Pioneer KK v Pioneer Computers

[2007] ATMO 2

TRADE MARKS ACT 1995

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

Re:Opposition by Pioneer KK to an application under section 92 of the Act by Pioneer Computers Pty Limited to remove trade mark registrations 427184(9), and 767049(9, 37) - PIONEER - registered in the name of Pioneer KK.

Delegate:

Rachel Dunn

Representation:

Opponent: Delwyn Everard of Spruson & Ferguson

Applicant: Julia Baird of Counsel instructed by Matthew Hall of Swaab Attorneys

Decision:

S 92 opposition– use shown for goods of computer peripherals; – s101(3) - Registrar’s discretion – non-use application unsuccessful – trade marks to remain on the register in their current form

Background

1. Trade mark registrations 427184 and 767049 have the following details:  

Number	427184	767049
Trade Mark
Filing Date	21 May 1985	9 July 1998
Relevant goods and services – collectively referred to as the “relevant goods” for the purpose of this decision	Class 9 - Computers; computer peripheral devices; computer keyboards; computer memories; printers for use with computers; data processing apparatus; CD-ROM disc drives; computer software; computer operating programs; computer game programs	Class 9 - Computers; computer peripheral devices; computer keyboards; computer memories; printers for use with computers; data processing apparatus; CD-ROM disc drives; computer software; computer operating programs; computer game programs Class 37 – Installation, maintenance and repair of office machines and equipment, data processing apparatus and computers

1. Pioneer Computers Pty Limited (the removal applicant) made an application under both s92(4)(a) and (b) of the Trade Marks Act 1995 (the Act), for partial removal of the “relevant” goods and services listed above, on 29 January 2004.  These applications were opposed by the trade mark owner, Pioneer KK (the opponent) on 11 June 2004.

2. The period of time covered by the removal application (relevant period) in terms of paragraph 92(4)(b) is 29 December 2000 to 29 December 2003.

Application for removal

1. The grounds cited in the removal application are those set out in paragraphs 92(4)(a) and (b) of the Act:

   (a) That, on the day on which the application for the registration of the trade mark was filed, the applicant for registration has no intention in good faith:

   (i)        to use the trade mark in Australia; or

   (ii)       to authorise the use of the trade mark in Australia; or

   (iii)      to assign the trade mark to a body corporate for use by the body corporate in Australia:

   in relation to the goods and/or services to which the non-use application relates and that the registered owner:

   (iv)     has not used the trade mark in Australia; or

   (v)      has not used the trade mark in good faith in Australia;

   in relation to those goods and/or services at any time before the period of one month ending on the day on which the non-use application is filed;

   (b) That the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:

   (i)        used the trade mark in Australia; or

   (ii)        used the trade mark in good faith in Australia;

   in relation to the goods and/or services to which the application relates.

2. The removal applicant indicated that it was aggrieved by the opponent's registration, however only sought partial removal.  A statutory declaration by David Matthew Hall accompanied the removal application.  In this declaration Mr Hall stated that he had made investigations into the use of the PIONEER trade marks and that it appears that only limited use of the trade marks has been made by the opponent in the Australian marketplace.

Notices of opposition

1. The opponent responded in its notices of opposition that:

• The applicant for removal is not a person aggrieved.

• When the trade mark was filed the applicant had an intention in good faith to use the trade marks.

• In the relevant three year period, the trade marks have been used in Australia in relation to the goods and/or services for which they are registered.

• If no use of the trade mark is found, circumstances existed that were an obstacle to the use of the trade mark; and

• The Registrar should exercise discretion and refuse to remove the trade marks from the register.

Evidence

1. The evidence in support is voluminous, consisting of several statutory declarations and providing many examples of the word PIONEER in exhibits.  I will not tabulate it all here, however I will refer to the relevant portions throughout the decision.  The evidence in answer consists of several declarations and also many examples of the use of PIONEER – in fact some of the exhibits provided are the same incidences of the opponent’s use of the term provided by the opponent.  Evidence in reply was of a similar extent to the evidence in support, containing many more exhibits and annexures.

2. The opponent sought to introduce further evidence on the day of the hearing.  This was granted despite objection by the removal applicant.  The removal applicant subsequently served an answer to this further evidence, and that declaration finalized the evidence stages for this matter.

