Perfect Fit Industries, Inc v Domingo so Pensaloza and Rong Ping Tang

[2018] ATMO 111

TRADE MARKS ACT 1995

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

Re:Opposition by Perfect Fit Industries, Inc to registration of trade mark application 1777442 - PFB (stylised) in the name of Domingo So Pensloza and Rong Ping Tang

Delegate:

Cristy Condon

Representation:

Opponent: Kelvin Lord of Lord and Company Patent and Trade Mark Attorneys

Applicant: Not represented

Decision:

2018 ATMO 111

Trade Marks Act 1995 (Cth) – opposition under s 52 – ss 44, 60 and 62A – no grounds established; Trade Mark will proceed to registration

Background

1.     Domingo So Pensaloza and Rong Ping Tang (‘the Applicant’) filed an application to register a trade mark under the provisions of the Trade Marks Act 1995 (‘the Act’) on 16 June 2016.

2.     Relevant details of that trade mark application are:

Trade Mark No. 1777442

Trade Mark: (‘the Trade Mark’)

Specification of Goods:

Class 7: Ball-bearings; Bearings (parts of machines); Bearings for transmission shafts; Self-oiling bearings; Anti-friction bearings for machines; Gears, other than for land vehicles; Belts for machines; Driving belts for machines

(‘the Applicant’s Goods’)

1. The trade mark application was examined as required under s 31 of the Act. Acceptance of the Trade Mark was advertised in the Australian Official Journal of Trade Marks on 10 November 2016.

   4.     The Opponent filed a Notice of Intention to Oppose on 5 January 2017 and subsequently filed an adequate Statement of Grounds and Particulars (‘SGP’) on 7 March 2017 (collectively forming ‘the Notice of Opposition’). On 7 April 2017 the Applicant filed a Notice of Intention to Defend (‘NID’).

2. In due course the Opponent filed evidence in support of the opposition.

3. On 4 December 2017 the Opponent requested a hearing. The matter came before me, a delegate of the Registrar of Trade Marks, on 19 June 2018 in Canberra. Kelvin Lord of Lord and Company, on behalf of the Opponent, made oral submissions which supplemented his written submissions. The Applicant was not represented at the hearing and it did not file any written submissions.

   Grounds of Opposition and Onus

4. The Notice of Opposition specifies grounds of opposition under ss 44, 60 and 62A of the Act.

5. The Opponent bears the onus of establishing a ground of opposition.[1] The standard of proof is the ordinary civil standard of the balance of probabilities.[2]

   9.     The date at which the rights of the parties are to be determined is 16 June 2016, being the filing date of the application.

   Preliminary Matters

   10.   The Opponent filed its written submissions 9 days later than I had advised in my schedule of submissions email.[3] Thus, I received these submissions 2 working days before the oral hearing.

   11.    The Applicant has not participated in these opposition proceedings beyond filing the NID, so I have allowed the Opponent’s written submissions and in the interest of procedural fairness, I also allowed the Applicant a further 5 days to consider and respond in writing to the Opponent’s submissions. The Applicant did not file any written submissions.

   12.   At the beginning of the oral hearing the Opponent’s representative explained that the evidence and the written submissions filed in this opposition related to an earlier opposition matter for trade mark application number 1684767 . That matter involved the same parties but it did not proceed past the SGP stage because the Applicant did not file the NID. This trade mark is currently in the status ‘lapsed-accepted’.

   13.   Nine days after the hearing, on 28 June 2018 I received a telephone call from the Opponent’s representative who asked me whether I would accept further written submissions from the Opponent. I declined the request whereupon Ms Zhi Ling Zeng who was calling on behalf of Mr Kelvin Lord, said that due to the Applicant not participating in the opposition proceedings since filing the NID Mr Lord had question to consider the legitimacy of the company name and address on the Applicant’s Australian address for service as it appears on the NID.

   14.   In the interest of brevity, I note that an applicant has no obligation to participate in an opposition proceeding beyond filing a NID. That said, the address for service is in the name ‘GBIP Limited’ and it may be a business name or a company name. However, the question of the validity of the company name and address for service is not relevant given the grounds of opposition pursued by the Opponent.

   Evidence

   [1] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58 [32].

   [2] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156 [132].

   [3] I note also that the Opponent did not request additional time to file its submissions.

