PB Foods Limited v Malanda Dairyfoods Limited

[1998] ATMO 66

TRADE MARKS ACT 1955

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

Re:      Opposition by Malanda Dairyfoods Limited to the registration of trade mark application number 577936 in the name of PB Foods Limited, formerly Peters (WA) Limited

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. Unless otherwise specified, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.

Background

Trade mark application 577936, seeking registration of the trade mark CHOC CHILL for all the goods in class 29, was lodged on 7 May 1992 in the name of the applicant, Peters (WA) Limited, now known as PB Foods Limited (hereafter PB Foods).  The application was endorsed to indicate the applicant’s intention to vary the descriptor CHOC when the mark was applied to goods of other flavours.  The application was accepted for registration in Part B of the Register in respect of “flavoured milk”, on the basis of evidence of use and subject to the entry of a claim to vary endorsement reading

When the mark is used for items in the specification of goods other than CHOCOLATE FLAVOURED PRODUCTS, the word CHOC in the mark will be changed to accord with those other items.

Acceptance was advertised in the Official Journal of Trade Marks on 2 November 1995.

On 2 February 1996, the opponent, Malanda Dairyfoods Limited (hereafter Malanda) lodged a notice of opposition to registration of the trade mark under the provisions of section 49 of the Act.  The grounds of opposition stated in the notice are:

1.   The Opponent is the proprietor of the trade mark CHILL which has been used extensively by it in relation to flavoured milk since February 1992.

2.   The trade mark CHOC CHILL is substantially identical with or deceptively similar to the Opponent’s trade mark CHILL, and because of the reputation of that trade mark the use of CHOC CHILL is likely to deceive or cause confusion.

3.   The proposed endorsements in respect of Application B577936(29) are likely to deceive or cause confusion and indirectly recognize that the word CHOC is inherently unregistrable.

Evidence

The following evidence was lodged in the proceedings:

Evidence in support

• Statutory declaration with exhibit “A”, dated 1 May 1996, by Robert Campbell, Marketing Manager of the opponent company (Campbell’s first declaration).

Evidence in answer

• Statutory declaration with exhibits PMC1 to PMC14, dated 15 January 1997, by Peter McKenzie Clark, Company Secretary of the applicant company (Clark’s first declaration).

• Statutory declaration with exhibits JCN1 to JCN10, dated 15 January 1997 by Jane Cassidy-Norrish, Marketing Manager, Dairy, for PB Foods.

Evidence in reply

• Statutory declaration, dated 14 April 1997, by Robert Campbell (Campbell’s second declaration).

Opponent’s further evidence in support

• Statutory declaration with exhibits “A” to “M”, dated 15 April 1997, by Robert Campbell (Campbell’s third declaration).

Applicant’s reply to further evidence

• Statutory declaration with exhibits PMC1 to PMC3, dated 29 May 1997, by Peter McKenzie Clark (Clark’s second declaration).

Opponent’s further evidence in reply

• Statutory declaration, dated 31 October 1997, by Robert Campbell (Campbell’s fourth declaration).

• Statutory declaration with exhibits “A” and “B”, dated 3 November 1997, by Alice Gay Schroeder, a Media Analyst employed by the opponent.

Applicant’s further evidence

• Statutory declaration with exhibits PMC1 to PMC4, dated 4 December 1997, by Peter McKenzie Clark (Clark’s third declaration).

In his first declaration in support of the opposition, Mr Campbell outlines the opponent Malanda’s adoption of the trade mark CHILL for use in respect of flavoured milk. He describes the marketing strategy which was developed in association with the Malanda’s advertising agency, commencing with a televised product launch on 23 February 1992, followed by a series of promotions and contests through to 1996.  Mr Campbell claims national exposure of the trade mark through sponsorship of the Cowboys Rugby League Football Limited, members of which displayed the CHILL trade mark on their sleeves during televised matches, and through awards achieved by the opponent’s products at the Brisbane, Sydney and Melbourne shows between 1994 and 1996.  Total sales figures for “Chill products” are given as $29,000,000 for the period 1991/92 to 1995/96 with half a million dollars spent on advertising and promotion. There is reference to a registered trade mark for the word CHILLCAN (No. 605103) and to a pending application No. 630247 for the trade mark CHILL FLAVOURED MILK filed on 19 May 1994. More detailed information, media reports and examples of packaging and advertising are included in Mr Campbell’s third declaration.