Submissions

Removal applicant’s standing as a person aggrieved

1. The removal applicant’s standing as a person aggrieved is a threshold question – if no aggrieved status is found the removal application fails.  The opponent accepts that the removal applicant is aggrieved in relation to the goods of desktop personal computers, notebooks and servers, however for the remaining goods it is submitted that the removal applicant has not demonstrated its aggrieved status.

2. The removal applicant submits that it is a manufacturer and vendor of computer products and services who uses the name PIONEER.  It is appreciably disadvantaged in a legal or practical sense by the registrations.  Additionally, the opponent has alleged infringement by the removal applicant.

3. I agree with the removal applicant.  Its standing as a person aggrieved is clearly established due to the allegation of infringement.  The threshold test has been passed by the removal applicant and it is now necessary to consider the evidence of use provided.

Evidence of use of PIONEER by the opponent

1. When I am considering the use provided by the opponent I am unconcerned whether the use has been of the fancy script of 427184 or 767049, as I consider the trade marks to have only minor alterations between them, and those alterations certainly do not substantially affect the trade mark’s identity.

2. The opponent bears the onus of establishing that it has used the trade marks on the relevant goods within the relevant period.  It submits its sales of computer products in this period amounted to approximately 10% of all its sales in Australia on an annual basis.  Goods such as CD-ROM drives, DVD recorders and players, a computer known as the PIONEER Palcom pX-7, CD-ROM readers and writers and re-writable storage disks are said to have been sold, some of these in the relevant period, and after-sales technical support has also been provided.

3. The opponent’s evidence is led by declarations made by Kenneth Douglas Barelli, Managing Director of Pioneer Electronics Pty Ltd, a wholly owned subsidiary of the opponent.  Mr Barelli’s declarations have exhibits attached which establish clear use of the word PIONEER during the relevant period on the following goods and services: MP3 players, digital media players, CD players for DJs, mixers for DJs, turntables for DJs, stereo headphones, digital audio systems, DVD players, video players, multi-channel A/V receivers connectable to a computer, plasma televisions which can receive images from the Internet, DVD recorders, speakers, home theatre receivers, complete home theatre systems, CD read-write players, JPEG players, multi media players with memory stick functionality, car audio systems, car DVD systems, amplifiers, Global Positioning System units, DVD ROMs, DVD writers, CD writers, DVD jukeboxes, plasma display screens, WORM (write once read many) disks and video cards; and after sales customer support services including hardware replacement.

4. The opponent asserts that the goods of DVD ROMs, DVD writers, WORM disks, rewritable disks, DVD ROM jukeboxes, CD writers, commercial plasma display screens, video cards, speakers and smaller goods such as power supplies, connector panels, and wall brackets are relevant goods; as they are either computer parts or computer peripherals.

5. The removal applicant submits that this evidence does not show any use of the relevant goods; is very general in its nature; or shows use outside the relevant period.  It asserts that there is no evidence of even one instance of a sale of a relevant good and points out that the opponent’s slogan is sound.vision.soul, emphasizing the nature of the opponent’s core business, that of audio, video and home entertainment goods.  Services provided by the opponent are also criticized by the removal applicant as being support and helpline roles only, not the services relevant to this removal application.

6. The removal applicant’s own evidence shows that the opponent has a reputation in Australia for audio visual equipment, including video products, CD players and car audio systems including speakers.  It seeks to draw a distinction between computers with all the functions they can perform, and audio visual equipment with all the different functions it can perform.  The removal applicant’s evidence is led by the declarations of Jin Feng Li, the Managing Director of the removal applicant.  He attests to an excellent knowledge of the differences between computer goods and services and other electronic goods, including home entertainment and audio visual items.  He declares that a DVD writer, whilst it can be connected to a computer and thus used as a form of peripheral device, is neither a computer nor any other relevant good.

7. The relevant goods of computers; computer keyboards; computer memories; printers for use with computers; data processing apparatus; CD-ROM disc drives; computer software; computer operating systems; computer game programs and the relevant services of installation, maintenance and repair of office machines and equipment, data processing apparatus and computers can be dispensed with concisely.  No use within the relevant period has been shown by the opponent for these goods and services.

8. The relevant goods of computer peripheral devices can not be decided in such a fashion however, due to use established by the opponent and the broad range of goods which can be classified as computer peripherals.

