Patron Spirits International AG v Fernbrew Pty Ltd - [2018] ATMO 87

TRADE MARKS ACT 1995

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

Re:Opposition by Patrón Spirits International AG to registration of trade mark application 1762097 (33) - The Pirate Bay Rum Company - in the name of Fernbrew Pty Ltd

Delegate:	Adrian Richards
Representation:	Opponent: Sam Hallahan of Counsel, instructed by Davies Collison Cave Applicant: Sean McManis of Shelston IP (written submissions)
Decision:	2018 ATMO 87 – Trade Marks Act 1995 (Cth) – opposition to registration under section 52 – grounds of opposition under sections 42(b) 44 and 60 considered – none established – trade mark to proceed to registration

Background

This decision with reasons concerns an opposition to the registration of a trade mark under s 52 of the Trade Marks Act 1995 (Cth) (‘the Act’). Relevant particulars of that trade mark are:
Trade mark:
The Pirate Bay Rum Company

(‘the Trade Mark’)
Specification of goods:         Class 33: Alcohol for drinking; Alcoholic beverages (except beer); Alcoholic beverages (except beer) containing more than 1.15% of alcohol by volume; Alcoholic cocktails containing more than 1.15% of alcohol by volume; Alcoholic drinks (except beer) containing more than 1.15% of alcohol by volume; Carbonated beverages (alcoholic, except beers); Distilled alcoholic beverages; Drinks containing 1.15% of alcohol or more by volume; Liquors (alcoholic beverages); Pre-mixed alcoholic beverages, other than beer-based (‘the Applicant’s Goods’)
Applicant:Fernbrew Pty Ltd (‘the Applicant’)
Priority date:
5 April 2016

(‘the Relevant Date’)
The Trade Mark was examined and then advertised on 25 August 2016 as having been accepted for possible registration. A Notice of Intention to Oppose registration of the Trade Mark was filed on 25 October 2016 by Patrón Spirits International AG (‘the Opponent’). The Opponent’s Statement of Grounds and Particulars (‘the SGP’) followed on 24 November 2015. This office gave a copy of the SGP to the Applicant who responded on 7 December 2016, by filing a Notice of Intention to Defend the opposed application.
Once those initial stages of the opposition process were complete, the parties alternately filed evidence in support, answer and reply in accordance with the timetable and procedure set out in reg 5.14 of the Trade Marks Regulations 1995 (Cth) (‘the Regulations’).
Once the evidence stages were complete this office invited the parties to request a hearing or file written submissions on the opposition. The Opponent sought an oral hearing, and the Applicant elected to file written submissions. The hearing took place in Canberra on 5 April 2018 before me, a delegate of the Registrar of Trade Marks. Sam Hallahan of Counsel, instructed by Davies Collison Cave, appeared on behalf of the Opponent having also provided written submissions beforehand. The Applicant did not attend the hearing but written submissions were provided by its attorney Sean McManis of Shelston IP.

