Opposition by KELLOGG COMPANY to registration of trade mark application number 597207 in the name of CRESWIN PTY LTD for the mark COCO FLAKES in class 30

[1999] ATMO 1

TRADE MARKS ACT 1955

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

Re:Opposition by KELLOGG COMPANY to registration of trade mark application number 597207 in the name of CRESWIN PTY LTD for the mark COCO FLAKES in class 30

As provided for in the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act 1955 continue to govern this opposition.  Accordingly, unless otherwise specified, any reference to "the Act" in this decision is a reference to the Trade Marks Act 1955.

Background

Application number 597207 was lodged on 2 March 1993, in the name of CRESWIN PTY LTD (the applicant).  The application was for the registration of the word mark COCO FLAKES and covered the statement of goods, “Breakfast cereal, all being cocoa flavoured”, in Class 30.  The trade mark was advertised as accepted in the Australian Official Journal of Trade Marks of 21 July 1994.

Notice of opposition to the trade mark’s registration was lodged by KELLOGG COMPANY (the opponent) on 17 October 1994.  The notice of opposition listed a number of grounds.  However, the matters which were later pursued by the opponent's representative through submissions at the hearing were under: s.40, that the applicant was not the proprietor of the mark in question; s.33, that the present trade mark was substantially identical with, or deceptively similar to, a trade mark already registered by the opponent for the same or similar goods as those covered by the application; and s.28, that the use of the subject trade mark on the goods claimed would be likely to mislead or cause confusion.  Also listed in the notice of opposition, but not pursued at the hearing, was the ground that the mark was one which was not entitled to protection in a court of law.  I will address the significance of this in the Analysis section of the reasons for my decision.

The service and lodgment of the both parties' evidence in the matter was completed by 19 September 1997.  The opponent requested a hearing in the matter and it came before me, as a delegate of the Registrar, in Sydney on 15 October 1998.  The opponent was represented by Mr Richard Cobden of Counsel, instructed by Baker & McKenzie, Solicitors and Attorneys.  Immediately prior to the hearing, the applicant's legal representative advised that the applicant would not appear at the hearing in person, or by telephone, but would be relying solely upon material presently before the Registrar.

Evidence

The evidence in support comprised a declaration by David Herdman, Trademark Counsel for the opponent, who gave details of sales, promotion and advertising under the opponent's trade mark, COCO POPS.  He declared as to the methods of promotion of the opponent's mark and the ancillary merchandising character "COCO The Monkey", and discussed the goodwill and reputation generated by the opponent's mark.  He also alleged that the applicant had solicited offers from the opponent for the subject mark soon after lodgment of its application.  Attached as exhibits to his declaration was sample packaging exhibiting the opponent's marks and also copies of historical company extracts from the Australian Securities Commission.

The evidence in answer comprised a declaration by Marino Sussich, a Director of the applicant, who declared as to the history of the development of the present trade mark.  Attached as exhibits was correspondence relating to the development of packaging, investigations into the production of breakfast cereal, a national press release, attempts to find suppliers and distributors for the applicant's product, a dictionary reference to the word COCO, photocopies of various breakfast cereal containers which incorporate the word COCOA, survey results of seven respondents, a sample of the applicant's packaging, copies of sales invoices, details of sales figures, material - which included video tapes - relating to advertising the applicant's product, and media advertisements.

The evidence in reply included a second declaration by David Herdman who responded to several points raised in the evidence in answer.  He gave details of the history of the opponent's marks and discussed the use by the opponent of the name and word COCO.  He attached, as exhibits, photocopies of various packaging used by the opponent, a videotape of a TV commercial from 1984, promotional and packaging materials, and other items, relating to COCO POPS and the character COCO The Monkey, dictionary references to the word COCO, and details of advertising, promotional and sales financial information and other material relating to the business and financial affairs of the opponent.  Completing the evidence in reply is a declaration by James Alexander, Managing Director of AC Neilsen-McNair, a research company well known for opinion polling, who expanded on the results of a survey made by his company in relation to the word COCO and which was exhibited to his declaration.  Also exhibited were materials used in relation to the survey.

