should proceed to registration. 

Both parties have claimed costs.  I can see no reason why costs in the matter should not follow the result.  Accordingly, I order that the opponent pay the applicant's costs, in accordance with the official scale.

Vija Zars
Hearing Officer

30 December 1998