Mr Clark’s first declaration outlines the history of PB Foods’ adoption of the CHOC CHILL trade mark for its flavoured milk products. Examples of packaging show the use of trade marks CHOC CHILL and COFFEE CHILL and two other trade marks I.C. CHILL and ORIGINAL CHILL which, I note, would not be variations covered by the endorsement required for acceptance of trade mark application 577936.  Details are given of sales ($27,000,000 for the period 1991/92 to 1995/96) and advertising figures (2.4 million dollars) and of the marketing and advertising strategies used to promote products bearing the CHOC CHILL trade mark and its variants. Mr Clark states that while sales and advertising have been substantially restricted to the state of Western Australia, PB Foods always had the intention of expanding sales and promotion under the trade mark to other states of Australia. The declaration by Ms Cassidy-Norrish describes the steps by which the applicant, through its subsidiary Brownes Dairy Pty Ltd, with the services of an advertising agency, settled on the trade mark CHOC CHILL. The marketing potential of a number of marks was assessed and trade mark searches carried out before PB Foods took the decision in late 1991 to proceed with the CHOC CHILL/COFFEE CHILL mark.  Ms Cassidy-Norrish states that at the date of first use of the trade mark on 1 April 1992, and at the time of lodgment of this application for registration on 7 May 1992, use of Malanda’s trade mark CHILL for flavoured milk was unknown to PB Foods.

The further evidence centres on the extent to which each of the parties has used its trade mark outside their respective home states of Western Australia and Queensland. Mr Clark’s second declaration refers to certain investigations carried out on behalf of PB Foods which he claims demonstrate that Malanda’s flavoured milk products have not been marketed in the states of New South Wales and Victoria and that use of the trade mark CHILL on flavoured milk has been limited to Queensland.  Mr Campbell’s fourth declaration and the declaration by Ms Schroeder respond to this assertion by outlining the national exposure which Malanda’s CHILL trade mark achieved outside Queensland.  Mr Campbell says Malanda has sold CHILL flavoured milk throughout Queensland and in the Northern Territory and confirms national exposure by virtue of promotional sports activities.  Mr Clark claims a similar national exposure through sporting sponsorship for PB Foods’ CHOC CHILL trade mark and provides details of its unsuccessful attempt to market its flavoured milk through the Franklins chain of supermarkets in Victoria. 

Other than the Malanda’s unsupported statement claiming to have sold milk products under its CHILL trade mark in the Northern Territory, there is no evidence that either party has sold goods bearing its trade mark outside its state of origin.

Hearing Details

The hearing on the matter was held in Canberra on 6 March 1998.  Mr  Thomas Stevens of Thomas Stevens & Company, solicitors and attorneys of Cairns, represented the opponent, Malanda.  Mr Rolf Van Wollingen of Griffith Hack, patent and trade mark attorneys of Perth, appeared for the trade mark applicant, PB Foods.

Submissions

In opening his submissions Mr Stevens, on behalf of Malanda, claimed that none of the evidence lodged during the opposition proceedings showed that the use of the trade mark CHOC CHILL or its variants, was use by the applicant itself, PB Foods.  He submitted that all the exhibits to the evidence filed by PB Foods show use only by Brownes Dairy Pty Ltd and that, in the absence of direct evidence showing the use by Brownes Dairy Pty Ltd should be attributed to the applicant, the application should not have been accepted.  While this is not listed as a ground of opposition in the Notice of Opposition, it was a matter raised in Malanda’s evidence and was not specifically addressed in PB Foods’ evidence.

Under the provisions of subsection 26(3) of the Trade Marks Act 1955, use of a trade mark by a person other than the applicant could be relied on to demonstrate distinctiveness if that use was under the control of the applicant and an application had been lodged to register that person as a registered user.  At the hearing, Mr Van Wollingen submitted that use by Brownes Dairy Pty Ltd was under the control of PB Foods and should be attributed to        PB Foods. He drew attention to two references to Brownes Dairy Pty Ltd in the evidence. The first is in Ms Cassidy Norrish’s declaration where she refers to the PB Foods’ development of the CHOC CHILL trade mark “through its subsidiary Brownes Dairy Pty Ltd”. The second reference is in Mr Clark’s second declaration where he refers to PB Foods’ participation in the Melbourne and Sydney Royal Shows “through its wholly-owned subsidiary Brownes Dairy Pty Ltd”.

