Paul Smith Limited v Aurac Enterprises Pty Ltd

[1999] ATMO 113

TRADE MARKS ACT 1995

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

Re:Opposition by Paul Smith Limited to the registration of trade mark application number 740888 in the name of Aurac Enterprises Pty Ltd for the word trade mark NEWBOLD in Class 25

Background
Application number 740888 was filed on 7 August 1997, in the name of Aurac Enterprises Pty Ltd (the applicant).  The application was for the registration of the trade mark NEWBOLD and covered the statement of goods, "Clothing, footwear & headgear" in Class 25.  Subsequent to examination, the trade mark was advertised as accepted in the Australian Official Journal of Trade Marks of 11 December 1997.

A notice of opposition to the trade mark’s registration was filed by Paul Smith Limited (the opponent), on 6 March 1998.  The notice of opposition listed a number of grounds.  However, those which the opponent pursued at the hearing were confirmed by its attorney at that time as being under ss.58 and 60.  Another ground, that under s.42, was listed in the notice of opposition and is, in my opinion, also relevant - although no submissions were made on it at the hearing.  Accordingly, those grounds are the subject of this decision and the reasons for it.

The opponent requested a hearing in the matter and it came before me, as a delegate of the Registrar, in Melbourne.  At the hearing, the opponent was represented by Mr Robert Strickland of Griffith Hack.  Appearing on behalf of the applicant was Mr Adam Kaye of Sackville Wilks & Co.

The Evidence
The evidence in support comprises a declaration by Ashley Long, the Commercial Co-Ordinator and Company Secretary of the opponent.  He declares as to the history of his company in the UK and overseas, and as to its adoption of the mark R.NEWBOLD in 1993, in relation to certain clothing items and their packaging.  He also says that some items of clothing bearing that mark were ordered by the "main and only" (sic) distributor of its goods, Fossano Pty Ltd (Fossano), in September 1995 and that these were sold in Australia in 1996.  He gives amounts expended on overseas advertising of clothing under the mark and also details some publications in which advertisements have appeared.  He says that many of these would have circulated in Australia over the years.  He also gives details as to the international trade fairs where the opponent's goods have been exhibited.  Finally, he expresses his view that the use of the mark by the applicant on clothing would lead to deception and confusion as to the origin of those goods.

Annexed to his declaration are several exhibits, including a brochure relating to his company's history and activities, examples of the mark used on packaging, swing tags and the like, world-wide sales figures of goods bearing the mark, and examples of advertisements in publications showing the mark.

The applicant did not serve any evidence in answer in relation to the matter.

Submissions
Mr Strickland, in his submissions on behalf of the opponent, said that the major grounds of opposition relied upon were, firstly, that the applicant was not the owner of the mark and therefore not entitled to apply for registration; and, secondly, that the mark applied for was substantially identical with, or deceptively similar to the opponent's mark which had acquired a reputation in Australia and that, therefore, its use by applicant would lead to deception or confusion.

He drew my attention to the opponent's evidence, saying that this showed that clothing had been sold under the opponent's mark in Australia in 1996, resulting from an order by Fossano in September 1995 - prior to the present application.  He said that this had not been countered by any evidence of use by the applicant of its own mark before these dates on behalf of the applicant.  He referred to Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402, among other precedent cases, to support his submissions that this uncontested first use meant that the opponent was the first user and therefore the owner of the present trade mark. This was so, he said, given the close similarity between the present mark NEWBOLD and the opponent's mark R.NEWBOLD. He said that even slight use by an overseas proprietor was sufficient to establish ownership - Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) 59 ALJR 77 at 83.

He submitted that, because of the close similarity of the competing marks, then deception and confusion was inevitable, especially because they would both be referred to as the NEWBOLD mark.

Mr Strickland closed his submissions by seeking costs on behalf of the opponent.

Mr Kaye submitted, on behalf of the applicant, that the Registrar had, prima facie, accepted its claim as to ownership and that the opponent had not done enough in putting its case to refute this.  He said that there was an onus upon the opponent to establish any grounds upon which it relied in order to succeed in the opposition and that its evidence was deficient in doing this.  He pointed to what he said were several shortcomings in that evidence.

He also referred to such precedent cases as Impex Electrical Ltd v Weinbaum (1927) 44 RPC 405 and W.D. & H.O. Wills(Aust) Ltd v Rothmans Ltd (1956) 94 CLR 182, which he said showed that, in the absence of convincing use by the opponent of its mark in Australia, the opposition must fail. He said that any sales which might have been made by Fossano did not constitute use on behalf of the opponent. He said that a "one off" purchase of a consignment of goods by that party did not mean that it gained the status of a legal distributor of the opponent's goods and that the opponent's evidence was silent on any such a relationship which, he said could not now be claimed. He said that the evidence was silent on whether the goods sold to Fossano in 1996 had actually carried the opponent's mark and that Mr Long had merely declared that Fossano was the distributor of clothing "in connection with which the said trade mark is used". He said that what the opponent had done had been to try to create the inference that the clothing sold by Fossano in 1996 had actually carried the opponent's mark.

