Pineapple Trademarks Pty Ltd v Brent Lloyd Morely & Emma Kathleen Clancy

[2007] ATMO 81

TRADE MARKS ACT 1995

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

Re:Opposition by Pineapple Trademarks Pty Ltd to registration of trade mark application 1046043(25, 28) - DIRTY KUSTOMS INDUSTRIES - filed in the name of Brent Lloyd Morley and Emma Kathleen Clancy.

Delegate:

Alison Windsor

Representation:

Opponent:  Gary Nock and Angela Dahlke of Cullen & Co, Patent and Trade Mark attorneys

Applicant:  Did not appear, and did not provide submissions

Decision:

2007 ATMO 81

S52 opposition:  1. Section 44– trade marks deceptively similar to opponent’s registrations for the same goods– opposition established.

2.  Costs awarded against the applicants.

Background

1. Brent Lloyd Morley and Emma Kathleen Clancy (“the applicants”) jointly applied for a trade mark, current details of which are shown below:

Trade mark number:     1046043

Filing date:  14 March 2005

Good specification:  Class 25:  Hats, beanies, jeans, jumpers, T-shirts, skateboard apparel, shoe, belts

Class 28:Skateboards, skateboard accessories, surfboards, surfboard accessories

Trade mark:  Dirty Kustoms Industries              (“the trade mark”)

1. The application was examined and advertised as accepted for possible registration on 14 July 2005.  On 10 October 2005, Pineapple Trademarks Pty Ltd (“the opponent”) filed notice of opposition.  The service of evidence required by the Trade Marks Act 1995 (“the Act”) and its Regulations was completed by May  2006 and the matter came before me, as a delegate of the Registrar, in Brisbane on 26 July 2007.  The opponent was represented by Gary Nock and Angela Dahlke of Cullen & Co, Patent and Trade Mark Attorneys.  The applicants did not appear, and did not provide written submissions.

The Notice of Opposition

1. The notice of opposition (“the notice”) lists grounds of opposition annotated (a) to (o), fifteen grounds in all. Some of the grounds listed are open to interpretation as to validity. However, at the hearing the opponent pursued three grounds only – grounds under sections 42, 44 and 60 of the Act– and since these three grounds are clearly annotated on the notice, the matter of the validity of some of the other grounds need not be addressed. For completeness, I decide that those grounds not pursued at the hearing have not been established.

Evidence provided

1. The evidence provided in respect of the opposition is shown in the table below:

Declarant	Exhibits	Date Made
Evidence in support
John Craig Uttermare White	JW-1 to JW-11	18 November 2005
Helmut Albert Eichberger	HAE-1 to HAE-3	21 November 2005
Evidence in Answer
Brent Lloyd Morley	BLM-1 – BLM-3	15 February 2006
Evidence in reply
John Craig Uttermare White	JW-1	26 April 2006

1. At this stage I will briefly describe the evidence provided, but will refer to particular parts in more detail where necessary during my discussions later in this decision.

2. The first White declaration states that Billabong International Limited, the parent company of which the opponent is a wholly owned subsidiary, in 2004 acquired the business which owned trade marks for the word KUSTOM.  Exhibit JW-2 consists of a listing of approximately seventy trade marks in various countries around the world, all of which include the word KUSTOM.  Six of the trade marks on the list are Australian trade marks, five of these predate the applicants’ filing date.  All six are now registered trade marks.  

3. Sales figures were supplied for two years only – 2003/2004 and 2004/2005.  The exhibit including the figures is marked confidential, so I will not quote actual figures.  However, the sales in these years are significant, the second year being half as much again as the first, supporting the claim made in other exhibits that the brand was performing well.

