Nylex Corporation Pty Ltd v Nylacast Limited

[2004] ATMO 65

TRADE MARKS ACT 1995

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

Re:Opposition by Nylex Corporation Pty Ltd to registration of trade mark application 759041(17) - NYLACAST - filed in the name of Nylacast Limited.

Delegate:	Mary Skivington
Decision:	Section 52 opposition – grounds of opposition under sections 58 and 60 – grounds not established –ground of opposition under section 44 partially established - provisions of subsection 44 (3) apply in respect of some goods.

Background

1. Nylacast Limited, (‘the applicant’), a British company of Leicester, in England, filed trade mark application number 759041 to register the trade mark NYLACAST, on 3 April 1998, for the following  goods in class 17:

   Polymers; polymer materials; plastics materials, lubricant-filled polymer and plastics materials; semi-finished articles made from the aforesaid goods; cast nylon, self-lubricating cast nylon and lubricated cast nylon.

2. In due course the application was examined and a report issued raising grounds for rejection under the provisions of section 44 of the Trade Marks Act 1995, (‘the Act’). Following submissions from the applicant’s attorneys, Ahearns, these were withdrawn and the application was accepted. Acceptance was advertised in the Australian Official Journal of Trade Marks on 16 March 2000.

3. Nylex Corporation Pty Ltd, (‘the opponent’), filed notice of opposition on 16 June 2000, citing all the available grounds of opposition under section 52 of the Act. For its ground of opposition under the provisions of section 44 it relied on eleven of its registered trade marks, all of which have earlier priority dates than the subject application and six of which had been cited by the examiner in her first report on the application.

4. The respective parties filed and served their evidence in support and in answer. The opponent did not file evidence in reply. As neither party applied to be heard, I am to decide the matter, as a delegate of the Registrar of Trade Marks, on the basis of the written record.

   The evidence

5. The evidence comprises the four statutory declarations with exhibits as follows:

   Evidence in support

Date	Declarant	Exhibits
12 December 2001	Russell William Rayner, Managing Director of Polynyl Plastics (Aust) Pty Ltd trading as Nylocast Plastics Co.	RWR-1-RWR-4
12 December 2001	Michael Peter Squires, of Phillips Ormonde & Fitzpatrick, Patent and Trade Mark Attorneys.	MPS-1 – MPS-4
12 December 2001	Anthony Michael Hurd, Sales and Marketing Director of Nylex Corporation Pty Ltd.	AMH-1

Evidence in answer

Date	Declarant	Exhibits
9 June 2003	Mussa Mahomed, Managing Director of the Components Division of Nylacast Limited.	MM1 – MM7

Evidence in support
Russell William Rayner

1. Mr Rayner declares that he has been Managing Director of his company since 13 April 1988 when he purchased the business and goodwill from Nylocast Engineering Co Pty Ltd. He declares that his predecessors in the business had been trading in Australia since at least 1967 and that the business has made and sold a range of polypropylene and polyurethane goods as well as  goods made from a combination of plastics and metal materials, for a range of industrial applications, since that time. Mr Rayner declares that his company also custom designs and manufactures polymeric and plastic goods under the trade mark NYLOCAST. Exhibit RWR-1 is a brochure under the company name Nylocast Engineering Co Pty Ltd. While this brochure is undated it must have issued some time prior to the change in the company name which occurred on 1 September 1988, (Exhibit MPS-4 to the Michael Peter Squires declaration). Mr Rayner declares that his company manufactures many goods under the NYLOCAST trade mark that are the same as those made by the applicant under its NYLACAST trade mark.