Mr Kaye said that the exposure of the opponent's mark in foreign magazines did not equate to use in Australia, irrespective of whether those publications might have circulated in this country - Flagstaff Investments Pty Ltd v Guess? Inc. 16 IPR 311.

He closed his submissions by seeking costs in the matter in favour of the applicant.

Analysis
As I have previously stated, in giving the reasons for my decision in this opposition matter, I will only deal with the grounds pursued by Mr Strickland at the hearing - those under ss.58 and 60, and that under s.42, which I believe should be considered in coming to a decision here.

Section 58
This section reads:

Applicant not owner of trade mark

58.  The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

The term "owner" in the Trade Marks Act 1995 equates to that of "proprietor", as referred to in the Trade Marks Act 1955 - see p.2 of the Readers Guide to the 1995 Act.  The initial onus, with respect to ownership, is on the applicant for registration.  As is stated in s.27 of the Act:

27.(1) A person may apply for the registration of a trade mark in respect of goods and/or services if:

(a)the person claims to be the owner of the trade mark; and

(b)one of the following applies:

(i)the person is using or intends to use the trade mark in relation to the goods and/or services;

(ii)the person has authorised or intends to authorise another person to use the trade mark in relation to the goods and/or services;

(iii)the person intends to assign the trade mark to a body corporate that is about to be constituted with a view to the use by the body corporate of the trade mark in relation to the goods and/or services.

Ownership depends on a combination of authorship and first use and, as per Shell Co. (Aust.) Ltd v Rohm and Haas Co. (1949) 78 CLR 601, may be claimed either on being the first user of the trade mark in Australia, in relation to the nominated goods or services, or on the basis of the making of an application for registration.

However, that ownership is limited to "the same kind of thing" - as per Holroyd J in Hicks’ case (1897) 22 VLR 636. The present application covers the goods, "clothing, footwear and headgear", while the opponent's goods comprise, what appears to be, exclusively menswear including, from the Long declaration, "pants, jackets, jogging trousers, knitwear, t-shirts, shirts and trousers". Therefore, there is no doubt that the goods sold by both parties here are the same kind of thing.

However, the dispute of a claim to ownership of a mark can only proceed to be considered, where the opponent can also show that the word or words it relies upon as being owned by itself or another person is substantially identical with the mark, the subject of the application for registration.  In Carnival Cruise Lines Inc v Sitmar Cruises Ltd. (1994) AIPC 91- 049 at 38,114, when referring to the concept of proprietorship in the Trade Marks Act 1955, and to Shell Co. (Aust.) Ltd v Rohm and Haas, supra, where Gummow J. said:

[Shell v Rohm and Haas] does not supply any general authority for the proposition that in the case of disputed claims to proprietorship under the present statute anything less than substantial identity between the two marks will suffice. The phrase "substantially identical"  was discussed by Windeyer J. in The Shell  Company of Australia Limited v Esso Standard Oil (Australia) Limited (1961-1963) 109 CLR 407 at 414.

Windeyer J said, in the above case:

…(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.

Here, the applied-for trade mark is the word NEWBOLD while the opponents mark is, from the evidence, the name R.NEWBOLD.  Clearly, the only difference is the initial R.  I think it is obviously the case that both marks comprise or include a surname - the word NEWBOLD having no standard dictionary definition.  In the applicant's case, the mark comprises a reasonably uncommon surname and, in the opponent's case, that surname plus an initial.  I am of the opinion therefore that there is, given the rarity of the name and the fact that both would be referred to as the NEWBOLD mark, a sufficient impression of similarity when the marks are compared to say that they are substantially identical.

In relation to a claim of first use of a mark in Australia, 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 the goods of a particular trader are being offered for sale, in this country, under the trade mark.  There is authority that a court will regard slight use, in Australia, by an overseas owner as sufficient to give it ownership of the trade mark in Australia: The Seven Up Co v OT Ltd ( 1947) 75 CLR 203 at 211; Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 400; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2), supra.

The applicant here has submitted no evidence of use of the subject mark.  Accordingly, the first date that it can lay claim to ownership of that mark must be when it applied for the registration of it - 7 August 1997.  Against this is the claimed first use by the opponent of a date sometime "in" 1996 when Fossano allegedly received, and presumably resold, a small consignment of clothing from the opponent.  However, here I find it difficult to agree with Mr Strickland's argument, firstly, that it is implicit in the evidence that the goods carried the opponent's trade mark, and secondly, that the onwards sale of the clothing by Fossano was on behalf of the opponent.  I must agree here with Mr Kaye that Mr Long, in his declaration, neglects to say whether the clothing sent to Fossano was actually branded with the R.NEWBOLD mark, or whether it, in fact, bore the applicant's other apparent house mark, PAUL SMITH.  He does say in paragraph 5 of his declaration that Fossano is the only distributor of the opponent's clothing in Australia "in connection with which the said trade mark is used".  With respect, that does not clearly indicate that the disputed mark was placed on the 107 items of clothing which arrived in this country in 1996.  Also, there is nothing in the evidence, such as invoices or other records, which would indicate that the clothing was, in fact, paid for and then on-sold by Fossano.  There is, I concede, mention of "R.NEWBOLD SALES via Paul Smith Limited (UK)" in Australia in 1996 to the amount of 2,716 (presumably pounds sterling) in exhibit AJSL-3 to Mr Long's declaration but there are no sales in this country listed for 1997 or 1998.  This, in context, indicates to me nothing more than that the opponent may have sent some clothing to Fossano in 1996 in a one-off sale.  However, I am not convinced that this transaction represents sales of goods bearing the opponent's mark in Australia prior to the present mark's date of application.  It has therefore not convinced me that it has done enough o overcome the applicant's prima facie claim to ownership of the present mark.