Since Brownes Dairy Pty Ltd is a wholly owned subsidiary, the necessary mechanism did exist for PB Foods to control the use of the trade mark. This would have formed a sufficient basis for registration of Brownes Dairy Pty Ltd as a registered user under the provisions of the 1955 Act if PB Foods had applied to record the registered use.  Mr Van Wollingen drew attention to the discussion of the registered user provisions in the Trade Marks Act 1955, to be found at page 35 of Shanahan’s Australian Law of Trade Marks and Passing Off. He referred to the fact that those provisions had been recognised in the courts as permissive rather than mandatory, and urged that use by PB Foods’ wholly owned subsidiary, which is under the complete control of PB Foods, should be attributed to PB Foods without the formality of an application to record a registered user arrangement. In the circumstances, I am inclined to agree with Mr Van Wollingen’s submissions. The lack of an application to record Brownes Dairy Pty Ltd as a registered user was not brought to attention before the trade mark application was accepted and now provisions for registration of users no longer exist in the legislation. Further, the trade mark legislation now specifically recognises use of a trade mark by a financially controlled body as use by the person exercising that control (see subsection 8(4) of the Trade Marks Act 1995).  Given that the application was lodged with a statement of use indicating that the applicant itself intended to use the trade mark, and that the Company Secretary has made a declaration stating that PB Foods has used the trade mark, and that the person whose name appears on the exhibits has the status of a wholly owned subsidiary of the applicant, I consider that the use described in the evidence may be attributed to PB Foods.

Mr Stevens took his submissions on the matter of use further.  He submitted that even if the use by Brownes Dairy Pty Ltd was attributed to PB Foods, the evidence showed that such use had only taken place in Western Australia and therefore the trade mark should only have been accepted for registration subject to a geographical restriction to that state.  However, I note that the geographically limited extent of use was in fact taken into account when the application was accepted in Part B, rather than Part A of the Register.  On the evidence of use in Western Australia, the examiner considered that the trade mark CHOC CHILL had acquired distinctiveness sufficient for registration in Part A only if the rights were restricted to that state.  But she also considered that if the use continued throughout Australia to a similar extent, the mark CHOC CHILL was capable of becoming distinctive in the other states and, on that basis, the trade mark was accepted for registration in Part B without geographical limitation. 

Mr Stevens directed his further submissions to the first and third of the grounds stated in the notice of opposition. Firstly, he argued against the form of endorsement applied to the acceptance of the application, the so-called claim to vary which he claimed extends the rights of registration to altered forms of the trade mark. He then stated Malanda’s case for proprietorship on the basis of prior use of the trade mark CHILL.  Apart from his assertion that the use described in PB Foods’ evidence was actually use by Brownes Dairy Pty Ltd, which I have already dealt with above, Mr Stevens did not challenge the evidence.  He conceded that it showed that both parties had adopted these marks honestly and used them in good faith, suggesting there could be a case for registration limited to Western Australia on the basis of honest concurrent use by PB Foods’ subsidiary, Brownes Dairy Pty Ltd.

Mr Van Wollingen’ s submissions were broadly directed to challenging Malanda’s claim to proprietorship. He argued that the use of Malanda’s CHILL trade mark had been limited to Queensland, principally the far north of Queensland, and any national exposure through sporting sponsorship was not use in the course of trade. He also argued that the trade mark was not the same mark for which PB Foods sought registration and any use by Malanda could not therefore displace PB Foods’ claim to proprietorship under section 40 of the Act.  Mr Van Wollingen concluded with submissions on the possibility of applying the honest concurrent user provisions of section 34(1) in PB Foods’ favour.