Evidence

The evidence consists of the following declarations:
Evidence in support
Lyn Marie MacEachern, Operations Manager of the Opponent, made 13 March 2017 with Exhibits LMM-1 to LMM-10, including confidential exhibit LMM-3 (‘MacEachern’)
Evidence in answer
Sean Francis McManis, Solicitor and Principal at Shelston IP Pty Ltd, made 30 June 2017 with Annexures SFM-1 to SFM-5 (‘McManis’)
Rex D’Aquino, Managing Director of the Applicant, made 29 June 2017 with Annexures RD-1 to RD-3 (‘D’Aquino’)
Evidence in reply
Katherine Louise Kemp, Trade Mark Searcher at Davies Collison Cave, made 12 September 2017 with Exhibits KK-1 to KK-3 (‘Kemp’)
MacEachern briefly introduces the Opponent, who is a producer of alcoholic beverages, including its eponymous PATRÓN range of tequilas. It is however another mark from its stable, PYRAT (the Opponent’s Trade Mark), that is central to these proceedings.
Originally launched overseas in 1996, PYRAT rum found its way to Australia in 2005. The number of bottles of PYRAT rum sent by the Opponent to Australian distributors is set out in MacEachern for the years 2011 to 2016. While these figures are confidential, the Opponent’s shipments into Australia can be characterised as modest. This is to be understood in the context of the Opponent’s PYRAT rum offerings to date, which are at the higher end of the market, retailing in Australia at around $100 to $600 a bottle as shown in annexures to both MacEachern and Kemp.
Examples of the Opponent’s marketing materials for PYRAT rum are included in MacEachern. Within the examples offered, the Opponent’s marketing is directed at the world in general, apparent from the extracts in evidence from its website and its presence on major social media platforms. The only example of a promotion to any specific audience is a tasting that occurred in the south of the United States of America in 2014.
Turning to third party mentions of PYRAT rum, several online reviews have been annexed to MacEachern. Just one of these reviews, from 2014, was directed at an Australian audience. The Opponent also provides a news article from 2010 as evidence of promotion of PYRAT rum in Australia. It concerns the launch of a vodka brand, ULTIMAT, by the Opponent, and makes passing mention of PYRAT rums as another line of products offered by the Opponent. Printouts from the websites of several Australian online liquor retailers and one wholesaler have also been annexed. These show PYRAT rum on offer for purchase in Australia, but after the Relevant Date.
MacEachern puts forward information to support the Opponent’s claim that ‘pyrat’ is one of the alternative spellings of ‘pirate’. The following excerpts from very early versions of William Shakespeare’s play Hamlet were given as examples:
Second Quarto (1604)
Ere wee were two daies old at Sea, a Pyrat of very warlike appointment gaue vs chaſe.
First Folio (1623)
Sre we were two dayes old at Sea, a Pyrate of very Warlicke appointment gaue vs Chace.
Evidence on this point was also proffered by way of an excerpt from an 1892 dictionary that presents ‘PIRATE, PIRAT and PYRAT(E)’ as alternative spellings.[1] The later examples of usage therein adopt today’s standard spelling, with the most recent use of an archaic spelling being from 1744. From reviewing these materials, it appears that the spelling of pirate had not been standardised prior to that time. The archaic spellings of also happened to be in common use during the ‘golden age of piracy’ in the Caribbean.
[1] C. A. M. Fennell (ed), The Stanford Dictionary of Anglicised Words and Phrases (Cambridge University Press, 1892).
MacEachern also introduces the idea that there is a connection between rum and pirates. From Long John Silver’s chorus line ‘Yo-ho-ho and a bottle of rum!’,[2] to Captain Jack Sparrow’s many queries as to ‘Why is rum the gone?’,[3] fictional portrayals of the golden age of piracy in the Caribbean have often presented rum as the drink of choice for pirates. What is more, each of the declarants, and the parties, are largely in agreement about this connection. Much of McManis is concerned with making this point, annexing several fiction and non-fiction sources. D’Aquino presents a broader view, drawing associations between rum on the one hand with pirates, sailors and islands on the other. This is presented as being based on a combination of personal knowledge of popular culture, along with industry experience in the branding and marketing of rum products. The declarant mentions a number of other rum trade marks on this general theme, including ‘Brinley Gold Shipwreck, Rebellion Bay, Captain Morgan, El Dorado, Bundaberg Mutiny, Black Roberts, Calico Jack, Bounty, Illegal Tender and Newport.’ Shifting this exposition from words to pictures, annexed to D’Aquino are several rum labels that contain images of sailing ships and pirates. Kemp goes some way toward making the same point, albeit in a reserved fashion. Having researched the history of rum, the declarant concludes that rum ‘in its various forms has a long and geographically diverse history and has been associated generally with a range of socio-economic groups including a long history of nautical association.’
[2] Robert Louis Stevenson, Treasure Island (Cassel, 1883).
[3] Pirates of the Caribbean: The Curse of the Black Pearl (Directed by Gore Verbinski, Walt Disney Pictures, 2003).
Aspects of McManis and D’Aquino go to the likely pronunciation of the word ‘pyrat’. The latter suggesting that ‘pyrat’ would not sound the same as ‘pirate’, without further elaboration, while the former annexes pages from the Macquarie Dictionary for words beginning with letters ‘pyr-‘.
D’Aquino offers a brief outline of the Applicant’s business, and presents the declarant as an authority on the Australian alcoholic beverages trade. In that vein, Mr D’Aquino declares that he is personally ‘aware that Bundaberg Rum, which is very clearly the market leading rum sold in Australia, trades over 1 million cases (of 12 bottles) per year.’
Finally, Kemp provides a printout from the website of Australian liquor retailer Dan Murphy’s, showing 327 different rum products. Most of these are bottles of spirit, with a handful of premixed bottles and cans. The range in prices for a full sized bottle of spirit (either 700ml or 750ml) is extreme—from under $30 up to $6000, with all manner of price points in between.

