Produits Ella Bache Laboratoire Suzy v Chanel Limited

[1993] ATMO 38

Trade Marks Act 1955
Decision of a Delegate of the Registrar of Trade Marks

Re:Opposition by Chanel Limited to the registration of applications 438759 and 438760 in the name of Produits Ella Bache Laboratoire Suzy.

Background
Trade mark applications 438759 and 438760 were advertised, on 21.04.88 and 11.08.88 respectively, as having been accepted for registration.  The applications are in the name of Produits Ella Bache Laboratoire Suzy ("the applicant").  The goods specified in the respective applications are "cosmetic preparations for acneic skins" and "medicated cosmetic preparations for acneic skins".  The trade mark the subject of the two applications, which were both lodged on 2.1.86, is ANTIASE. 

Both applications claim a priority date of 10.12.85, a date earlier than the date on which the applications were lodged but allowable under the international provisions of section 109 of the Trade Marks Act.

Registration of the applications has been opposed, as provided for by sub-section 49(1) of the Trade Marks Act 1955, by Chanel Limited ("the opponent"), on grounds which are generalised and which I will not recite at length as they were not fully pursued at the hearing. The opponent claims in general terms that the applicant is not the proprietor of the marks, that registration of them would be contrary to section 33 of the Act and that the applications should be refused in any case as use of the applicant's mark would be likely to deceive.

The opponent specifically relies on the use and registration of the trade mark ANTAEUS.  That trade mark is registered under number 372405 as of 4.3.82 in respect of "soaps, perfumes, essential oils, non-medicated toilet preparations, cosmetic preparations, preparations for the hair and dentifrices".

After the service of the opponent's evidence in support and the applicant's evidence in answer the matter was set down for hearing on 19.10.92.  The opponent was represented by Mr David Wilson, an attorney of the firm of Shelston Waters.  Mr Paul Whenman, also a patent attorney, of the firm of F.B. Rice and Co. represented the applicant.  Having heard the parties I turn to the evidence.

Opponent's Evidence in Support
This consists of the declarations of Mr Anthony Aarts and Mr Colin Whitten.  Essentially, the opponent's declarations claim that its ANTAEUS products, a range of male toiletries, have been sold in Australia since 1984.  Sales are said to have risen from an initial 9000 units of product to a 1988 level of about 17000 units (about $390,000 wholesale).  Samples of packaging have been provided, and another sample shows magazine advertisements for the ANTAEUS products in question.  Similar advertisements have appeared in magazines such as The Bulletin, Men's Journal, Playboy and Cosmopolitan in the years 1986 through to 1989.

Mr Whenman also introduces the result of a search he has made of marks that might be considered similar to the ones now in competition.

Applicant's Evidence in Answer
The applicant relies on a declaration by George Hallas.  This declaration shows that the applicant's mark is used in relation to a compound used as one step in a 4-step program of chemical treatment.  Samples of promotional material and packaging are provided.  The material reveals that the medicated goods in class 5 are only marginally medicinal, as the active agent is simply ascorbic acid.  I should note here that such goods are in class 5 if described as medicated.  None the less they should not be seen as being particularly different from the ordinary sorts of skin conditioners that fall in class 3.

The applicant asserts that its goods have been sold under the trade mark since 1986, and sales have varied between a maximum (retail) value of $317663 and a minimum of $84000 in 1988.  It is also declared that the applicant's and opponent's goods are wholesaled on pre-printed order forms and identified verbally by the ultimate customers.

The applicant also relies on the declaration of its patent attorney, Mr Whenman, who has incorporated in his declaration the result of a search for trade marks for goods in classes 3 and 5 and beginning with the prefix "ant".  Also appended to his declaration are details of overseas registrations.  After hearing the attorneys' arguments, it seems that the relevance of this is that it establishes that the two competing marks co-exist in the United States and possibly other places.

Opponent's arguments.
Section 33
Section 33(1) of the act provides that:

33. (1) Subject to this Act, a trade mark is not capable of registration by a person in respect of goods if it is substantially identical with or deceptively similar to a trade mark which is registered, or is the subject of an application for registration, by another person in respect of the same goods, of goods of the same description as those goods or of services that are closely related to those goods, unless the date of registration of the first-mentioned trade mark is, or will be, earlier than the date of registration of the second-mentioned trade mark.

Under this heading Mr Wilson relied on the words of Parker J in Pianotist Co's Appn (1906) 23 RPC 774 at 777

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.