Submissions

Mr Cobden, in his submissions, said that the opponent would be relying on the grounds of disputed proprietorship of the subject trade mark, alleged deceptive similarity of the mark with the opponent's prior registered mark, and finally that use of the applicant's trade mark on the goods claimed would be likely to mislead or cause given the reputation in the opponent's various marks.  He said that he would not be making any submissions on the ground that the applicant did not deal in the goods covered by the statement of goods and had no real intention of doing so, but still relied upon this ground if necessary.

With regard to the disputed proprietorship ground, Mr Cobden pointed to the number of marks used by the opponent on its breakfast cereals which included or comprised the word COCO.  He added that there was a practice in the industry to use words in relation to cereals such as POPS, FLAKES, PUFFS and BUBBLES which were descriptive in nature.  He said that the disclaimer of the word COCO, in relation to one of the applicant's registered marks, did not mean that it was not the proprietor of that word as a trade mark.  This was especially so given its wide use of the word on its packaging, and in relation to the monkey character labelled with that word, used in its promotion and advertising.  He referred to the tests for substantial identity listed in such cases as Kendall Company v Mulsyn Paint and Chemicals (1963) 109 CLR 300 and Shell Co of Australia v Esso Standard Oil (Australia) Ltd, (1961) 109 CLR 407. He said that in the present case, the applicant had merely added the descriptive word FLAKES to the opponent's mark COCO - meaning that the applicant was not the proprietor of the mark applied for.

Mr Cobden said, in relation to the s.33 ground, that the present mark was deceptively similar to the opponent's prior registered mark, number 153385, for the word COCO POPS and a statement of goods which included cocoa flavoured breakfast food and cereal preparations in line with his later arguments on the s.28 ground.  He distinguished this instance from the case of Coca-Cola (Canada) Limited v Pepsi-Cola (Canada) Limited (1942) RPC 127, (COCA-COLA v PEPSI-COLA) because he said that the shared element here was not common to the trade. He said that the present comparison was closer to the case of Broadhead's Appl'n (1950) 67 RPC 209, where an application for the mark ALKA-VESCENT failed in the face of the registration of the word ALKA-SELTZER.

Before making submissions on the ground that deception or confusion would ensue if the applicant used the mark on its goods - given the reputation and rights acquired by the opponent - Mr Cobden commented on the Registrar's practice, as it related to s.28 of the Act.  This is that some form of blameworthy conduct needed to be shown, in addition to the likelihood of deception and confusion, to mount a successful opposition under this section.  He said that the words of Burchett J, in a recent decision of the Full Court of the Federal Court - Campomar Sociedad Limitada & Anor v Nike International Limited & Anor [1998] 776 FCA (7 July 1998) - showed that this conjunctive reading of s.28 was not required for success in an opposition under that section.

On the opponent's reputation for its mark COCO POPS in relation to breakfast cereal, Mr Cobden said that the evidence showed that it was overwhelming.  He said that the AC Neilsen-McNair survey also showed that the word COCO was factually distinctive of the opponent, quite divorced from the word COCOA.  He compared that result with the applicant's survey, included in its evidence, which he said had not been properly conducted.  He submitted that I should attach little weight to it, relying for support here on the decision in Chase Manhattan Overseas Corp & Ors v Chase Corp Ltd & Anor (1985) 6 IPR 59 at 71.

Mr Cobden also said that, in addition to its COCO POPS mark, the opponent had a reputation in the trade mark CORN FLAKES.  Thus, the present mark COCO FLAKES represented a "bridging over" of marks which would lead to deception and confusion amongst the relevant public - Taylor Drug Co Ltd's Appl'n (1923) 40 RPC 193.

As I have previously said, the applicant made no submissions either before or at the hearing.

Analysis

Section 40 - Proprietorship

Sub-section 40(1) reads:

A person who claims to be the proprietor of a trade mark may make application to the Registrar for registration of that trade mark in Part A or Part B of the Register.