Grounds and onus

The SGP nominated four grounds of opposition based on ss 42(b), 44, 60 and 62A of the Act. In its written outline of submissions and at the hearing the Opponent indicated it would not press the ground under s 62A of the Act, so I have not explored that ground in these reasons. However, should be Opponent appeal this decision it would be open to it to plead any of the grounds of opposition available under the Act.
The onus is on the Opponent to establish at least one ground of opposition. The relevant standard of proof is the ordinary civil standard, based on the balance of probabilities.[4] The rights of the parties are to be determined as at the Relevant Date.[5]

Reasons

[4] Pfizer Products Inc v Karam (2006) 219 FCR 585, 591-4 [16]-[26]; Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133].

[5] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595.

Section 44

Only s 44(1) of the Act insofar as it refers to ‘goods’ is relevant to this discussion. This is set out below:
44 Identical etc. trade marks
(1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:
(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar goods…; or
(ii)a trade mark whose registration in respect of similar goods…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…
Note 1:   For deceptively similar see section 10.
Note 2:   For similar goods see subsection 14(1).
Note 3:   For priority date see section 12.
I mention that Applicant has not led evidence or made submissions relevant to either ss 44(3) or 44(4). To paraphrase the issues left to be decided under s 44(1), in order to establish this ground the Opponent must show that there is a trade mark with a priority date earlier than the Relevant Date claiming ‘similar’ goods to the Applicant’s Goods that is either substantially identical with, or deceptively similar to, the Trade Mark.
The Opponent has nominated its registered Australian trade mark number 886836 as the basis for this ground of opposition. Its relevant details are:
Trade mark:  PYRAT
Specification of goods:         Class 33: Alcoholic beverages including distilled spirits; rum (‘the Opponent’s Goods’)
Priority date:  23 August 2001
The priority date of the Opponent’s Trade Mark is over 14 years earlier than the Relevant Date. Despite their differing formulations, the Opponent’s Goods and the Applicant’s Goods effectively claim the same goods—a broad range of drinks that contain ethyl alcohol. That said, on the face of their respective claims the breadth of beverages that could fall within the Applicant’s Goods would be marginally narrower than (but of course are still similar to) the Opponent’s Goods. The marks are quite clearly not substantially identical, so the only remaining issue is whether they are ‘deceptively similar’. This term is defined in s 10 of the Act:
10 Definition of deceptively similar
For the purposes of this Act, a trade 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.
‘Confusion’ requires there to be mere wonderment as to common origin,[6] while ‘deception’ ‘implies the creation of an incorrect belief or mental impression’.[7] Therefore, whether the Trade Mark so nearly resembles the Opponent’s Trade Mark that it is likely to cause confusion represents the lower bar for the Opponent when compared to whether the Trade Mark is likely to deceive. I will accordingly confine this discussion to the former issue. There must be a ‘real tangible danger’ of confusion occurring.[8] Relevant to the deceptive similarity enquiry is the risk of ‘imperfect recollection’—the idea that the relevant consumer upon encountering the Trade Mark is not expected to have a perfect recall of the Opponent’s Trade Mark.[9] It is useful firstly to consider any visual, aural or conceptual resemblance between the marks.
[6] Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365, 382 [50] (‘Woolworths’).
[7] Pioneer Hi-Bred Corn Co v Hy-line Chicks Pty Ltd [1979] RPC 410, 423 quoted in Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107, 122 [39].
[8] Woolworths (1999) 93 FCR 365, 382 [50].
[9] Shell Co. (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407, 415 (Windeyer J).