He noted that the relevant standard is set by Dixon and McTiernan J.J. in Australian Woollen Mills v FS Walton, 58 CLR 641 at p 658.

In deciding this question, the marks ought not, of course, to be compared side by side.  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 description must be considered.  If a 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.  Evidence of actual cases of deception, if forthcoming, is of great weight.

Finally, Mr Wilson reminded me that the onus is on the applicant to establish that it is entitled to registration (Eno v Dunn 7 RPC 311.)

Mr Whenman, in reply, argued that the opponent will ensure that its product is marketed under the trade mark pronounced to rhyme with "x-ray-us", rather than in the way adopted by Mr Wilson ("anti-us").  Mr Whenman noted that for all Mr Wilson's submission, Mr Whitten, one of the opponent's declarants, had dissected the mark as "ant-aeus".  That was done only for the purposes of analysing the look of the competing marks, and so is not in any sense evidence which might be relevant to my decision.  None the less, it is fair to note, as Mr Whenman did, that the opponent itself used that analysis while keeping silence as to how the last four of those letters would be pronounced.

Decision.
Section 33
It is for me to assess how the two competing marks will be pronounced in use.  I can rely only on my own knowledge and experience in the lack of any solid evidence on that question, and it seems to me that Mr Wilson's pronunciation of the opponent's mark is by no means certain. 

The opponent's trade mark is in my opinion perhaps to be pronounced like "x-ray-us" or, with a pseudo-classical flavour, "x-ray-oos", the last version using the short "u" of the word "push".  However, I note the often repeated caution in the Rysta's Application, 60 RPC 87 at p108, that the matter is not to be approached as it might be in a studio of elocution. I will therefore leave that question open.

The question of pronunciation is in any case over-rated on these lines of goods.  I note the force of Mr Whenman's arguments in relation to the pre-printed forms used by merchants to order the applicant's goods from suppliers.  Such forms will tend to limit the scope for confusion, though there is no evidence that shows that similar forms are the only way in which traders order such goods.

However, my concern is that deception will arise from simple error among ultimate customers.

In the case of Deeko Australia Pty Ltd v Decor Corp Pty Ltd 11 IPR 531 the deciding officer considered the British law as set out in Mars GB. Ltd v Cadbury Ltd. [1987] RPC 387 at 395. She noted that Whitford J., after judging the respective marks TREETS and TREAT SIZE by their look and sound and considering the goods, the customers and all the surrounding circumstances, observed:

I have, of course, referred to those words of Parker J. (in the PIANOTIST case, supra) which deal with the need to consider not only the look of the marks but their sound.  However, in present day conditions, when all items of confectionery of this size ‑ as is apparent from the evidence before me in this case ‑ are sold packaged with the brand appearing clearly on the packaging, and when the goods are, for the most part, picked up by the customers, and on the goods as picked up the marks will be clearly visible, the question of sound is perhaps becoming of diminishing importance."

The deciding officer went on to say:

I think it is a well‑known fact, and one of which I can take note, that retail outlets of the type referred to here operate on the principle that the customers select their purchases from display shelves with little or no intervention from sales staff, as one of the means whereby operational costs are reduced and product prices are kept as competitive as possible.

This evidence therefore establishes a similar situation to that referred to by Mr. Justice Whitford above, where the goods are, for the most part, picked up by the customer and the need to ask for them by means of the mark they bear is diminishing.  I must, of course, bear in mind any fair use the parties may make of their marks in respect of their goods as specified, not just the use that is demonstrated by the material before me in these proceedings.  However, I think it is fair, on the basis of this material, to place somewhat reduced weight on the phonetic comparison of the respective marks, and a somewhat greater weight on their visual differences. 

A similar conclusion was reached in Taiwan Yamani v Giorgio Armani 17 IPR 92. Though I note the argument that the latter decision was restricted to marks used in the clothing trade, I think a similar conclusion is open to me here.

I accept that Mr Hallas is correct when he says that the applicant's and opponent's particular goods are sold on spoken order.  This is presumably because they both happen to be up-market lines displayed in cases or behind glass counters.  However, more and more products are making their way out of such displays onto the counters for direct selection by customers, while the ordinary run of cosmetics - medicated or otherwise - are sold on self-service shelves in pharmacies, supermarkets and department stores.

It is in the supermarket, at a self-selection counter of a department store or among the shelves of a pharmacy that I think confusion will arise among the final customers. 

The two trade marks are of similar overall look, have identical first syllables, and are coined words of no obvious derivation.  Moreover, in both marks the letter S has a prominent role in the look of the last syllable.  The overall "first impression" (Rysta, supra) is distinctly similar.