The claim to vary endorsement

In his submissions Mr Stevens challenged the Registrar’s authority to accept an application subject to an endorsement of the kind applied to this application, the so-called “claim to vary”.  He submitted that “there is no provision in the Act to enable a mark to be changed, at the whim of the proprietor, to substitute other descriptive or non-descriptive words”.  But he is wrong, in part at least.  Subsection 44(1) of the Act empowers the Registrar to impose “such conditions or limitations as he thinks fit” when accepting an application for registration.  Chapter 12 of Shanahan’s Australian Law of Trade Marks and Passing Off describes the variety of conditions and limitations which have been applied to applications lodged under the 1955 Act and specific reference is made to “claims to vary” on page 214. Mr Shanahan thus demonstrates a long standing practice of the Registrar to allow certain descriptive matter which appears in a trade mark to be changed so that the trade mark can be applied appropriately to various goods nominated in the specification.  This can only be allowed where the substitution of another word or words does not result in a change to the identity of the trade mark.  Mr Stevens is right in that it must not “enable a mark to be changed, at the whim of the proprietor”.  The matter which is changed must be so clearly descriptive that it is not, separately, the subject of any trade mark rights.

PB Foods proffered a claim to vary endorsement on lodging this application for registration, indicating its intention to vary “the descriptor CHOC appearing in the mark” when the mark is applied to goods of other flavours.  The examiner proposed an amendment to the wording of the endorsement which, in its final form, makes it clear that the word CHOC will only be used in the mark when it is applied to “chocolate flavoured products”. This clearly establishes the word CHOC as a description of the flavour of the goods. When applied to products of other flavours such as coffee, strawberry and vanilla, the endorsement would require the trade mark to be used in the forms COFFEE CHILL, STRAWBERRY CHILL and VANILLA CHILL. The trade mark CHOC CHILL may appear, at first sight, to be in a different category from the other variants listed here.  However, CHOC is listed in both the Macquarie Dictionary and the Oxford English Dictionary as an abbreviation for chocolate, with attributive usage in combinations such as choc-ice and choc-bar.  It can therefore be considered as an ordinary descriptive term like the other descriptors COFFEE, STRAWBERRY and VANILLA.

Proprietorship of the trade mark – section 40

It is Malanda’s submission that because of its prior public use of the trade mark CHILL in relation to goods the same as the specified goods, PB Foods could not claim to be the statutory proprietor of its mark CHOC CHILL at the date of lodgment of this application. Mr Stevens pointed out that Malanda’s date of first use of the mark, 23 February 1992, has not been disputed and is earlier than the date of 1 April 1992 when PB Foods first used its CHOC CHILL trade mark, and earlier than the date of 7 May 1992 when application 577936 was lodged.  Mr Stevens referred to a number of the authorities on proprietorship for the purposes of subsection 40(1) - Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457, Carnival Cruise Lines v Sitmar Cruises Limited (1994) AIPC ¶91-049, Seven-Up Co v O.T. Limited (1947) 75 CLR 203 and “Thunderbird” Trade Mark (1974) 131 CLR 592 - all of which he claims support Malanda’s position.  The common principle that comes from all these cases is that the first person who uses a trade mark within Australia becomes the proprietor of that trade mark and, to this end, any trade use at all in the Australian market is sufficient.

However, to establish prior use, the mark used by the opponent must be the same as, or at least substantially identical to the mark in question.  In Carnival Cruise Lines v Sitmar Cruises Limited (1994) AIPC ¶91-049 Gummow J confirmed this. With reference to The Shell Company of Australia Limited v Rohm and Haas Company (1949) 78 CLR 601, his Honour says:

When the decision is understood in this way, it 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” as it appears in s62……requires a total impression of similarity to emerge from a comparison between the two marks.

The comparison to be made in making the assessment of “substantial identity” is that described by Windeyer J in Shell Co of Australia Ltd v Esso Standard Oil (australia) Ltd (1963) 109 CLR 407 where he stated:

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features …… and the total impression of resemblance or dissimilarity that emerges from the comparison ...