   Michael Peter Squires

2. Mr Squires’ declaration essentially comprises a number of exhibits obtained under the Freedom of Information Act and from Internet searches and library research. Exhibit MPS-2 is material downloaded from the applicant’s website listing industry applications for the goods it manufactures. Exhibit MPS-3 comprises extracts from The Business Who’s Who, 13^th Edition dated 1992 and The Business Who’s Who, 19^th Edition, dated 1998 which show entries for the Nylocast Plastics Co. Exhibit MPS-4 comprises company extracts obtained from Dunn & Bradstreet relating to Nylocast Engineering Co Pty Ltd and Polynyl Plastics (Aust) Pty Ltd and business name extracts relating to Nylocast Plastics Co.

   Anthony Michael Hurd

3. Mr Hurd declares that the opponent and its predecessors in business have manufactured a broad range of polymer and plastics goods in Australia under a range of ‘NYLA’ trade marks. He provides details of eleven of the opponent’s registered ‘NYLA’ trade marks. The goods are promoted by way of directory advertisements, sample boards, brochures, posters and magazines advertisements. The sales figures for goods under each of five of the trade marks over the period 1995 to 1999 vary from moderate to substantial. Mr Hurd declares his concern that use by a body other than the opponent of a trade mark beginning with the prefix NYLA will lead to deception and confusion because of the opponent’s reputation in its family of NYLA trade marks. Exhibit AMH-1 is a selection of brochures showing use of the opponent’s trade marks in a range of industries.

   Evidence in answer
   Mussa Mahomed
   Mr Mahomed declares that the applicant company has been a pioneer in the field of engineering plastics and that it has developed a series of grades of cast nylon including a lubricated nylon which is sold under the trade mark NYLACAST OILON. He declares that NYLACAST is registered in the United Kingdom, Poland and South Africa. Exhibit MM4 is an extract from the UK’s Trade Marks Registry showing that NYLACAST has been registered for cast nylon products, in the UK, since April 1968. The applicant also has registrations in the United Kingdom for NYLACAST-OILON, NYLAMET, NYLACAST NYLUBE, NYLACAST OILON HI-TOL, NYLAJET and NYLAMAX. Mr Mahomed declares that his company first used the trade mark NYLACAST in Australia in about 1976 and over the years the company has had a number of different distributors of its products. Exhibit MM7 contains copies of a number of pieces of correspondence and invoices which refer to the trade mark. Mr Mahomed provides sales figures for goods sold in Australia for seven non-consecutive years between the years 1968 and 1998. These are low to moderate in value. Mr Mahomed declares that because his company has had a number of distributors over the years, some of which are no longer in existence, it is difficult to obtain annual promotional expenditure on the trade mark. He reports that although his company has regularly provided the distributors with promotional brochures most of the direct promotional activity has been undertaken by the distributors themselves.  Mr Mahomed declares that to his knowledge there have never been any instances of confusion between the subject trade mark and the trade marks of other undertakings.

   Grounds of opposition  

4. No written submissions have been filed on behalf of either party. The evidence in support goes to support grounds of opposition under sections 44, 58 and 60 of the Act. The remaining grounds have not been addressed and I regard them as not being established.

   Section 58

5. Section 58 of the Act provides that registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

6. McGarvie J in Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd, 10 IPR 402 said,

   The basic common law principle is that the first person who uses a trade mark of an appropriate type within a country becomes the proprietor of the mark there: Re Registered Trade Mark "Yanx"; Ex Parte Amalgamated Tobacco Corp Ltd (1951) 82 CLR 592 at 603; MoorgateTobacco Co Ltd v Philip Morris Ltd (No 2)(1948) 59ALJR 77 at 83. A person who becomes proprietor of a trade mark in this way is entitled at common law to restrain a person who later commences to use the trade mark.

7. In other words, the first user of a trade mark in Australia for particular goods or services, is the owner of the trade mark in Australia for the particular goods or services, at common law. In Hicks's Trade Mark, (1897) 22 VLR 636, Holroyd J said,

   In order to substantiate his application to be placed on the Register for this word, he must have claimed to be the proprietor, and the word "proprietor" must be taken to mean the person entitled to the exclusive use of that name.  If there is anyone else who would be interfered with by the registration ... in the exercise of a right which such person has already acquired to use the same word in application to the same kind of thing, then Hicks ought not to have been put on the Register for that trade mark.