It is true that when the competing marks are looked at side by side, coldly and analytically, the differences become clear.  However, repeat buyers of cosmetics, even medicated cosmetics, are not necessarily going to purchase after due analysis.  When I allow for the very ordinary degree of attention that may be paid to the purchase of such consumable items there is a more than reasonable likelihood of error. 

I therefore find that the trade marks are deceptively similar.  I turn now to consider the goods in question, that being the second aspect of the test under sub-section 33(1).

Mr Whenman conceded that medicated and non-medicated cosmetics are goods of the same description.  I agree with that conclusion in relation to the goods here in question, as there seems to be very little difference in the natures, uses and trade channels of medicated cosmetic formulation for acneic skin on the one hand and cosmetics on the other.  I will not belabour the relevant tests - they are set out at pages 191 to 193 of Shanahan's Australian Law of Trade Marks and Passing Off. 

Given my conclusion, the goods of the application in class 5 are in conflict, for the purposes of sub-section 33(1), with the opponent's cosmetics in class 3.  Equally, there is a direct overlap between the goods of the class 3 application and of the opponent's registration.

I find therefore that the opponent has made out a case under sub-section 33(1). 

I do not consider that the extent of use of the applicant's mark would justify the application of the "honest concurrent user" provisions of sub-section 34(1) in the applicant's favour.  Nor is there "any other circumstance" that might make it proper for me to allow the registration of the applicant's mark in the face of such a finding.  Similarly, the opponent commenced use of its trade mark in 1984.  That use prevents the application of the "prior continuous use" provision of sub-section 34(2) in the applicant's favour.

I am therefore required to refuse registration of trade mark applications 438759 and 438760.

Section 28
For the sake of completeness I will go on to deal with Mr Wilson's submission on the applicability of section 28 to the present facts.

Section 28 of the Act provides that

A mark-

(a) the use of which would be likely to deceive or cause confusion;

(b) the use of which would be contrary to law;

(c) which comprises or contains scandalous matter; or

(d) which would otherwise be not entitled to protection in a court of justice,

shall not be registered as a trade mark.

The test to be applied under sections 28(a) of the Act may be stated as follows, paraphrasing the words of Evershed J. in Smith Hayden & Co Ltd's Application (1946) 63 RPC 97:

Having regard to the reputation acquired by the opponent's mark, is the Registrar satisfied that the mark applied for, if used in a normal or fair manner in connection with any goods covered by the registration proposed, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons?;

Beyond this, though, the position under section 28 was analysed by Hearing Officer Homann in the case of Titan Manufacturing Co. v Coyne (1991) AIPC 90-808. Hearing Officer Homann concluded (emphasis added):

Section 28 has been the subject of recent consideration by the Courts and, in particular, by the High Court in New South Wales Dairy Corporation v Murray Goulburn Co‑operative Company Ltd 18 IPR 385 (the Moo case).  In that case the Court held, by a majority, that the operation of para 28(a) is limited by a requirement of blameworthy conduct on the part of the proprietor of the mark, that is, that the likelihood of deception and confusion has been brought about by the actions of the proprietor himself.  This is so whether as a result of reading para 28(a) conjunctively with para 28(d) or of construing 28(a) in the context of the Act as a whole together with general policy considerations.  The Federal Court had earlier reached the same conclusion in Riv‑Oland Marble Co (Vic) Pty Ltd v Settef SpA, (12 IPR 321) also a majority decision.

Mr Wilson addressed this interpretation in his submissions, arguing that there was not in fact a majority of the High Court in favour of such a single interpretation in relation to a pending application.  Rather, he argued:
. Dawson and Toohey JJ had found that the action of section 28(a) was confined by a requirement that, in addition, the deception or confusion must arise from blameworthy conduct on the part of the registered proprietor
. Gaudron J, while tending to agree with Dawson and Toohey JJ, did not propose that the section should have a conjunctive action
. Brennan J found that the action of section 28(a) was different before and after registration
. Dean J and McHugh J had, in another approach, both held that section 28 was disjunctive, while
. The Chief Justice said that it may not be necessary to read 28(a) as if it were governed by 28(d), but that it may be sufficient to say that the action of 28(a) is limited in expungement actions. 

On that basis he argued that there was no one clear line of reasoning adopted by a majority of the court in relation to this particular issue.  Accordingly, there was nothing in the decision or any other to force the registrar to limit the action of section 28(a) in the application, as distinct from rectification, stage.