The first question which I must determine, then, is whether or not the trade mark CHILL, which has been used by Malanda, is identical or substantially identical to the subject mark CHOC CHILL and its variants COFFEE CHILL, STRAWBERRY CHILL, VANILLA CHILL and so on.  Mr Van Wollingen, while conceding that the marks may be “deceptively similar”, maintains that they are clearly not identical and are not even “substantially identical”.  In support of this submission he referred to a number of decided cases concerning proprietorship. Those in which the trade marks under consideration had been found to be substantially identical were all concerned with word marks which differed only in spelling. (POLYKEN and POLYKIN (Kendall Co v Mulsyn Paint & Chemicals (1963) 109 CLR 300); DAIMER and DAIMARU (Daimer v Daimaru (1993) 27 IPR 124); and DERMAFILM and DERMOFILM (Warner-Lambert Co v Harel (1995) 32 IPR 189))

However, Mr Van Wollingen maintains that where one of the two marks included another word or device they were usually found not to be substantially identical, even when the common word was a prominent feature of both marks.  This, he says, is the case here, where the word CHILL has been used as a trade mark by Malanda and PB Foods’ trade mark also consists of that word in combination with a flavour descriptor such as CHOC.  He submits that the flavour descriptor forms an essential and memorable part of the mark leading to a total impression of dissimilarity when the two marks are compared.  He cited the following examples from decisions of the court and the Registrar where word marks were not found to be substantially identical: DOOPA and ZOOPER DOOPER (Tavefar Pty Ltd v Life Savers (Australasia) Ltd (1988) 12 IPR 159); BODYLINE and THE BROT BODYLINE (Bodyline Cosmetics Ltd v Brot Bodyline (1993) 27 IPR 315); FUN SHIP and SITMAR’S FUNSHIP and FAIRSTAR THE FUNSHIP (Carnival Cruise Lines Inc v Sitmar Cruises (1994) 20 ALR 495); SPICER and HARDY SPICER (Unidrive Pty Ltd v Dana Corporation (1995) 32 IPR 155; and SIZZLER and MEXICANA SIZZLERS (Sizzler Restaurants International Inc v Grater Seven Pty Ltd (1996) 38 IPR 201.

I do not consider that any of these examples lend support to Mr Van Wolligens argument.  In each of the first three examples, the word which has been added to the basic trade mark could possibly be a registrable feature in its own right and the combinations create a quite different impression from the words DOOPA, BODYLINE and FUN SHIP on their own.  In comparing SPICER and HARDY SPICER the hearing officer noted that while each mark contained the surname SPICER, the second mark contains another surname HARDY which is an equally memorable portion of the mark. The last comparison comes closer as the word MEXICANA may be seen as implying a Mexican style or flavour of food.  However, MEXICANA is not defined in either the Macquarie or Oxford English Dictionaries and clearly does not perform the explicit and straightforward descriptive function of a term such as CHOC or COFFEE or any other of the flavour descriptors which PB Foods is entitled to use in its trade mark.  While it conveys a strong allusion it is also somewhat emotive and therefore significantly more memorable than words like CHOC or COFFEE.

When the side by side comparison is made between the mark CHILL, used by Malanda, and the application trade mark it is not a simple one to one comparison. PB Foods’ mark is not simply CHOC CHILL.  PB Foods has chosen to file its mark as one which will be varied in use and in doing so has made it clear that the essential feature of its trade mark is the word CHILL which is used with a purely descriptive variable feature. In selecting the goods, a prospective purchaser will therefore recognise the word CHILL as the badge of origin and will see the word CHOC or COFFEE or STRAWBERRY or VANILLA as nominating nothing more than the flavour of the product.  When considered in this light, it seems to me that the comparison between CHILL and CHOC CHILL does lead to a “total impression of similarity” and the proprietorship claim is supported.

In his submissions, Mr Van Wollingen has suggested that if I should find that the issue of proprietorship can be raised, there are further considerations I should take into account before deciding in Malanda’s favour.  These concern what he describes as the “minimal and isolated prior use” of the mark made by Malanda before lodgment of this application. He refers to the discussion in Shanahan’s Australian Law of Trade Marks and Passing Off at page 157.  There Mr Shanahan suggests that in a case of conflicting proprietorship, where the mark in question is not a well known foreign mark and no question of “piracy” is raised, the courts may be prepared to reject some “trifling or isolated prior usage as de minimus, abandoned or unsubstantiated”.  Mr Van Wollingen puts the use made by Malanda into this category because of its short duration and limited geographical extent. He points out that Malanda’s use commenced only six weeks before PB Foods’ first use and eleven weeks before lodgment of this application and, further, Malanda’s use during that period did not extend beyond northern Queensland.  While I agree that use made after the date of lodgment of application 577936 is not relevant in determining the rights of the parties at that date, the fact that Malanda continued and extended its use shows that the use was far from “isolated” or “abandoned”.  I hold that the precedents on the acquisition of proprietorship, referred to above, apply and Malanda has established its claim to proprietorship at the date of lodgment of this application.