4. The Eichberger declaration, as well as documenting the change of ownership of the KUSTOM marks from the original owner to the opponent, includes as Exhibit HAE-3, a declaration made by Alastair Donald Cook, one of the original owners of the KUSTOM trade marks.  This declaration was originally submitted as evidence of use in response to grounds for rejection under the provisions of subsection 41(5) which were raised during examination against what is now registration 826941.  The declaration is dated 24 January 2003, and gives annual sales figures for the years 2000-2001 and 2001-2002.  Again, the figures are claimed as confidential, but the sales are significant for each of the years quoted.  

5. The evidence in answer is brief.  It consists of a single declaration, that of one of the applicants, Brent Morley.  Mr Morley states that up until the time it was made the applicants’ goods had only been sold in Queensland, but the applicants had plans to expand this territory in the future.  At the time of making the declaration, the applicants had not used the trade mark for a full financial year, and thus Mr Morley said he did not have full financial figures available.  However, it appears that they had sold a very small number of t-shirts, totalling only a few hundred dollars.  Much of the declaration consists of the Mr Morley’s opinion of the difference between the two trade marks – KUSTOM and DIRTY KUSTOMS INDUSTRIES.  However, some examples of the trade mark as it is used on the goods were provided.

6. The second White declaration forms the evidence in reply, and responds to some of the statements made in the applicants’ declaration. 

Discussion

1. Under the current trade mark legislation, the onus lies with the opponent to establish at least one ground of opposition in order to be successful.  The grounds of opposition actually pursued have been mentioned earlier.  The rights of the parties are to be determined as at the filing date of the application, that being 14 March 2005 (“the relevant date”). 

2. As the opponent has nominated grounds of opposition under sections 44 and 60, an appropriate place to begin my discussion is in the requirement which these two sections have in common – whether the applicants’ trade mark is substantially identical with or deceptively similar to any of the trade marks nominated by the opponent on the notice.

3. In the notice of opposition, under the ground of opposition relevant to section 60, the opponent provided a list of six trade marks all of which contain or consist of the word KUSTOM and which are registered in Australia. A number of these trade marks were referred to again in its submissions in respect of section 44. I have included a full list of the current details of these trade marks at Annexure 1 to this decision.

Substantial Identity

1. The accepted test for substantial identity is found in the often quoted words of Windeyer J in Shell Co. (Aust) Ltd v Esso Standard Oil (Aust) Ltd ((1963) 109 CLR 407 at 414-415:

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

2. On a side by side comparison, there are distinct differences between the trade marks being compared.  The applicant’s trade mark consists of three words – DIRTY KUSTOMS INDUSTRIES.  Five of the opponent’s trade marks consists of the single word KUSTOM, presented in different fonts in the various trade marks, whilst one also contains an additional upper-case letter K.  When comparing the marks side by side, the differences in both appearance and meaning are greater than the similarities, and the total impression of the two trade marks is of dissimilarity.  The trade marks are thus not substantially identical.

Deceptive similarity

1. While “substantial identity” is not defined in the legislation, section 10 defines deceptive similarity as follows:

   Section 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.

1. The test for deceptive similarity is described by Justice Windeyer in Shell v Esso, supra, in the following words:

   On the question of deceptive similarity, a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity.  Therefore the comparison is the familiar one of trade mark law. It 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 television exhibitions.

2. Also relevant to the matter are the comments of Dixon and McTiernan J.J., in Australian Woollen Mills[1] where they discussed deceptive similarity.  The principles they described are that the matter is not to be decided by comparing the marks side by side but rather that:

   An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought.  The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same.  The effect of spoken descriptions must be considered.  If the mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part.  The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.  Potential buyers of goods are not to be credited with any high perception or habitual caution.  On the other hand, exceptional carelessness or stupidity may be disregarded.  The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard.

   [1] Australian Woollen Mills Ltdv F. S. Walton & Co Ltd 58 CLR 641 at 658.

3. All the surrounding circumstances in the trade should be taken into account when considering the trade marks, according to Lord Parker in the Pianotist case, Re Application by Pianotist Company Ltd (1906) 1A IPR 379:

   You must take the two words.  You must judge of them, both by their look and by their sound.  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 of the respective owners of the marks.  If, considering all those circumstances, you come to the conclusion that there will be a confusion – that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to a confusion in the goods – then you may refuse the registration, or rather you must refuse the registration in that case.