On that subject, McGarvie J. said in the case of Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402:

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 199 at 203; Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592 at 603; Moorgate Tobacco Co Ltd v Philip Morris Ltd(No 2) 59 ALJR 77 at 83.
 ...

In considering who, within s.40(1) of the Act, was at the time of Settef's application for registration the proprietor of the trade mark, one considers who at common law was the proprietor in Australia: The Shell Co of Australia Ltd v Rohm & Haas (1949) 78 CLR 601 at 625 and 627.

In other words, the first user of the mark in Australia, for the relevant goods and prior to the date of application, becomes the proprietor at common law.  Any small amount of use will suffice but the effect of the act relied on to constitute use must be the creation, in the minds of those concerned, of an impression that goods of a particular trader are being offered for sale in Australia.  This has also been the situation in such precedent cases as Seven Up Co v O.T. Ltd (1947) 75 CLR 203.

The applicant applied for registration of the trade mark COCO FLAKES on 2 March 1993 while, from the evidence, the opponent has used its trade mark COCO POPS in this country from 1959 onwards.  Mr Cobden has argued that the words FLAKES and POPS are merely descriptive of the goods and it is therefore the common word COCO which should be considered with respect to the proprietorship issue.

I agree with Mr Cobden that the word FLAKES is a descriptive term for the type of goods produced by the applicant - and also by the opponent under a different trade mark.  That word appears to be quite apt for those goods and, in fact the only one which readily springs to mind to designate them.  The word POPS is not, however, such a common term.  That word, whilst allusory has, to my mind, the appearance of being invented and could well be substituted by the words PUFFED RICE.  I believe, in deciding the issue of proprietorship, that s.40 only applies when the trade marks are identical, or so similar as to be virtually the same trade mark - Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) AIPC 91-049 and Karu Pty Ltd v Jose (1994) AIPC 91-101. I feel that here the trade marks of the respective parties are sufficiently different that they would not be seen as the same trade mark although the goods covered by both marks are clearly the same kind of thing.

Given the foregoing, I find that the opponent is not successful on this ground of opposition.

Section 33 - Substantially identical or deceptively similar

Sub-section 33(1) reads:

Subject to this Act, a trade mark is not capable of registration by a person in respect of goods if it is substantially identical with or deceptively similar to a trade mark which is registered, or is the subject of an application for registration, by another person in respect of the same goods, of goods of the same description as those goods, or of services that are closely related to those goods, unless the date of registration of the first-mentioned trade mark is, or will be, earlier than the date of registration of the second-mentioned trade mark.

The goods of interest to both of the parties are clearly the same or, at the very least, goods of the same description.  They are both cocoa flavoured breakfast cereals, and are intended to be sold through the same outlets to the same class of purchasers.

I now move on to determine whether the applicant’s trade mark, COCO FLAKES, and the opponent’s mark, COCO POPS, covered by registration number 153385, can be determined as being deceptively similar.  Sub-section 6(3) defines a mark as deceptively similar if it is likely to deceive or cause confusion.  To determine the deceptive similarity of marks, they should not be placed side by side but consideration should be given to any common net impression inferred from the two marks.  I refer here to the judgment in Australian Woollen Mills Ltd v F.S.Walton & Co Ltd, supra, at 658, where 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.  The effect of spoken description must be considered.  If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part.  The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.  Potential buyers of goods are not to be credited with any high perception or habitual caution.  On the other hand, exceptional carelessness or stupidity may be disregarded.  The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard.  Evidence of actual cases of deception, if forthcoming, is of great weight.