Deception or confusion - section 28

The opponent did not pursue the second ground of opposition which relied on section 28 of the Act. The relevant paragraphs of the section are

28.  A mark -

(a)  the use of which would be likely to deceive or cause confusion
       ….; or
(d)  which would otherwise be not entitled to protection in a court of justice,

shall not be registered as a trade mark.

To succeed on this ground Malanda would first need to show that at the date of lodgment of the application, the reputation developed in its unregistered trade mark CHILL was such that use of the application trade mark was likely to result in deception or confusion.  At that date Malanda had only used its trade mark for a period of about eleven weeks, with limited exposure, so it would be hard pressed to make a case under section 28(a).  Further, as confirmed by Heerey J. in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd, (1997) 38 IPR 495, sections 28(a) and 28(d) are to be read conjunctively and it would be necessary for Malanda to demonstrate that PB Foods’ conduct in adopting the trade mark CHOC CHILL was wrongful or blameworthy. Malanda has made no such claim.

I find the opposition fails on this ground.

Honest concurrent use or other special circumstances - section 34(1)

In their submissions, both Mr Stevens for the opponent and Mr Van Wollingen for the applicant have canvassed the possibility of concurrent registrations subject to geographical restrictions. Mr Stevens expressed the view that on the basis of the evidence as he interpreted it, Brownes Dairy Pty Ltd might, on lodgment of a new application, be able to achieve registration limited to Western Australia under the provisions of section 44(3) of the Trade Marks Act 1995.  Mr Van Wollingen, on the other hand, has proposed that there is a case for registration of FB Foods’ current application on the grounds of honest concurrent use or other special circumstances under section 34(1) of the 1955 Act. He maintains that on this basis PB Foods’ trade mark should be allowed to proceed to registration for the whole of Australia with the possible exclusion of the state of Queensland where Malanda has demonstrated its use. Malanda’s application No. 630247 for the trade mark CHILL FLAVOURED MILK should then, he suggests, be considered on its merits and might achieve registration under section 44(4) of the Trade Marks Act 1995. Mr Van Wollingen claimed there was precedent for such a course of action from the Registrar’s decision in Olin Corp. v Pacemaker Pool Supplies ((1984) 4 IPR 526) where the applicant’s mark OLIN PACE had become well known throughout Australia while the opponent’s unregistered mark PACE was limited essentially to Western Australia. The applicant was granted an Australia-wide registration endorsed to the effect that registration in Western Australia has been granted on the basis of honest concurrent user under section 34(1).

The criteria to be considered is assessing an application in terms of subsection 34(1) are set out in Re John Fitton & Co Ltd’s Application (1949) 66 RPC 110. There are six main points which I will consider in turn

• the honesty of the concurrent use,

• the extent of the use in area duration and volume,

• the degree of confusion likely to ensue,

• whether any instances of deception have occurred,

• the balance of inconveniences, and

• the effects of any terms or conditions that may be imposed. 

Honesty of the concurrent use

The evidence indicates that both the applicant and the opponent adopted their marks independently and commenced use within about five weeks of one another.  Ms Cassidy Norrish declares to this in her declaration where she states that PB Foods only became aware of Malanda’s use of its trade mark in Queensland about six months after filing this application. I do not find that any doubt has been raised about the honesty of the concurrent use.

The extent of use

The relevant date for considering concurrent use is the date of filing the application for registration.  At that date, 7 May 1992, PB Foods had only been using its trade mark CHOC CHILL for about five weeks and Malanda had been using its mark for about eleven weeks.  In this short period, the volume of sales was also limited and the use by PB Foods was confined to Western Australia and by Malanda to northern Queensland.  Very little weight can therefore be placed on this factor if the case is considered solely as one of concurrent use. 