8. The expressions, 'the same kind of thing' and 'the same word' in the Hick's case have come to mean 'the same goods or services' and 'a substantially identical trade mark'.  More recently Gummow J, in Carnival Cruise Lines Inc. v Sitmar Cruises Limited, 31 IPR 375, confirmed that the opponent must show that it has used a trade mark that is at least substantially identical with the opposed trade mark, before the application date. He said in respect of substantial identicality,

   It requires a total impression of similarity to emerge from a comparison between the two marks.  In a real sense a claim to proprietorship of the one extends to the other.

1. The only difference in the trade marks NYLOCAST and NYLACAST is in the fourth letter. Visually these trade marks are almost identical so that visual deception is almost inevitable. They are also almost identical phonetically, particularly when ordinary pronunciation and variations in accent are taken into account. I find that these two trade marks are substantially identical.

2. Mr Rayner declares that his company and its predecessors have used the trade mark NYLOCAST since at least 1967. However the evidence is deficient in that the only evidence before me is a brochure in the name of Nylocast Engineering Co Pty Ltd showing use of the NYLOCAST trade mark on plain and roller bearing nylon wheels. This must have been printed prior to 1988 because that entity changed its name early in 1988.

3. Mr Mahomed declares that his company first used NYLACAST in Australia ‘in around 1976’. However the first evidence of actual use in Australia is to be found in an invoice for pedestal liners for use in the locomotive industry, dated 25 September 1984.

4. Nylocast Engineering Co Pty Ltd came into being on 24 May 1967 but I have no evidence of when it first used the trade mark NYLOCAST. I think it is arguable that it used its trade mark well before the NYLACAST trade mark was used in Australia but evidence of this is not before me. In the circumstances I am unable to determine who was the first to use its trade mark and I therefore decline to make a finding in terms of section 58. This ground has therefore not been established.

   Section 44

5. In order to establish a ground of opposition under the provisions of section 44 of the Act, the opponent must establish there is a substantially identical or deceptively similar trade mark application or registration, with an earlier priority date, in respect of similar goods or closely related services, in the name of a person other than the applicant. Section 10 of the Act provides that a deceptively similar trade mark is one that so nearly resembles the other trade mark that it is likely to deceive or cause confusion. Section 14 of the Act provides that goods are similar to other goods if they are the same as the other goods, or if they are of the same description as that of the other goods.

6. It was not disputed that the goods fall within the same description. I note that the opponent’s registrations for NYLAFLEX and NYLAFLAT, in fact cover all goods in class 17.

7. The opponent relied on the trade mark registrations set out in the table below to establish its ground of opposition under section 44. Another trade mark, NYLADRAIN, was cited by the opponent but as this is a pending application with a later priority date than that of the subject application it is not relevant to this matter.

Number	Priority Date	Trade Mark	Goods
273654	1 November 1973	NYLAFLEX	All goods in this class including plastic sheet material for use as stationery binders, (16)
284433	13 January 1975	NYLAFLEX	Non-metallic hoses; and all other goods included in this class, (17).
407045	17 April 1984	NYLAFLAT	All goods included in this class including non-metallic hoses, (17).
418235	15 November 1984	NYLADUCT	Reinforced and un-reinforced plastics and rubber fabrics with either a steel or aluminium spiral used for the  construction of ducts; ducting for air-conditioning  installations, fume removal, dust collection and the like,(11)
450096	11 August 1986	NYLATEX	Lining fabrics including geotextiles for use in civil engineering and mining works, (24).
680859	15 December 1995	NYLADAMP	Insulating materials; viscoelastic insul- ating materials; insulating materials in trowellable, sprayable or sheet form, (17).
680860	15 December 1995	NYLAMAT	Insulating materials; insulating foams and laminates including insulating foams; metal foil for insulating and composite insulating materials including metal or polymeric layers, (17).
680861	15 December 1995	NYLASORB	Insulating materials; insulating foams and laminates including insulating foams; metal foil for insulating and composite insulating materials including metal or polymeric layers; acoustic curtains, (17).
680862	15 December 1995	NYLABAR	Insulating materials; insulating foams and laminates including insulating foams; metal foil for insulating and composite insulating materials including metal or polymeric  layers; acoustic curtains, (17).
720029	21 October 1996	NYLA	Plastics in extruded form; flexible pipes not of metal; hoses including reinforced hoses, (17).
744527	23 September 1997	NYLAFLO	Pipes, conduits in this class and hoses; hoses suitable for carrying water; vacuum hoses in this class; hoses for cleaning applications, (17).