9. Computer peripheral devices are those attached to a computer, particularly ones which are input/output devices, transferring information into or out of the computer.[1]  They are not part of the essential computer, the processor, memory or data paths, but may be mounted in the same case.  Computer peripherals include such items as removable storage, disk drives, CD-ROMs, CD writers, DVD ROMs, DVD writers, USB flash drives, keyboards, joysticks, printers, sound cards, and speakers among many others.[2]

   [1] A Dictionary of Computing Oxford University Press, 2004; The Macquarie Dictionary Online Edition; Searchmobilecomputing.techtarget.com Definitions Powered by Whatis? (whatis.com); Wikipedia Encyclopedia online ( Whatis? (whatis.com); Wikipedia Encyclopedia online (>

   The opponent submits that it can show use within the relevant period on goods which are computer peripheral devices, mainly DVD writers.  The removal applicant, whilst admitting that a DVD writer can be used as a peripheral device to a computer[3], insists that as it can also be connected to a DVD player attached to a television, and is not one of the more common computer peripheral devices, it is not covered in the relevant goods.  Therefore, it submits, the opponent cannot show use on the entirety of goods known as computer peripherals and these goods must therefore be removed from the registrations.

   [3] Paragraph 26 of the declaration of Jin Feng Li, dated 10 June 2005

10. I do not agree with the removal applicant.  I believe that DVD writers, CD read-write players, JPEG players, DVD ROMs, CD writers, WORM (write once read many) disks and video cards are all properly referred to as computer peripherals and the opponent has shown use within the relevant period on these relevant goods.

The Registrar’s discretion

1. The trade marks have been used for the relevant goods of computer peripherals, however for the remaining relevant goods and services no use has been shown within the relevant period.  This would generally lead to all, or most of, the relevant goods and services being removed from the registrations.  However, a removal for non-use action may also be defeated if circumstances can be shown that prevented the necessary use, or, if the Registrar is satisfied that it is reasonable not to remove the registrations[4].  The opponent accepts that no circumstances can be shown that were an obstacle to the full use of the registrations.  Therefore, the opponent turns to the Registrar’s discretion not to remove the relevant goods and services from the registrations.

   [4] See s100(3)(c) and 101(3) of the Act

2. Both parties provided lengthy submissions and evidence towards the argument of the use of discretion.  The opponent submits that its reputation (the extent of which in the fields of audio, visual and home entertainment is not disputed by the removal applicant) is relevant to the exercise of discretion.  It attests to being a long established and well known company in Australia in connection with a broad range of audio, audio visual, and office equipment.  It is stated that these goods are the “same type of thing” as the goods of interest to the removal applicant, and that in the current marketplace it is artificial and contrary to purchase patterns to separate the goods of computer systems from the goods of audio and audio visual equipment.

3. The opponent also spends some time on the question of public interest.  It believes that the public would be deceived or confused by the removal applicant using PIONEER on not only computer systems but all the relevant goods.  Electronic goods, the opponent claims, whether they be audio visual or computers bearing the trade mark PIONEER, would be regarded by the ordinary consumer as originating from the opponent.

4. The concept of brand extension is addressed by both parties.  The opponent has provided evidence in the form of a statutory declaration by Paul Lindsay Blanket – a lecturer in advertising and marketing, and Director of First Impressions, a company providing marketing, advertising and promotional consulting.  Mr Blanket was instructed by the opponent’s agents to provide an opinion as to the reputation of the opponent and whether this reputation would be enough to cause confusion to consumers if another trader were to use PIONEER.  Mr Blanket provides information regarding the concept of brand extension, several examples of successful brand extensions, and a focus on such practice in the electronics industry.  He attests to “significant and increasing blurring between what would be seen as a traditional computer with a more mainstream consumer product.”  He also lists goods that incorporate some “smart” or computer-like features (such as fridges that are internet compatible and gaming consoles that play movies) to demonstrate the integration of home appliances and computers into the general category of consumer electronic goods.  The consumer who saw a PIONEER branded computer, says Mr Blanket, would expect it to originate from the same organization that PIONEER branded electronic products originated.