The Opponent submits that the significant and distinctive element of the Trade Mark is the word combination ‘Pirate Bay’ and that the surrounding words ‘The…Rum Company’ should be given little weight because they are descriptive of the goods in question. It submits, reasonably in my opinion, that consumers are likely to recall the Trade Mark as PIRATE BAY (or possibly PIRATE BAY RUM). Its preferred analysis of the resemblance of the marks therefore seeks to compare PYRAT with PIRATE BAY.
The Applicant agrees with the Opponent in that regard, but argues that the Trade Mark in fact conveys two concepts: a company that makes rum and a place called ‘Pirate Bay’. The former, it submits, may be less distinctive than the latter, but both are nevertheless ideas suggested by the Trade Mark.
The Applicant’s submissions going to resemblance of the marks more closely accord with established principles, which require the whole of each trade mark to be compared with the other.[10] That said, even when I consider the Opponent’s case at its highest and PYRAT is compared with the element PIRATE BAY alone, the resemblance is in my view slight. They do not look at all alike, they do not, as wholes, sound alike, and the ideas they convey are distinct.
[10] Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9, 36 [92].
On a visual comparison, once it is noted that PYRAT and PIRATE BAY start with the same letter, there is not much left to say. Their visual resemblance is non-existent. The pronunciation of PYRAT was the subject of some conjecture for the purpose of an aural comparison of the marks. The Applicant suggested that its first syllable might be the same as in the word ‘pyramid’, which the Opponent understandably characterised as an exceptionally careless reading. Regardless of how it may be pronounced, however, it is apparent the marks as wholes are aurally distinct. PYRAT (pronounced as ‘pirate’) and PIRATE BAY may share the same word phonetically speaking, but in terms of syllables the PIRATE BAY element of the Trade Mark is made 50 percent longer by the addition of that second word ‘Bay’. Moreover, this extra word is not suggestive of a brand extension or a by-line, but rather changes the concept conveyed—the word ‘pirate’ solus refers to a person, whereas the combination ‘Pirate Bay’ is likely to call to mind a bay (real or imagined) of that name.[11]
[11] As an aside (unrelated both to rum and the type of pirates that are the subject of these reasons), The Pirate Bay is an extant website of particular infamy, having been blocked by Federal Court order two years ago. See: Roadshow Films Pty Ltd v Telstra Corporation Ltd (2016) 248 FCR 178.
Bearing the foregoing in mind, I turn to consider the risk of confusion. As mentioned, the evidence of both parties contained various references to an association between pirates and rum. At the hearing, the Opponent argued that the antiquated spelling in the Opponent’s Trade Mark helps to reinforce the idea that pirates of old loved their rum. The Applicant’s motivation for establishing a strong conceptual link is more obvious. It sought to diminish the distinctive character of the term PYRAT/PIRATE through this long held connection between cane spirit and buccaneers. But, neither approach greatly informs the overall assessment I must make. The main thrust of both parties’ arguments on deceptive similarity relate to resemblance, on which I have already set out my findings above. There was however one extra point made by the Opponent, to which I now turn.
To the extent that the Opponent’s Trade Mark and the word ‘pirate’ would be pronounced identically, the Opponent’s Trade Mark, from an aural point of view, is wholly contained in the Trade Mark. The Opponent argued that this is significant because alcoholic beverages are often ordered verbally, either at a bar or over the counter at a liquor retailer. The Applicant took issue with much of this, but it is only necessary to recount one well-made point: it is very unlikely that customers would ever omit the word ‘Bay’ when referring to goods offered under the Trade Mark.
Despite being in respect of the same goods, and arguably sharing an aural element, I am not on balance satisfied that this resemblance would give rise to ‘a real tangible danger’ of consumers being caused to wonder whether rum offered under the Trade Mark comes from the Opponent.[12] This ground of opposition has not been established.
[12] Cf Woolworths (1999) 93 FCR 365, 382 [50].