1. An application of the side by side test used for determining if trade marks are substantial identical - Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd, (1963) 109 CLR 407 - shows obvious differences between the applicant’s trade mark and those of the opponent. Clearly these trade marks are not substantially identical.

2. On the issue of deceptive similarity Windeyer J. in Shell, above said,

   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 impression that such persons would get from the defendant's [trade mark].

   and,

   [The] deceptiveness that is contemplated must result from similarity; but the likelihood of deception must be judged not by the degree of similarity alone, but by the effect of that similarity in all the circumstances.

3. Apart from trade mark number 720029 which is the word, NYLA, each of the opponent’s trade marks is composed of the same prefix followed by a suffix that is descriptive of some characteristic or quality of the goods. The applicant’s trade mark has also been constructed in the same way.

4. The first three letters of each mark are the letters NYL and these are obviously derived from the word nylon and to that extent they too suggest the nature of the goods.  I note that the Macquarie Dictionary, 3rd Edition, lists only one other word beginning with these letters, that being the word nylghai, (an alternative spelling of the word nilgai), which is defined as a large antelope of eastern India. In the construction of a word to be used in an English speaking community it would be unusual for a word to begin with four consonants so the decision to choose a vowel to follow NYL is not surprising. A vowel clearly limited the available choice of letters. Both the opponent and the applicant happened to choose the letter ‘A’.

5. It requires more than just a similarity in the prefix to find that the trade marks are deceptively similar. In this case the suffix CAST in no way resembles FLEX, FLAT, DUCT, DAMP, MAT, SORB, BAR, and FLO. I do not think that any of the trade marks cited by the opponent bears a sufficient resemblance to NYLACAST, either phonetically or visually to find that the applicant’s trade mark is deceptively similar to one of the opponent's registered trade marks. However, that is not the end of the matter. In John Fitton & Co Ltd's Appn, (1949) 66 RPC 110, the Assistant Comptroller said when considering the trade mark EASYJEST in face of the registered trade mark JEST, that no limitation was to be placed ‘upon the nature of the confusion or deception so envisaged, whether it be visual or phonetic confusion of the marks themselves, or what is termed contextual confusion, or deception as to the trade provenance of the goods’. This kind of confusion is founded on a perception that, within the context of the circumstances of the market-place, the applicant's mark will be seen as being an extension of the opponent's registered trade marks due to the common element in the marks that leads to a conclusion that they originate from the same source. In the present circumstances the opponent has identified a family of registered trade marks beginning with the prefix NYLA, and ending with a word that has reference to the character or quality of the goods. In this context I find that the applicant’s trade mark is deceptively similar to the opponent’s trade marks. I find there is a real risk that consumers who may have come to know of the opponent’s family of trade marks will be deceived or confused into a belief that the applicant’s goods originate from the same source as the opponent’s goods.

6. However this is not sufficient to find that a ground of opposition under section 44 has been established. The Act contemplates and allows for a measure of deception and confusion in certain circumstances. The provisions of subsections 44(3) and 44(4) allow for registration of similar trade marks where the marks have been honestly and concurrently used or where the later filed application has been in continuous use from a date prior to the priority date of the conflicting trade mark.