I will address that analysis and refer to the judges in the same order:

Dawson and Toohey JJ held, after looking at the history of the format now found in section 28, that "Section 28(a) must be read together with s28(d) so that the reference in s28(a) ... is a reference to a use which would not only be likely to deceive but would be not entitled to protection in a court of justice".  (pp 416 - 417 of 18 IPR).  They then expressly reject the view that "blameworthy conduct" is a separate standard, and conclude that it is no more than a shorthand form for those actions which might disentitle an applicant to relief in a court of equity.  Their decision does not support Mr Wilson.

Gaudron J agreed with Dawson and Toohey JJ that section 28(a) "must be confined by a requirement of blameworthy or disentitling conduct".  While she does not explicitly state that she favours a conjunctive reading of 28(a) and (d), this is abundantly clear in the decision to which she refers.  The decision with which she was agreeing favoured a conjunctive interpretation, found "blameworthy" to be a shorthand for the circumstances which would be caught by s28(d), and expressly rejected blameworthy conduct as a separate standard.

Justice Brennan did not base his decision on section 28(d), which he said was "not expressed to relate to the conduct of the applicant for the original registration but to the character of the mark itself" (page 405).  He noted that the operation of s28(a) depends on whether it is to be applied before or after registration. 

This was in the context of his opinion that before registration the act has only one object:  to give to the public some protection against deceptive or confusing trade marks.  He was referring to the fact that section 28 operates in a "different regime" after registration.While in Titan Mr Homann had said that it was difficult to see how the section could change its action after registration, it was in Mr Wilson's submission necessary to consider the entire statutory scheme. 

Mr Wilson argued that prior to registration the Act is concerned only with the prevention of deception or confusion of the public, and that it is only after registration that the act becomes concerned also with conferring industrial property rights.  This does not acknowledge that the entire thrust of a system of application for marks which (while intended for use) are not necessarily in use by the applicant at the date of application is to ultimately confer industrial property rights.

Mr Homann concluded in Titan that it was difficult to see how the constraint to rectification could arise after registration.  I share his difficulty. 

Deane J held (p 410 ) that the four paragraphs of section 28 are "clearly disjunctive".  However, that was in a context that section 28 did not have a direct continuing action after registration, and his analysis of the action of the four provisions of the section as being clearly disjunctive was in the context that, were section 28 to be applied to deception or confusion which arose only after registration, there might be unfortunate consequences and that the action of section 28(a) would then need to be confined in "what seems to me to be a most artificial way".  His decision, though, supports Mr Wilson.

McHugh J (p 432) held that "an interpretation of s28 which holds that a mark does not offend against its provisions even though the use of the mark is 'likely to deceive or cause confusion' ignores the wording and structure of s28."  That was a view formed even though he was reluctant to conclude that section 28 had a continuing function in the first instance.  Having found himself obliged to accept that it did, since that was the premise argued by both the parties, he was able to decide that, on the facts of the initial decision, section 28(a) had been triggered and the mark should be removed from the register.

Again, this supports Mr Wilson.

Chief Justice Mason, at the bottom of page 400 notes the possibility that there are two interpretations of the way in which section 28(a) is to be applied:
.  the approach followed by the Full Federal Court in Riv-Oland, in which section 28(a) is governed by section 28(d) and
.  a second approach, relied on by Mr Wilson.  "It may be sufficient to say that in the entire statutory scheme a trade mark is only liable to be expunged under s 28(a) if the use of it becomes likely to deceive or cause confusion and that likelihood is due to the fault or blameworthy conduct of the registered proprietor" (emphasis added). 

In Mr Wilson's view, since the present case is not a rectification action, section 28(a) does not need to be limited in this way.  However, even if Mr Wilson is correct in the weight he puts on one of the two alternative interpretations looked at in principle by the Chief Justice, he reads too much into the word "expunged", since the expungement to which the Chief Justice had just referred (Riv-OlandMarble Co (Vic) Pty Ltd v Settef SpA) was one proceeding on the ground of incorrect initial registration.  On the other hand the Chief Justice had noted that the natural meaning of the words "shall not be registered" directs itself to the initial act of registration.  It is not likely that he would have been suggesting, without further explanation, that such a system would allow the question of the correctness of the original decision to be reviewed, years after the event, in the light of a provision which worked differently to the way it worked when the decision was originally made.

On my reading of the decision, a majority of the High Court (viz, Toohey, Dawson, Gaudron JJ, and Mason CJ) required something more than a simple finding that the use of an applicant's mark was likely to deceive or cause confusion if section 28 as a whole is to trigger removal. 