The likelihood of confusion and instances of confusion

Given the substantial identity of the two trade marks and the fact that they are used on identical goods, there is a strong probability of confusion if the trade marks were to be used in the same market areas. There were no instances of confusion in the very short period before lodgment of this application and none during the more than six years to date. This is not surprising since PB Foods’ use has been confined to a market geographically remote from the market in which Malanda has sold its flavoured milk.  If the use continued to be confined to these widely separated locations the likelihood of confusion would remain at a very low level.  However, both the PB Foods and Malanda seek Australia-wide registration.

The balance of inconveniences

Both the applicant and the opponent have made substantial investments in the sales and promotion of flavoured milk under their trade marks although I note that most of this marketing activity has taken place after the lodgment of this application. The evidence shows that the total sales claimed by each party are very similar in value although PB Foods claims to have spent about four times as much on advertising and promotion. Both parties claim that they wish to extend their use to other states of Australia. Mr Van Wollingen submits that Malanda would not be disadvantaged if PB Foods was granted Australia-wide registration as it would be protected from infringement proceedings by section 124 of the Trade Marks Act 1995 in view of its prior use of the trade mark CHILL, and might also be entitled to obtain registration of its trade mark CHILL FLAVOURED MILK, Application No 630247, under sub-section 44(4) of the Trade Marks Act 1995. This is a surprising submission since it appears to concede that Malanda does have the right of proprietorship in the trade mark and yet suggests that PB Foods should still be accorded registration.  I do not think either party has a clear claim to be more inconvenienced than the other if they were unable to continue use of their marks.

Any conditions or limitations

The history of the adoption and concurrent use of the two trade marks for more than six years, shows that the trade marks could co-exist without confusion or conflict if they continued to be used in the widely separated areas where they have been used to date.  This could be achieved by the imposition of mutually exclusive geographical limitations on their use but as each party wishes to extend the area of use of their trade marks I must consider, in respect of the matter before me, what, if any, geographical limitation might be fair and reasonable to impose on the subject application.

Other special circumstances

On reviewing the criteria for the application of subsection 34(1) for honest concurrent use, I have to reach the conclusion that the period of concurrent use, which must be considered at the date of lodgment of the application, is too short to provide a sufficient basis on its own to allow the applicant’s mark to proceed. However, I am also entitled to consider whether there are any other special circumstances which might have an effect. I consider that Malanda has established its claim to proprietorship because of its prior use in Australia of its trade mark CHILL. On that basis alone, I would have to refuse to allow this application for the substantially identical trade mark CHOC CHILL, and its variants, to proceed to registration. The special circumstances which I think I am entitled to take into account are the very short period separating commencement of use by Malanda and PB Foods, and the similar extent of the independent use they have made of their marks in distantly separated regions. I consider that if I refuse to allow this trade mark to proceed, it is likely that Malanda’s application 630247, against which this application has been cited, may proceed to acceptance. PB Foods could then re-apply and, on the basis of its use in the state of Western Australia during the last six or seven years, is likely to obtain an acceptance limited to that state under section 44(3) of the Trade Marks Act 1995. I consider that these are special circumstances which allow me to exercise my discretion under section 34(1) and I am prepared to allow this application to proceed to registration subject to the following limitation:

Registration of this trade mark is limited to the State of Western Australia   

I am aware that PB Foods is claiming registration throughout Australia, but unlike the situation in Olin Corp. v Pacemaker Pool Supplies (supra) where the applicant Olin Corp had established a reputation in its trade mark throughout Australia, I do not consider that PB Foods has demonstrated any use of the application trade mark outside Western Australia.

Decision

I have found that the opponent Malanda Dairyfoods Limited has succeeded in its claim to prior use of a trade mark which is substantially identical to the application trade mark and has therefore displaced the applicant PB Foods Limited’s claim to proprietorship of its trade mark CHOC CHILL in Australia.  However, in the special circumstances of the use of the conflicting trade marks by the opponent and the applicant, I am prepared to register this application under the provisions of section 34(1) provided that the applicant agrees to a limitation of the registration to the State of Western Australia.

Accordingly, unless the applicant indicates its agreement to this territorial limitation of registration, within two months of the date of this decision, the application will be refused.

Costs

Insofar as each party has been to some extent successful in this action, I consider that they should bear their own costs.

Helen R. Hardie

Deputy Registrar
15 December 1998