Section 60

Section 60 of the Act reads:
60 Trade mark similar to trade mark that has acquired a reputation in Australia
The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(1)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and
(2)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.
Note: For priority date see section 12.
The first element of this ground of opposition requires the Opponent to establish the requisite ‘reputation’ in an earlier trade mark in Australia existed at the Relevant Date as a matter of fact.[13] As might already be apparent from my assessment of the evidence above, the Opponent’s evidence in this regard is not persuasive.
[13] ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193, 234.
‘In practice it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product.’[14] Here, the Opponent has provided evidence of only modest sales at the wholesale level and no evidence at all of its advertising or promotional expenditure (if any) in Australia. But this is not the end of the enquiry:
[I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.
As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also the esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the “recognition” component of the trade mark’s reputation. The credit, image and values projected by a trade mark attaches to the “esteem” component of the reputation as do the public events and other trader’s marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, “contra deals” and so forth.
It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.[15]
[14] McCormick & Co Inc v McCormick (2000) 51 IPR 102, 127 [86] (citations omitted).
[15] Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl Gesellschaft GmbH & Co KG (1999) 47 IPR 423, 436.

As far as any ‘esteem’ or ‘image’ projected by its mark is reflected in the Opponent’s evidence, it is clear enough from the handful of online reviews provided, and the comments below some of these, that PYRAT rum is well regarded by those familiar with it. No doubt the esteem in which it is held by these individuals is a factor in the relatively high prices PYRAT rum commands in Australia. There is, however, a paucity of evidence that the esteem component of reputation in the Opponent’s Trade Mark was widely appreciated in Australia by the Relevant Date. The evidence contains just one short, albeit flattering, online review directed toward Australian readers and a passing reference to PYRAT rum in another short article which is largely concerned with the launch of the Opponent’s ULTIMAT vodka.
Whilst I accept the general proposition put by the Opponent that the requisite reputation can exist within a particular niche or price point in the rum market, the evidence does not establish that such a niche reputation existed in Australia at the Relevant Date. For this reason, this ground of opposition must also fail. However, if I am wrong in my assessment of the extent of the reputation of the Opponent’s Trade Mark, I would in any event conclude that use of the Trade Mark would not be likely to deceive or cause confusion, essentially for the same reasons discussed earlier in relation to the s 44 ground.

Section 42(b)

Section 42(b) of the Act is reproduced below:
42 Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
…
(b) its use would be contrary to law.
The Opponent has put forward s 18 of the Australian Consumer Law,[16] as the basis for this ground of opposition and in support relies on the same evidence and submissions discussed above in connection with its s 60 ground. Section 18 of the ACL relevantly provides:
[16] Competition and Consumer Act 2010 (Cth) sch 2 (‘ACL’).
18 Misleading or deceptive conduct
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
In reproducing the quote below, I note that the predecessor to s 18 of the ACL was s 52 of the Trade Practices Act 1974 (Cth):
The Trade Marks Act is concerned with deception or confusion to the public as to the source of goods. The Trade Practices Act is concerned with deception of the public as consumers of goods or services…Therefore conduct which merely causes some uncertainty in the minds of relevant members of the public does not breach s. 52.[17]
[17] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 (Mason J).
As such, deception or confusion under the Act represents a lower bar than the standard set in s 18 of the ACL. Having already decided that the applicant has not established a likelihood of deception or confusion, I also find that the Opponent has not established that use of the Trade Mark would breach s 18 of the ACL. This ground of opposition has not been established.

Decision and costs

Section 55 of the Act relevantly provides:
55 Decision
(1) Unless subsection (3) applies to the proceedings, the Registrar must, at the end, decide:
(a) to refuse to register the trade mark; or
(b) to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;
having regard to the extent (if any) to which any ground on which the application was opposed has been established.
Note: For limitations see section 6.
Since the Opponent has not established any of the grounds of opposition pressed, I have decided the Trade Mark may proceed to registration one month from the date of this decision. If the Registrar is served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been withdrawn or discontinued. Otherwise, the disposition of the application should be in accordance with the Court’s order or direction.
Both parties requested that I make an award of costs. The normal course is for costs to follow the event, and I have not been given reason to depart from this. I award costs against the Opponent in the applicable amounts set out in sch 8 of the Regulations.

Adrian Richards
Hearing Officer
Oppositions and Hearings
Trade Marks and Designs Group
31 May 2018