7. Subsection 44(3) provides that if the Registrar is satisfied that there has been honest concurrent use of the trade marks, or 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.

8. The evidence shows that the applicant has used its trade mark in Australia since September 1984 in respect of cast nylon products.  Mr Mahomed declares that the two companies have traded side by side without confusion for many years.  The opponent has not referred to any instances of confusion. I have no reason to doubt the applicant’s honesty in its adoption of the trade mark NYLACAST. It registered NYLACAST in the UK in 1968 and followed with a registration of NYLACAST-OILON in 1975 and since then the applicant has registered in the United Kingdom, its own family of NYLA trade marks. In the circumstances of this case I find that the applicant has used its trade mark in Australia, honestly and concurrently for cast nylon, self-lubricating nylon and lubricated cast nylon, with those trade marks owned by the opponent and that for those goods the provisions of subsection 44 (3) apply. To that extent the section 44 ground of opposition has been unsuccessful. In respect of the remaining goods claimed in the application the ground of opposition has been established.

   Section 60

1. In order to satisfy a ground of opposition under the provisions of section 60 of the Act, the opponent must establish that the applied-for trade mark is substantially identical with or deceptively similar to another trade mark or trade marks that have acquired a reputation in Australia before the priority date of the applied for trade mark and, because of that reputation, use by the applicant of its trade mark, would be likely to deceive or cause confusion. Section 60 does not require the relevant goods or services to be the same or closely related nor does it require the trade mark/s on which the opponent relies to be registered or the subject of application/s for registration.

2. I have already found that NYLOCAST and NYLACAST are substantially identical but I have no idea of the reputation that may have accrued to the NYLOCAST trade mark which is owned by an entity other than the opponent.  I have no evidence of the breadth of exposure of the trade mark, the value of sales or the extent of the advertising and no declarations from independent consumers attesting to the reputation of NYLOCAST at the priority date of the application.

3. The opponent has used some at least of its family of NYLA trade marks and the evidence has left me in no doubt that it does indeed have a presence in industry. Mr Hurd declares that first use of NYLAFLEX and NYLAFLO was prior to 1990 and that NYLAFLAT and NYLADUCT were first used as far back as 1993 and that NYLA was first used as far back as 1996. However, ‘reputation in Australia cannot be assumed - it must still be established as a question of fact’ - Lockhart J, in Conagra Inc v McCain Foods (Aust) Pty Ltd, (1992) 23 FCR 302. The opponent’s trade marks are used in different industries and I have not been provided with any evidence that consumers do have an understanding that there is a family of NYLA trade marks originating from the same source. On the basis of the evidence before me I cannot be satisfied that at the priority date of the subject application the opponent’s trade marks enjoyed a sufficient reputation for the purposes of section 60. I find the opponent has not met its burden of proof under section 60. The opponent has not established that at the relevant date, its trade marks had a reputation, sufficient to create in the public mind an association that would be likely to lead consumers into a false belief that the applicant's goods emanated from the same source as the opponent’s goods. I find the ground of opposition in terms of section 60 to be unsuccessful.

   Decision

4. The ground of opposition under section 44 has been partially established and I refuse to register the trade mark as it stands. I have found that the applicant’s trade mark is deceptively similar to the opponent’s registered trade marks but I have also found that the applicant has used its trade mark for some of the goods claimed, honestly and concurrently, with the opponent’s registered trade marks. I therefore direct that if within fourteen days of the date on this decision, the goods are amended to accord with the evidence, that is, to:

   Cast nylon, self-lubricating cast nylon and lubricated cast nylon.

   and the following endorsement is applied to the application,

   The provisions of subsection 44(3) applied,

   trade mark number 759041 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 the appeal has been decided or discontinued.

   Mary Skivington
   Hearing Officer
   Trade Marks Hearings
   19 November 2004