Here, the situation relies upon the so-called “imperfect recollection” of the marks in the market place, as discussed in cases such as Rysta Ltd's Appn (1943) 60 RPC 87. Both marks share the common word COCO. The spelling of that word in both of the marks in dispute, where COCO is used as an alternative to COCOA is not usual.  The reference in the Oxford Dictionary, included in the applicant's evidence, to those words being interchangeable is only in relation to the coconut tree, not to cocoa, which is a corruption of cacao.  The Macquarie Dictionary only refers to COCO in relation to coconut palms, or their fruit.  On the other hand, the word COCOA, is defined in Macquarie as, "the roasted and ground seed of the cacao, (Theobrama cacao…the source of cocoa and chocolate etc)…", or "a beverage made from cocoa powder".  I think that it would be the unusual word COCO in the disputed marks which would be remembered by those purchasing the respective goods.  Therefore, if a customer is exposed to goods bearing the opposing marks in the same market place, it would be highly likely that he or she would be deceived into thinking that they shared a common origin.  Therefore, notwithstanding my finding, in relation to the proprietorship ground that, while the word FLAKES is apt for description and the word POPS is more allusory, their separate use with the word COCO would still, in my opinion, be likely to deceive or cause confusion.  Given all of the foregoing, and having applied the tests outlined in the Australian Woollen Mills case, supra, I find that the trade mark here is deceptively similar to the opponent's prior registered mark for the same goods and that the opposition, as it is based upon this ground, is successful.

Section 28 - Deception and confusion

The provisions of this section of the Act read as follows:

A mark -

(a) the use of which would be likely to deceive or cause confusion;
           (b) the use of which would be contrary to law;
           (c) which comprises or contains scandalous matter; or

(d) which would otherwise be not entitled to protection in a court of justice,

shall not be registered as a trade mark.

The test to be applied under paragraph (a) of these provisions, on which the opponent partly relies, has been well established by cases such as Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd , supra, where it was said, at 608:

Registration should be refused if it appears that there is a real risk that the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case the two products come from the same source.

However, that risk must extend to a substantial number of people likely to be involved in the purchasing of the goods - Kendall Co v Mulsyn Paint and Chemicals, supra.  In assessing the reputation of the opponent’s mark in Australia, the relevant date is that of lodgment of the opposed application, 2 March 1993 - Southern Cross, supra.

The evidence clearly shows that the opponent had, at the appropriate date, a very significant reputation for its trade mark COCO POPS.  I have already found, in relation to the s.33 ground, that the applicant's mark COCO FLAKES is deceptively similar to that mark for the same goods or goods of the same description.  I now need to determine whether the use of the latter mark would lead to deception or confusion.  Both parties have included the results of surveys in their respective evidence.  The opponent's AC Neilsen-McNair survey results indicate that widespread deception and confusion as to the origin of goods would be likely to occur if they were sold bearing the respective trade marks.  On the other hand, the applicant included what was termed a "survey" which purports to show the very opposite.  The opponent's survey of 203 respondents is accompanied by detailed information as to the methodology employed and of those interviewed, and is lent credence by the fact that it was conducted by a reputable and well known research organisation.  Conversely, the applicant's survey was of only seven people, contained what could only be inferred as leading questions given the respondents were shown a package bearing some of the answers sought, was not restricted to the mark but also to that packaging, and had a distinct lack of detail as to respondents' selection, age, occupation or impartiality.  Consequently, I have given more weight to the opponent's survey.

I consider it relevant here that there are no trade marks on the Australian Register for cocoa-flavoured breakfast cereal which include the word COCO, aside from those owned by the opponent.  As I have said in relation to the s.33 ground, that spelling is unusual, with reference to goods including cocoa, and I believe that any reputation in this adheres to the opponent.  I think that, given the deceptive similarity of the two competing marks, the nature of the goods involved, the possible "bridging over" of marks for which the opponent has an unquestioned reputation, and the relatively unsophisticated consumers of the respective products, then a substantial number of persons would be caused to wonder as to the origin of both sets of goods.

Accordingly, I find that the use of the applicant’s trade mark would be likely to deceive and cause confusion.  The opposition must therefore succeed in terms of s.28(a).