6. The parties rely on the following evidence:

   Evidence in support

   • Declaration of John Philip Cali (President of Perfect Fit Industries, Inc.) made on 17 July 2017 with Exhibit PF1 (‘Cali Declaration’)

   16.   The Cali Declaration claims the following, noting that it relates to a different opposition proceeding and it is missing words (and for that matter includes additional words e.g. ‘in the our mark’):

   “…

   2. Our trademark is a "well-known" trademark entitled to Australian and international convention.

   3. The mark being applied for by applicant is confusingly similar to our trademark, as to likely, when applied to or used in connection with the goods of applicant, to cause confusion, mistake and deception on the part of the purchasing public.

   4. The registration and use by applicant of the PFB Bearing mark will diminish the distinctiveness and dilute the goodwill of our PFI Bearing mark.

   5. 9 of 10 letters in applicant's mark are present in our mark, and in the same sequential position, as follows:

   Our mark:  Applicant's mark:

   PFI BEARING  PFB BEARING

   Hence, both marks "look" very much alike when viewed from a distance.               Even the font used and the blue color scheme in both marks are similar.

   6. Both marks have two nearly identical components, namely:

   PFI BEARING     for PFI

   PFB BEARING     for applicant

   The first components PFI and PFB are nearly identical in spelling,               appearance and pronunciation, save for the different last letter l/B. The              second components BEARING and BEARING are identical.

   7. The only difference in the applicant's mark is the use of the third letter B (PFB) vis-à-vis the third letter I (PFI) in the our mark. The applicant's substitution of the letter I is a clever, malicious and intentional, ploy to avoid the appearance of confusion. Nevertheless, it can be seen from the foregoing that the potential for confusion is real.

   8. Due to their near-identity in spelling and components, the two (2) marks are phonetically alike. There is hardly any difference in their sound and pronunciation, as well as appearance. Applying the test of "idem sonans", the applicant's mark is similar aurally to our mark; hence the likelihood of confusion.

   9. In the case of the our mark and the applicant's mark, the marks are nearly identical in the light of the following facts:

   1. Visually

   2. The identical sequence of 8 of 9 letters (PF_ BEARING)

   3. Phonetically

   4. Aurally

   As such, the two (2) marks are, for all intents and purposes, practically identical and confusingly similar. It is very easy to mistake applicant's products bearing the mark for our goods bearing the mark. Hence, the use and registration of the mark will create confusion, mistake and deception in the minds of the purchasing public.”

   Discussion and Reasons

   17. As indicated above, the Trade Mark has been opposed on the grounds pursuant to ss 44, 60 and 62A of the Act. At the end of the oral hearing I gave the Opponent my decision in respect of the ss 60 and 62A grounds of opposition. I reserved my decision with respect to the s 44 ground of opposition. For that reason I will start with a discussion of the s 44 ground.

   Section 44

   18. Section 44 of the Act relevantly provides:

   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)  it is substantially identical with, or deceptively similar to:

   (i)  a trade mark registered by another person in respect of similar goods or closely related services; or

   (ii)  a trade mark whose registration in respect of similar goods or closely related services 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 or closely related services.

   19.   The Opponent must establish that the Trade Mark is substantially identical with, or deceptively similar to, another trade mark/s with an earlier priority date, in the name of a person other than the Applicant, in respect of similar goods or closely related services. 

   20. The SGP cited two trade mark registrations (‘the Opponent’s trade marks’) in support of the section 44 ground of opposition which are:

   Trade mark:  (‘the Bearing trade mark’)

   Trade mark no: 1391350

   Filing Date:  27 October 2010

   Specification:  Class 12: Bearings for use in the automotive industry

   Trade mark:  (‘the PFI trade mark’)

   Trade mark no: 858177

   Filing Date:  24 November 2000

   Specification:  Class 7: Bearings for industrial use and bearings for use in the automotive industry

   21.   The Opponent is the registered owner of the above trade marks. These trade marks have earlier priority dates than that of the Trade Mark.

   22.   The Bearing trade mark and the PFI trade mark cover the same goods as the Applicant’s Goods; namely bearings. I find the remaining Applicant’s Goods are similar to the bearings claimed in the Opponent’s trade marks.

   23. Thus, the Opponent has established 2 of 3 criteria needed to make out the s 44 ground of opposition.

   24.   The last issue to be decided under this ground is whether the Trade Mark is substantially identical or deceptively similar to either of the Opponent’s trade marks.

   Substantial Identity

   25.   The Opponent submits that the Trade Mark is substantially identical to both of the Opponent’s trade marks.

   26.   The relevant and often quoted test for determining whether trade marks are substantially identical is set out by Windeyer J in Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (‘Shell’):

   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 of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. [4]

   [4] [1963] HCA 66, [12].