5. For its part the removal applicant submits it would be unreasonable to exercise any discretion in this matter.  It points out that the non-use provisions are in the Act for the purpose of removing trade marks which are not used and thus should not remain on the register.  The removal applicant claims that the opponent has had more than enough time to begin to use the registrations for the goods and services covered, and that its decision in 1985 to cease making computers[5] was a clear statement that the opponent abandoned any intention of using the registrations on the relevant goods.  Tests under the Act including questions of infringement under s120 and the concepts of s44 and s60 oppositions to registration are mentioned by the removal applicant as other options for the opponent.  With these options; the lack of obstacles to use; and the lack of use for the relevant goods; the removal applicant submits that it is simply not reasonable to exercise any discretion in these circumstances.

   [5] See paragraph 10 of the declaration of Kenneth Douglas Barelli made on 10 December 2004

6. The evidence of the Blanket declaration is considered by the removal applicant to be speculative and having no probative weight, more properly served in an action regarding s60.  Finally, the removal applicant concludes that if the registrations were to remain, the opponent would retain proprietary rights for goods and services in which it does not deal, and has not demonstrated any trade in the relevant period.

7. The Federal Court has said that it is not necessary for exceptional circumstances to exist before the Registrar or the Court may apply the power found in s101(3) in favour of an opponent.[6]  There is no necessity for regard to bona fide use in the relevant period, and discretion should be exercised when it is reasonable to do so – there is no higher hurdle the opponent needs to cross.[7]

   [6] Lander J in Kowa Company Limited v NV Organon [2005] FCA 1282 at paragraph 98

   [7] Ibid at paragraphs 97 and 98

8. In Figgins Holdings Pty Ltd v Beltrami SpA (1998) 46 IPR 411 at 418-419, decided by Deputy Registrar Hardie it was said:

   Under subsection 101(3) the Registrar needs to be “satisfied that it is reasonable to leave a mark on the Register even when the grounds on which the removal application is made have been established.  This requires the Registrar to be satisfied that there is sufficient reason for leaving it there.  The reason would need to be based on special facts and circumstances, or an overriding question of public interest.  The onus for showing that those circumstances exist, is on the opponent to the removal application.”

9. Hearing Officer Thompson in QH Tours Ltd v Mark Travel Corporation (1999) 45 IPR 553 decided that discretion could be exercised in favour of an opponent who could show use of the trade mark prior to and after the relevant period in a bona fide fashion; could show a residual reputation in its trade mark; and could argue the likelihood of significant confusion or deception if the trade marks were removed from the register.

10. The opponent’ proof of evidence of use of PIONEER for the goods of computer peripherals does not defeat the allegation of non-use for the other relevant goods.  However, the Registrar may take into account use of the trade mark on goods of the same class or category as the relevant goods.[8]  The removal applicant is requesting removal of computers and related products and services from registrations which have been shown to be used on goods such as computer peripherals, plasma display screens, speakers, cables, televisions, VCRs, DVD players and recorders, home entertainment systems, data storage devices such as USB drives and services of helpline provision and other after-sale customer support.  This is simply too fine a distinction to make.

    [8] P&T Basile Imports Pty Ltd v Societe Des Produits Nestle SA (2002) 55 IPR 216

11. Drummond J commented on the issue of fine distinctions in respect of goods claims when he considered the “Taipan” trade marks in McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537. He said:

    But, in my opinion, the restricted scope the registered proprietor of a mark has to defeat a non-use application brought under s 92 of the 1995 Act compared with the position under the 1955 Act shows that there is a real question as to the proper interpretation to be placed on the expression “any or all of the goods … in respect of which the trade mark … is registered” in s 92(1):  if that provision is construed to permit fine distinctions to be drawn between two items, eg, between a sedan motor car and a utility motor car or the sort of distinction implicit in the second of the respondents’ non-use applications, viz, that between armoured military vehicles of greater than eight tonnes and smaller armoured military vehicles, the value of trade mark registration under the new Act is potentially capable of very great erosion. If s92, on its proper construction, permits of fine distinctions like this, s 44 might well need to be given a radically different reach from that which it appears on its face to have: there would seem to be little point in allowing limitation of a registration because of non-use of the mark in relation to goods only slightly different from those in respect of which the mark was registered, without also allowing the successful challenger to obtain registration for himself of that same mark in respect of those slightly different goods. The potential for fragmented ownership of the same or a very similar mark in respect of very similar goods to cause confusion, in my opinion, further illustrates the difficulties in identifying the construction that should be placed on the range of goods that s 92(2) permits to be made the subject of a non-use application.