4. The above quotation is particularly relevant in this case, as the goods of both applicant and opponent appear to be designed for the same market, that market being the youth clothing market targeting specifically surfer and skater groups.  The issue is thus whether the ordinary purchaser, buying goods in the market in which both of these traders operate, is likely to be confused into thinking that the applicant’s goods do, in fact, originate from the opponent company.  This possibility of confusion is to be considered in a situation where the trade marks are not side by side so that a direct comparison may be made.  The comparison is thus one of the impression remaining in the mind of a person who has been exposed to one of the marks, and has to rely on their recollection of it in deciding whether the other trade mark originates from the same trade source. 

5. Mr Morley stated that his trade mark consists of three words, as opposed to the opponent’s single word, and that this fact would reduce the likelihood of confusion.  In some circumstances I believe this would be so.  However, he demonstrated via examples of the labels used on the applicants’ goods that the word KUSTOMS, as well as being spelled in the same manner as the opponent’s registered marks, is highlighted within the trade mark when in use on the goods.  This highlighting is clearly shown in the copy of a swing tag forming part of Exhibit BLM-3 to the Morley declaration and shown below:

1. I am aware, from my own experience with young clothing buyers, that this market is particularly “brand conscious”.  This, I consider, heightens the likelihood of confusion occurring.  At the relevant date, 14 March 2005, the applicants do not appear to have had any use at all, or if there was use, it was very slight indeed.  The opponent, on the other hand, was already established in the market, and has had a significant presence since at least 2000-2001.  There is thus a strong likelihood that buyers in the relevant market who are aware of the opponent’s KUSTOM brand will be likely to see the DIRTY KUSTOMS INDUSTRIES trade mark, especially when the word KUSTOMS is highlighted on the labels in the manner shown above, as related to the opponent’s trade marks. 

2. This leads me to a conclusion that, taking into account all the surrounding circumstances likely to apply in the relevant market, there is a real tangible danger of deception and confusion occurring, and therefore the applicant’s trade mark is deceptively similar to the opponent’s KUSTOM trade marks.   

3. The commonality between section 44 and section 60 having been decided, I turn to a consideration of section 44 which I am satisfied will decide this opposition.

Section 44 – identical etc trade marks

1. As the applicant has advised that he had less than a full year’s use at the time of making his declaration, and his claim is only for goods, subsections 44(2), 44(3) and 44(4) of this section of the Act need not be considered. Section 44 thus relevantly reads:

   Section 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 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.

   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.

   Note 4: The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

2. Referring to the notes to section 44, the following section of the Act is also relevant:

   Section 14.  Definition of similar goods and similar services

   (1)  For the purposes of this Act, goods are similar to other goods: 

   (a) if they are the same as the other goods; or

   (b) if they are of the same description as that of the other goods.

3. In order to establish a ground of opposition under the provisions of section 44, the opponent must be able to point to trade mark application/s or registration/s which:

   • have earlier priority dates than that of the application
   • are registered or pending for the same or similar goods and
   • are for a substantially identical or deceptively similar trade mark to the application trade mark.

4. The following trade mark registrations owned by the opponent have earlier priority dates than the application:  826941, 943012, 1005404, 1014313, and 1024286.  All of these registrations, except for 1005404, cover similar or the same goods, in that all have claims for “clothing, footwear, headgear” in class 25, and/or “sporting goods” in class 28, descriptions which encompass the goods the applicant is claiming. 

5. Given that I have decided that the applicants’ and the opponent’s trade marks are deceptively similar, all the requirements of section 44 have been met for four of the trade marks the opponent has already registered. I am satisfied that the ground of opposition under that section is established.

6. As the opponent has been successful in this ground, it is successful in the opposition.  It is not necessary for me to consider the other grounds pursued at the hearing. 