Blameworthy conduct is no more than a legal shorthand, per Dawson and Toohey JJ, for the conduct which would be caught in any case by section 28(d).  The Chief Justice is the only one to refer to a distinction between the conjunctive interpretation and the limiting of section 28(a) in the alternative way. 

Depending which way the Chief Justice is seen to lean it can be argued that the majority decision was not in fact for requiring blameworthy conduct so much as for the conjunctive action of section 28.  If not, then perhaps no clear majority emerges for the action of the two paragraphs.  The law is then as set in Riv-OlandMarble Co (Vic) Pty Ltd v Settef SpA 12 IPR 321, and I will refer to that case below.

Mr Wilson referred to the SPUDS McKENZIE case, Anheuser-Busch v Castlebrae Pty. Ltd. (1991) AIPC 90-840. He argued that in that case, after a reference to MOO, a decision was reached under section 28(a) alone.  However, that does not seem to be the case.  Davies J appears to have reached the view, on the facts before him, that the adoption of the mark by Castlebrae was in itself knowingly and deliberately intended to deceive Australians who knew of the Anheuser-Busch trade mark.  That is surely a finding of blameworthy conduct, though rectification was ordered on the ground that the marks were not capable of distinguishing goods or services as those with which Castlebrae was connected.

Riv-Oland
In that case the Australian distributor sought rectification on the ground that, at the time of registration, the Italian company's mark was not able under section 28 to be registered.  The trial judge agreed that, at the time of original application, s28(a) was triggered, but followed Fox J in HTX v Semco (1983) 49 ALR 636.

On appeal, Bowen CJ upheld the trial judge on that question.
Northrop J was quite specific: 28(d) does not act to qualify the operation of section 28(a). (12 IPR at 342)
Lockhart J. said (at p350) that the "syntactic function" of the word "otherwise" in s28(d) "requires that para (d) be taken to involve such a reference back, which in consequence will limit the circumstances in which the factors specified in paras (a), (b) and (c) will disentitle a trade mark to protection." 

Mr Whenman submitted that the question is settled, pending any clarification of the law by the High Court.  What is not settled is the effect of the law, derived from rectification cases, on the Registrar of Trade Marks in deciding questions of initial registrability.

It could be argued that the Registrar is simply unable to form any conclusions under a conjunctive section 28, since very obviously the Registrar functions as a tribunal rather than as a court of justice.  However, as per the case of Quinn and another, ex parte Consolidated Foods Corporation, reported at 48 AOJP 159 and 52 ALJR 117, the power being exercised by the Registrar in deciding matters under section 28 is an administrative one. Per Jacobs J, with the express concurrence of the clear majority of the court:

The determination of the facts, the existence of which Parliament has prescribed as a condition of the exercise of the administrative function of registration, is not necessarily the exercise of judicial power.

I can only conclude, therefore, that just as there is in a rectification case there is an onus on an opponent to show more than that the use of an opposed trade mark would be likely to deceive or cause confusion.  Section 28 must work the same way in opposition matters as in rectification matters, as per the application of that section to the correctness of the original act of registration in the Riv-Oland case.  Section 28 cannot change its spots simply because it is being interpreted by an administrator rather than a court.

In short, the opponent has not shown that any opposition can succeed on the action of s. 28(a) alone.  It follows that on the present evidence there can be no case under section 28 which might shift the evidentiary onus to the trade mark applicant.  The applicant is always under an ultimate onus to show that it is entitled to registration, but there is simply no case for it to answer under section 28 as a whole.

Proprietorship
Mr Wilson did not press the argument that the opponent's use of a trade mark which is no more than deceptively similar to ANTIASE can defeat the proprietorship claim which the applicant has made under section 40.

The two marks which are competing for the same proprietorship claim are not as close as ZOOPER DOOPER and DOOPA, considered in Tavefar v Life Savers 12 IPR 159, nor of the same order of closeness as POLYKIN and POLYKEN, Kendall Co v Mulsyn 109 CLR 300.

The present view of the Registrar on this question was given in Jose v Karu (1991) AIPC 90-844, as being that proprietorship is defeated only by use of an identical or almost identical mark. As that decision is under appeal I can give it no great weight. It is however a conclusion with which I agree.

Conclusion.
The opponent has made a case under section 33, and there is no remedy under section 34 available to the applicant.  I therefore refuse to register trade mark applications 438759 and 438760.  I award costs in accord with the official scale in the matter to the opponent.

T. Williams
Hearing Officer
6 May 1993