Taking these comments into account it plainly isn’t viable to limit the registrations, as the distinction between computer goods and electronic goods such as audio, audio visual and home entertainment products resembles the distinction Drummond J makes regarding types of motor vehicles.  Whilst the drawing of fine lines is rarely a satisfactory outcome, it is less appropriate when the trade mark involved is well known and deception or confusion is likely to occur if the subject trade mark is limited.

1. The most significant factor in deciding the likelihood of deception or confusion in the marketplace is proof of such occurrences.  Mr Barelli attests to several incidences of customer confusion to date, in his declaration of 30 September 2004.  He declares that customers contact the opponent looking for service or repair of the removal applicant’s goods; customers considering purchasing the removal applicant’s goods mistakenly contact the opponent with queries or attempts to make such purchases; and Harvey Norman (a major retailer in the Australian market and one of the opponent’s own customers) mistakenly sent goods of the removal applicant to the opponent for service in the belief that it was a product of the opponent.  It is estimated that approximately one call per day is received by the opponent’s switchboard enquiring about the removal applicant’s goods.

2. Mr Li for the removal applicant attests that neither he nor his staff has ever experienced a customer mistaking his products for those of the opponent or vice versa.  He and his staff can not recall any product coming from Harvey Norman for service that had first been sent to the opponent.  Additionally, he declares that due to the removal applicant’s reputation in the computer industry there would be little likelihood of deception or confusion among consumers.  The removal applicant has been using PIONEER on desktop personal computers, laptops, notebooks, servers, and the provision of installation, repair and support services for these goods since 1996.  Its goods have been recognized with many awards and in the first quarter of 2006 held 0.6% of the notebook market share throughout Australia.  Steady sales revenue is shown; culminating in some $73 million to February 2004.  It is clear the removal applicant is no small player in the computer market.

3. In determining whether consumers would be, or have been, deceived or confused I believe it as appropriate to consider the evidence of the opponent’s reputation, despite the removal applicant’s insistence that such a consideration is not properly applied to the provision of s101(3) of the Act.  From the evidence provided it is clear the opponent has a significant reputation in the PIONEER trade marks and the word PIONEER.  Whilst this reputation mostly resides in goods that are classified as audio, audio visual and traditional home entertainment electronics, the opponent’s relatively recent branching out into items such as a class of computer peripheral devices, optical technology and data storage media is significant.  Additionally, before the relevant period, the opponent produced and sold entire computer systems branded PIONEER.  These PIONEER Palcom pX-7 computers appear to be limited to production around 1985, clearly well out of the relevant period, however it does show bona fide use of the mark on the relevant goods at a prior time.  Continued bona fide use of the trade mark for goods of the same kind as the relevant goods is also shown, and the opponent attests to its future plans of research and development of products that combine home entertainment and computing in one package.[9]

   [9] Paragraph 26 Barelli declarion made 30 September 2004

4. It is not appropriate to make a distinction between the computers and associated products of the removal applicant and the audio, visual and electronic products of the opponent.  Such fragmented rights lead to a high likelihood of deception or confusion in the marketplace.  I would expect the average consumer to believe that a computer, notebook, or similar computer items branded with PIONEER would originate from the opponent.  The concept of brand extension is common and well known to the general public, and can be found in the electronic goods marketplace.  I am mindful that this decision will adversely affect a trader who has seemingly used PIONEER honestly for over ten years, has goodwill in the computer marketplace, and intends to continue using the trade mark PIONEER in connection with goods and services unless prevented from doing so.  However, this is not the first dispute between these two companies over the trade mark PIONEER, with opposition filed against the removal applicant’s application for the word in 2002.  In this case I believe the public interest will be best served by retaining the registrations in total and preserving the established trade marks, due to a combination of the convergence of the goods and services of each party and the reputation of the opponent.

Decision and costs

1. Section 101(3) of the Act allows the Registrar to decide that the removal action is defeated even if the grounds on which the application was made have been established.  I find the application to remove the relevant goods and services from registrations 427184 and 767049 is unsuccessful.  The opponent has used the trade mark PIONEER for the goods of computer peripherals and I have exercised my discretion, as I believe it is reasonable to do so in this case, to retain the registrations in their current state.

2. As the removal applicant has been unsuccessful I award costs against Pioneer Computers Australia Pty Ltd at the scale found in Schedule 8 of the Trade Mark Regulations 1995.

Rachel Dunn

Hearing Officer

Trade Marks Hearings

18 January 2007