Decision

1. The opponent has established a ground for opposition under the provisions of section 44. I refuse to register trade mark application 1046043.

Costs

1. The opponent has requested its costs, and as the successful party, it is entitled to them.  I award costs against the applicant according to the official scale set out in Schedule 8 of the Regulations.

Alison Windsor

Hearing Officer

Trade Marks and Designs Hearings

21 December 2007

Annexure 1

No.	Trade Mark	Class: Goods	Priority date:
826941	Class: 18 Wallets Class: 25 Clothing, footwear, headgear including shoes, socks, pants, shorts, swimwear, T-shirts, shirts, caps, hats and other apparel items, all being included in class 25	10/03/2000
943012	Class: 18  chamois leather (other than for cleaning purposes), bags including beach bags, all purpose sports bags, all purpose athletic bags, barrel bags, tote bags, carry-all bags, shopping bags of leather, textile or mesh, leather bags for merchandise packaging, shoulder bags, handbags, clutch bags, waistpacks, rucksacks, knapsacks, backpacks, school bags, book bags, satchels, cosmetic bags sold empty, shaving bags sold empty; travel bags, trunks, luggage, carry-on bags, garment bags for travel, and other travel goods in this class; cases including travel cases, overnight cases, briefcases, document cases, credit card cases, business card cases, cosmetic and toiletry cases sold empty, vanity cases; jewellery bags for travel; pouches in this class; wallets; purses; key cases; key chains, key fobs and key tags, all being of leather, animal hides and imitations thereof; umbrellas Class: 28  Sporting goods, parts and accessories therefor, including surfboards, sailboards, kiteboards, bodyboards, wake boards, waterskis, snowskis, snowblades, snowboards, skateboards, sporting goods for other action sports, bags and covers for sporting goods, surfing traction systems, grips, bindings, legropes and tethers for sporting goods, waxes for boards and skis, and all other related sporting accessories	10/02/2003
1005404 (Series)	Class: 14  Precious metals and their alloys; goods of precious metals and their alloys, imitation precious metals, or coated therewith, not included in other classes; jewellery and costume jewellery, including earrings, necklaces, chains, amulets, anklets, brooches, rings, charms, trinkets (jewellery), ornaments (jewellery) including pendants, ear ornaments, ornamental pins, cuff links, wrist bands, collar tips, boot chains; precious stones and semi-precious stones; horological and chronometric instruments, watches and clocks, and other timepieces, and parts of the aforegoing goods, watch accessories including watch bands, watch chains, watch straps and watch cases; jewellery cases, jewellery boxes and jewellery pouches in this class, medallions and badges of precious metal or coated therewith; keyrings, key cases, key tags and key fobs in this class	07/06/2004
1014313	Class: 18 Chamois leather (other than for cleaning purposes), bags including beach bags, all purpose sports bags, all purpose athletic bags, barrel bags, tote bags, carry-all bags, shopping bags of leather, textile or mesh, leather bags for merchandise packaging, shoulder bags, handbags, clutch bags, waistpacks, rucksacks, knapsacks, backpacks, school bags, book bags, satchels, cosmetic bags sold empty, shaving bags sold empty; travel bags, trunks, luggage, carry-on bags, garment bags for travel, and other travel goods in this class; cases including travel cases, overnight cases, briefcases, document cases, credit card cases, business card cases, cosmetic and toiletry cases sold empty, vanity cases; jewellery bags for travel; pouches in this class; wallets; purses, key cases; key chains, key fobs and key tags, all being of leather, animal hides and imitations thereof; umbrellas Class: 25 Clothing, and clothing accessories, footwear and headgear, including shirts, T-shirts, singlets, blouses and tops, sweaters, jackets, pullovers, coats, dresses, skirts, sarongs, trousers, pants, jeans, shorts, board shorts, surfwear, swimwear, sportswear, underwear, sleepwear, belts, scarves, gloves, wristbands (clothing), hosiery, socks, shoes, boots, sandals, slides, thongs and slippers, hats, caps, beanies, peaks and visors; wetsuits, wetsuit vests, boots, gloves and hoods, wetsuit shorts and tops; wetsuit accessories in this class Class: 28 Sporting goods, parts and accessories therefor, including surfboards, sailboards, kiteboards, bodyboards, wake boards, water-skis, snowskis, snowblades, snowboards, skateboards, sporting goods for other action sports, bags and covers for sporting goods, surfing traction systems, grips, bindings, legropes and tethers for sporting goods, waxes for boards and skis, wax combs, and related sporting accessories in this class	05/08/2004
1024286	KUSTOM	Class: 18 Chamois leather (other than for cleaning purposes), bags including beach bags, all purpose sports bags, all purpose athletic bags, barrel bags, tote bags, carry-all bags, shopping bags of leather, textile or mesh, leather bags for merchandise packaging, shoulder bags, handbags, clutch bags, waistpacks, rucksacks, knapsacks, backpacks, school bags, book bags, satchels, cosmetic bags sold empty, shaving bags sold empty; travel bags, trunks, luggage, carry-on bags, garment bags for travel, and other travel goods in this class; cases including travel cases, overnight cases, briefcases, document cases, credit card cases, business card cases, cosmetic and toiletry cases sold empty, vanity cases; jewellery bags for travel; pouches in this class; wallets; purses, key cases; key chains, key fobs and key tags, all being of leather, animal hides and imitations thereof; umbrellas Class: 25 Clothing, footwear, headgear, including shirts, T-shirts, singlets, blouses and tops, sweaters, jackets, pullovers, coats, dresses, skirts, sarongs, trousers, pants, jeans, shorts, board shorts, surfwear, swimwear, sportswear, underwear, sleepwear, belts, scarves, gloves, hosiery, socks, shoes, boots, sandals, slides, thongs and slippers, hats, caps, beanies, peaks and visors; wetsuits, wetsuit vests, boots, gloves and hoods, wetsuit shorts and tops Class: 28 Sporting goods, parts, fittings and accessories for the aforegoing goods, including surfboards, sailboards, kiteboards, bodyboards, wake boards, waterskis, sporting goods for other water sports, scooters (toys), skateboards, rollerblades, roller skates, parts, fittings and accessories for all of the aforegoing goods, bags and covers for sporting goods, surfing traction systems, grips, legropes and tethers for sporting goods, waxes for surfboards, skateboards, skis, other sporting goods and related sporting accessories in this class	11/10/2004
1060891	Class: 25  Clothing, footwear, headgear, including shirts, T-shirts, singlets, blouses and tops, sweaters, jackets, pullovers, coats, dresses, skirts, sarongs, trousers, pants, jeans, shorts, board shorts, surfwear, swimwear, sportswear, underwear, sleepwear, belts, scarves, gloves, hosiery, socks, shoes, boots, sandals, slides, thongs and slippers, hats, caps, beanies, peaks and visors; wetsuits, wetsuit vests, boots, gloves and hoods, wetsuit shorts and tops Class: 35   Retailing and wholesaling services; retail store outlets; bringing together, for the benefit of others, of a variety of goods enabling customers to conveniently view and purchase those goods; loyalty programs; loyalty card programs; discount card schemes; incentive schemes, advertising and promotional services in this class namely consumer loyalty programs; loyalty programs; promoting the goods and services of others by means of offering discounts; schemes which offer discounts on hotels, motels, inns, resort accommodation, restaurants, car rentals, tours, cruises, air fares, tour packages; business management and business and office administration services; providing information regarding discount shopping services for shoppers, travellers and businesses; organisation, operation, and supervision of sales and promotional incentive schemes; marketing of entertainment, sporting and cultural events; franchising business services; publication and dissemination of publicity material; information services relating to all of the aforegoing	20/06/2005