   27.   For the ease of a side by side comparison, I have reproduced the Trade Mark and the Opponent’s trade marks again below:

Opponent’s trade marks Trade mark

28.   Taking account of the similarities and differences in the above trade marks, I am satisfied the Trade Mark is not substantially identical to the Bearing mark or the PFI trade mark according to the side-by side test set out by Windeyer J. in Shell.

29.   In the case of the Opponent’s PFI trade mark, it comprises of 3 highly stylised letters within a rounded parallelogram border. These letters are rendered in a font that makes it quite difficult to identify that the letters are P.F.I. The Trade Mark comprises the stylised letters PFB, that is, it contains the letter ‘B’ at the end rather than a letter ‘I’.

30.   I am satisfied that the Trade Mark is not substantially identical to the PFI trade mark.

31.   In the case of the Opponent’s Bearing trade mark, this trade mark includes the letters ‘P’ and ‘F’ which are also part of the Trade Mark but this is where any similarity between these marks ends. The Bearing trade mark also includes the word ‘BEARING’ and other elements which include the Opponent’s PFI trade mark.

32.   Consequently, I am satisfied that the Trade Mark is not substantially identical to the Bearing trade mark.

33.   My next consideration is whether the Trade Mark is deceptively similar to either or both of the Opponent’s trade marks.

Deceptively similar

34. Section 10 of the Act defines a ‘deceptively similar’ trade mark as:

[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.

35.   In the New Zealand case of Pioneer Hi-Bred Co v Hyline Chicks Pty Ltd, Richardson J explained the concepts of ‘deceive’ and ‘cause confusion’ as follows:

‘Deceived’ implies the creation of an incorrect belief or mental impression and ‘causing confusion’ may go no further than perplexing or mixing up the minds of the purchasing public. Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that goods bearing the applicant’s mark come from some other source and confused to being caused to wonder whether that might not be the case.[5] 

[5] [1979] RPC 410, 423.

36.   Moreover, all of the surrounding circumstances are relevant to the consideration of deceptive similarity:

You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods.[6]

[6] Pianotist Co.’s Application (1906) 23 RPC 774, 777.

37.   Lastly, when considering whether the respective trade marks are deceptively similar they must not be looked at side by side. The established tests say the comparison ‘is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant’s trade mark’[7].

[7] Shell [1963] HCA 66 [13].

The PFI trade mark

38.   With the above authorities in mind and as discussed above, I find that the Trade Mark consists of three letters being ‘PFB’ in a stylised form. However, the PFI trade mark consists of the three letters, in a distinctly stylised form such that they may not be immediately recognised as P.F.I, but even if they were recognised as the letters P.F.I. it is clearly not the Trade Mark. In the context of the Trade Mark, I think it is very unlikely that the letter ‘B’ would be mistaken for the letter ‘I’. These letters are not visually similar. Nor is a letter ‘B’ likely to be slurred in the pronunciation of the Trade Mark and I think this is because ‘PFI’ and ‘PFB’ are not words, nor are they capable of pronunciation as a word. I am satisfied that these trade marks would be pronounced as letters.

39.   The overall impression of the trade marks is different. As I have said above, the ‘PFI’ trade mark is not obviously the letters P.F.I. I doubt potential purchases (without prior knowledge) would glean the letters P.F.I. from the PFI trade mark. Accordingly, there are aural and visual differences in the trade marks.

40.   For the reasons given above, I am satisfied that the Trade Mark is not deceptively similar to the Opponent’s PFI trade mark.

The Bearing trade mark

41.   The Bearing trade mark consists of the letters ‘PFI’ and the word ‘BEARING’ as well as the Opponent’s PFI trade mark (as a small part of the larger Bearing trade mark). The Bearing trade mark is not restricted to colour so depending on how it is used in the marketplace it may appear to have no coloured line divisions.

42.   In my opinion, the additional material in the Bearing trade mark renders it less similar to the Trade Mark than the PFI trade mark.

43.   The Opponent submits that the letter ‘B’ in the Trade Mark is highly likely to stand for the word BEARING. This is speculative and not a sufficient basis from which I could conclude that the overall impression of the Trade Mark and the Bearing trade mark would lead to confusion.

44.   For the reasons above, I am satisfied that the Trade Mark is not deceptively similar to the Opponent’s Bearing trade mark, nor is it deceptively similar to the Opponent’s PFI trade mark. The likelihood of deception or confusion is a mere possibility, rather than a real and tangible danger.

45. The ground of opposition under s 44 of the Act has not been established.

The ss 60 and 62A grounds of opposition

46. The Trade Mark has also been opposed under s 60 of the Act on the basis that the Opponent’s trade marks had acquired a reputation in Australia and because of this reputation use of the Trade Mark would result in confusion.