As Mr Cobden submitted, the Registrar has required that blameworthy conduct be shown, in addition to the likelihood of deception and confusion, for an opposition based upon s.28 to be successful.  This followed the High Court decision in New South Wales Dairy Corp v Murray Goulbourn Co-operative Co Ltd 18 IPR 385 (the Moo/Moove case).  The practice was laid out in the decision of Hearing Officer Homann in Titan Manufacturing Co v John Terrence Coyne 22 IPR 613. That is, that paras 28(a) and 28(d) of the Act should be read together. This was supported by the Federal court decision, Canon Kabushiki Kaisha v Robert James Brook and Rachel Brook trading as The Cannon Watch Company 36 IPR 88, where Tamberlin J, after considering the judgments in the Moo/Moove case, concluded that, in his view, the reasons for judgment delivered by members of the High Court left the matter open as to whether there was a need to find blameworthy conduct in opposition proceedings based on s.28(a) as opposed to expungement proceedings.  He went on to find that:

Notwithstanding the diverse opinions expressed by members of the High Court in New South Wales Dairy Corporation case, I consider that I should follow the views expressed by the Full Federal Court in that case, with the result that in the case presently before me the opponent to the application for registration is required to demonstrate "blameworthy conduct".

As I have said, Mr Cobden made submissions in relation to the decision in Campomar Sociedad Limitada & Anor v Nike International Limited & Anor, supra, which he said meant that a conjunctive reading of s.28 was not correct.  This argument was identical to that which he presented to, and was considered by, Ms Vija Zars, a delegate of the Registrar, in an, as yet, unreported decision relating to opposition by Sea World, Inc. to the registration of a number of trade mark applications in the name of ANZ Executors & Trustee Company Limited and which was issued on 31 October 1998.

There, she said that their Honours, in the Campomar v Nike case, supra, did not deal with registration of a trade mark but with expungement of a trade mark from the Register.  She said that were not explicitly required to decide the issue of whether blameworthy conduct on the part of the applicant should, or should not, be established in proceedings involving opposition to the registration of a trade mark.  She found that their pronouncements constituted obiter dicta only, and therefore, at that stage, would not be considered binding on the Registrar.

I agree with Ms Zars conclusion here that such a passing statement on a point of law is not binding as precedent and is insufficient to change the status quo.  Accordingly, on that basis, I find that the Registrar's practice, in relation to s.28, should stand.

However, since the hearing in the present case, a decision of the Full Federal Court on appeal in the case of Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd [1998] 1704 FCA (23 Dec 1998) (as yet unreported) has issued.  This decision overturns the interpretation of the previous case law requiring a conjunctive reading of s.28.  However, Mr Cobden did not argue the Nettlefold case as precedent here and, because of my finding for the opponent on the s.33 ground of opposition, a result based on the s.28 ground is not critical to the outcome of the opposition as a whole.

However, for the record, there is nothing before me here to show that there has been any blameworthy conduct on the part of the applicant, nor any other circumstance, which would disentitle the mark to protection in a court of justice.  The sudden venture by a manufacturer of auto spare parts into the production of breakfast cereals might seem a trifle unusual but it is hardly a "blameworthy" act.  I find, therefore, that the requirements of paragraph 28(d) have not been made out.

In summary, I have found that deception or confusion would be likely to ensue if the mark was registered.  However, the opponent has not shown that the applicant committed any blameworthy actions, necessary for an opposition to succeed under a conjunctive reading of s.28.  The requirement for both grounds to be shown is no longer the law in order for success under s.28 but there is no need to discuss the matter further here, given my findings as to s.33.

Conclusion

I have found that the opposition has not been successful on the ground of disputed proprietorship.  I have, however, found for the opponent on the ground that the subject trade mark is deceptively similar to the opponent's prior registered mark for the same goods.  I have also found that the use of the applicant's mark would be likely to lead to deception or confusion, although the applicant has not committed any blameworthy action.

It follows then that the opposition as a whole has been successful and, subject to any appeal from this decision, I refuse to register the trade mark COCO FLAKES, the subject of this application.

Costs

Mr Cobden made no submissions as to costs but I can see no reason as to why they should not follow the result here.  I therefore award them to the opponent.

Ian Forno
Hearing Officer

11 January 1999