I therefore dismiss this ground of opposition.

Section 60
This section reads:
Trade mark similar to trade mark that has acquired a reputation in Australia

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.

I have already found that the respective trade marks are substantially identical with each other.  That being the case, it now remains to be determined whether deception or confusion would be caused if the presently applied for mark is used on the goods in the specification, in the light of the opponent's reputation in the trade mark.  In assessing that reputation, the relevant date to be considered, according to the legislation, is that of the filing of the opposed application - here 7 August 1997.  A mere possibility of confusion is not enough.  There must be a real and tangible danger of its occurring.  It is accepted law that the risk of deception and confusion must extend to a substantial number of people likely to be concerned in the purchasing of the particular goods or services - Kendall Co v Mulsyn Paint and Chemicals (1963) 109 CLR 300.

There is nothing in the evidence which reveals a reputation for the opponent's mark which may have been generated by any sales of the opponent's goods in Australia by Fossano, or by any other manner.  In any case, I have already found, in relation to s.58. that the lone consignment of goods, which arrived in 1996, has not been convincingly shown to represent sales of goods bearing the opponent's R.NEWBOLD mark in Australia, as that party has not shown if those goods even carried that mark.  Given this, the only thing which the opponent can point to, in relation to the mark having any reputation in Australia, is the advertising in overseas magazines showing the R.NEWBOLD mark, included in its evidence.  However, there is no evidence that would support claims that these magazines, which are mainly of British origin, would have ever been seen by Australian visitors to the UK, or were circulated in Australia.  Even if they had, I doubt that it would have been to the extent necessary for the mark to have achieved any degree of fame in this country - as at the critical date of filing.

Therefore, in my opinion, nothing has been shown with respect to a reputation in this country by the opponent sufficient to cause deception and confusion.  Accordingly, I dismiss this ground of opposition.

Section 42
This section reads:

Trade mark scandalous or its use contrary to law

42.      An application for the registration of a trade mark must be rejected

(a)       the trade mark contains or consists of scandalous matter; or

(b)       its use would be contrary to law.

This ground was not pursued by Mr Strickland at the hearing.  However, it was included in the original notice of opposition and I will make comment on it.  This is because the opponent might wish it to be now considered, given the failure of the ss.58 and 60 legs of opposition.  Despite any inferences which might be drawn from the applicant's adoption of a substantially identical mark to that owned by the opponent for the same goods, I have not been presented with any evidence which might show me that anything unlawful has occurred in relation to the present application for registration of the opposed mark.  In regard to such situations, I refer to the words of Fullagar J. from Aston v. Harlee Manufacturing Co., supra, where, at p.404, he said:

When once it is conceded, as a matter of law, that a person may apply for and obtain in Australia a valid registration of a trade mark registered and used in a foreign country but not used in Australia, I do not think that exceptions and qualifications should be introduced which are based merely on conceptions of commercial ethics.

Also pertinent here are the words of Latham CJ in Seven Up Co v OT Ltd, supra, where he said, at p.216:

The desire to use in Australia a successful trade mark in competition in trade with a person who may come here and who uses that trade mark in another country cannot be described as fraud or as involving any breach of the law.

The Chief Justice then went on to approve the earlier decision of Williams J. where he said, at 211:

In the absence of fraud it is not unlawful for a trader to become the registered proprietor under the Trade Marks Act of a mark which has been used, however extensively, by another trader as a mark for similar goods in a foreign country, provided the foreign mark has not been used at all in Australia at the date of the application for registration.

I agree with Mr Kaye that the most that can be said of the applicant's adoption of the mark here is that it might be accused of sharp business practices - c.f. the situation in the Yanx case - Amalgamated Tobacco Corporation Limited (1951) 82 CLR 199, where Williams J. said, at 202:

To try and register in Australia a word which the applicant to the knowledge of the respondent is using elsewhere on its cigarettes is sharp business practice.  But it is not in itself fraudulent or a breach of the law."

I therefore find that the opponent is also not successful on this ground of its opposition.

Conclusion
I have found that the opponent has not succeeded on any of the grounds relied upon at the hearing of its opposition.  Accordingly, as the delegate of the Registrar, I dismiss the opposition as a whole.  It follows that, subject to any appeal from the decision, the application may now proceed to registration.

Costs
In respect of costs, I can see no reason why they should not follow the result.  Accordingly, I order that the opponent pay the applicant's costs in the matter, in accordance with the Official scale.

Ian Forno
Hearing Officer

5 November 1999