47. The Trade Mark was opposed under s 62A of the Act on the basis that the trade mark application was made in bad faith.

48.   Exhibit PF1 is the only exhibit to the Cali declaration and relevantly provides:

In connection with Perfect fit Industries, Inc.'s (PFI) opposition to the registration of PFB Bearings In Australia under registration No. 1777442,we offer the following information:

1) HI-Roll Bearings Pty Ltd. has been continuously importing and distributing PFI bearings in Australia and New Zealand since 2002 to present.

2) HI-Roll 'Bearings Pty Ltd. distributes PFI bearings throughout the Australian and New Zealand markets, having invested in substantial stock of PFI Bearings over the past 13 years.

3) Due to our long-term and persistent hard work promoting PFI Bearings, the PFI trademark has established a high-quality reputation in the Australian and New Zealand markets in connection with all bearings manufactured by PFI.

4) The PFI trademark has been in use continuously in Australia and New Zealand since 2002 as a high quality Super Precision Bearing product and precedes by many years the priority date of the opposed application.

5) Mr. Domingo Penaloza has registered the PFB Bearings trademark No. 1777442 to create confusion in the minds of consumers in the Australian market.

6) Mr. Domingo Penaloza is attempting to register the PFB Bearing trademark to compete directly with PFI products and HI-Roll Bearings Pty Ltd, by utilizing the good reputation PFI has already established in Australia and New Zealand.

7) PFB Bearings are being sold in Australia as an “economy" brand, damaging the business and quality image of Perfect Industries, Inc. and HI-Roll Bearings Pty Ltd in Australia.

8) Mr. Domingo Penaloza has in the past had business relations with HI-Roll Bearings Pty Ltd, and this relation ceased 3 years ago due to commercial disagreements between the parties.

9) Mr. Domingo Penaloza is aware that HI-Roll has imported and distributed PFI bearings in Australia and New Zealand for many years, and his registration of the PFB Bearings mark is intended to harm HI-Roll Bearings Ptv Ltd directly by creating confusion in the market as to who the authorized distributor of PFI Bearings is.

Given the foregoing, I respectfully request that Perfect Fit Industries, Inc.'s (PFI) opposition of Mr. Domingo Penaloza's registration No.1777442 be accepted.

49. Having regard to the above claims I say that the evidence filed in these proceedings falls seriously short of the type of cogent evidence needed to establish that an opponent has a reputation in a trade mark as required under s 60(a) of the Act and it does not come close to satisfying s 62A of the Act.

50.   The contents of the Cali declaration and Exhibit PF1 (leaving aside that these documents refer to lapsed-accepted trade mark application number 1684767, that is, not the Trade Mark) do not contain any sales information, product brochures, market surveys or other contemporaneous evidence that would support the Opponent’s claims. In this regard, I refer to the words of Yates J in Qantas Airways Limited v Edwards[8] where he talked about reputation and indicated the type of evidence required:

In McCormick & Co Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335 (McCormick), Kenny J quoted with approval the following observations of Hearing Officer Thompson in Hugo Boss AG v Jackson International Trading Company Kurt D Bruhl Gesellschaft mbH & Co KG (1999) 47 IPR 423; [1999] ATMO 23 (Hugo Boss) at 436 with respect to the nature of the reputation of which s 60 of the Act speaks:

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.

[8] [2016] FCA 729, [141].

51. In terms of the s 62A ground of opposition bad faith is a very serious allegation and mere assertions of relationships between the respective parties and allegations of bad faith fall seriously short of conduct which could be described as ‘unscrupulous, underhand or unconscious behavior.[9] 

[9] Fry Consulting Pty Ltd v Sports Warehouse (No 2) [2012] FCA 81 [164]. per Dodds-Streeton J; see also DC Comics v Cheqout Pty Ltd [2013] FCA 478 [62].

52.   In the absence of any other contemporaneous evidence I am not satisfied, on the balance of probabilities that the Opponent’s allegations demonstrate that the Applicant acted in bad faith.

53. I am satisfied that the Opponent has not established the ss 60 or 62A grounds of opposition.

Decision

54. Section 55(1) of the Act relevantly provides:

(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.

55.   The Opponent has not established a ground of opposition. Accordingly trade mark application number 1777442 may proceed to registration one month from the date of this decision.

56.   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 decided or discontinued and that the disposition of the applications should be in accordance with the Court’s order or direction.

Cristy Condon

Hearing Officer

Hearings and Oppositions

11 July 2018