Qantas Airways Limited v N.V. Sumatra Tobacco Trading Company

[2012] ATMO 49

TRADE MARKS ACT 1995

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

Re:Opposition by Qantas Airways Limited to registration of trade mark application 1301668(30) - JETSTAR - filed in the name of N.V. Sumatra Tobacco Trading Company.

Delegate:

Claudia Murray

Representation:

Opponent: Mr Richard Cobden, Senior Counsel, instructed by Ms Lynne Peach, Partner, of Minter Ellison Lawyers, Sydney.

Applicant: Mr Blake Knowles, Trade Mark Attorney, of Cullens Patent and Trade Mark Attorneys, Brisbane.

Decision:

2012 ATMO 49

Section 52 opposition – section 60 ground established – use of applicant’s trade mark likely to deceive or cause confusion because of reputation in opponent’s trade mark - registration refused – costs awarded against applicant.

Background

1.     N.V. Sumatra Tobacco Trading Company, an Indonesian company (‘the applicant’) filed trade mark application number 1301668 on 29 May 2009 to register, as a trade mark, the plain word:

JETSTAR

2.     The application was filed in Class 30 of the International (Nice) Classification of Goods and Services in respect of:

Coffee, tea, cereal, biscuits, chocolates, cocoa, sugars, pastry and confectionery, honey, candy, bread, cakes, noodles

3.     The above statement of goods remains in the application. The application also originally included the services of ‘Cafes, cafeterias, hotels, motels restaurants, snack bars, bar services, canteens’ in Class 43. However these were subsequently removed, as explained below.

4. A ground for rejection under section 44 of the Trade Marks Act 1995 (‘the Act’) was raised against the application during examination. The examiner cited four trade marks, all in respect of service classes 39 and 43, belonging to Qantas Airways Limited. Three of the trade marks featured the word ‘JETSTAR’ and the fourth comprised the word and device combination.

5.     The applicant responded to the ground for rejection by consenting to the deletion of all the Class 43 services from its application, leaving just the Class 30 ‘coffee, tea cereal, biscuits…etc.’ listed above. The trade mark was then advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 4 February 2010.

6.     On 3 May 2010, Qantas Airways Limited (‘the opponent’) filed notice of opposition to registration of the trade mark. Fourteen grounds of opposition were listed in the notice.

7.     Evidence in support, answer and reply was duly served and filed. I heard the matter, as a delegate of the Registrar of Trade Marks, in Canberra on 26 March 2012. Mr Richard Cobden, Senior Counsel, instructed by Ms Lynne Peach, Partner, of Minter Ellison Lawyers, Sydney, represented the opponent. Mr Blake Knowles, Trade Mark Attorney, of Cullens Patent and Trade Mark Attorneys, Brisbane, represented the applicant.

Evidence

8.     The evidence in relation to this opposition comprises:

Evidence in Support

ØStatutory declaration of Cassandra Jane Hamlin, with Exhibits 1 to 27, (less Confidential Exhibit 26 which was not served on the other party and was later withdrawn) dated 5 August 2010.

ØStatutory declaration of Cassandra Jane Hamlin, with Exhibit 1 (which replaced Confidential Exhibit 26), dated 1 October 2010.

Evidence in Answer

ØStatutory declaration of Blake David Knowles, with Exhibits BDK-1 to BDK-5, dated 17 January 2011.

Evidence in Reply

ØStatutory declaration of Cassandra Jane Hamlin, with Exhibits 1 to 5, dated 17 May 2011.

9.     Ms Hamlin is the Company Secretary of the opponent. Her first declaration provides a brief history of the development of opponent’s business in Australia. She declares:

The Opponent commenced business in 1920 in Australia. As a result of accruing more than 89 years of airline experience the Opponent has become Australia's largest domestic and international airline, as well as one of the world's leading airlines. As part of its business, the Opponent owns the Australian airline, JETSTAR and conducts that business through its wholly owned subsidiary Jetstar Airways.

On 1 December 2003 the Opponent officially launched the trade mark JETSTAR (Trade Mark). Annexed and marked Exhibit '3' are the official media releases by the Opponent dated 1 December 2003 with respect to the above. On 25 May 2004 the Opponent officially commenced its airline services under the Trade Mark in Australia, and internationally in May 2005.

The Opponent's bold and distinctive Trade Mark, which is also used as (Trade Mark Logo), reflects its fresh and dynamic approach towards its services and goods offered under the Trade Mark.

This includes the Opponent offering services under the Trade Mark related to low cost airfares which has enabled a wide range of people to afford to travel by air. In particular the Opponent offers travel under the Trade Mark to 23 Australian domestic destinations, as well as 12 short and long haul overseas destinations. With respect to the Opponent's airline operations under the Trade Mark it is currently the third largest airline by Australian market share, and in the year ended May 2010 was the fourth largest international airline, by capacity share, serving international routes to and from Australia.

Jetstar Airways together with the Opponent's other wholly owned Australian and New Zealand based subsidiaries, Express Ground Handling Pty Ltd (ACN 107 638326) and partner carriers (such as Jetstar Asia Airways Pte Ltd and Valuair Ltd in Singapore, and Jetstar Pacific Airlines Joint Stock Aviation Company in Vietnam), are part of the group of businesses collectively referred to by the Opponent as the Jetstar Group. The Jetstar Group operates over 1,900 weekly airline flights to 17 countries.[1]

[1] Statutory declaration of Cassandra Jane Hamlin, dated 5 August 2010, paras 10-14.

Grounds of opposition

10.   The onus is upon the opponent to establish one or more of its grounds of opposition. The Federal Court has referred to the standard of proof required in terms of a ‘balance of probabilities’.[2] In its summary of submissions provided prior to the hearing, the opponent indicated that the grounds of opposition to be pursued were those under sections 60, 42(b), 43, 44(1), 59 and 62A, in that order. For completeness, I note that the other grounds listed in the notice of opposition have not been made out. An opponent’s success in relation to a single ground of opposition usually renders unnecessary any further consideration of other grounds pressed although, of course, all grounds would still be available to an opponent in the event of an appeal from a delegate’s decision. I will confine my deliberations here to the opponent’s primary ground of opposition under section 60.

Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

[2] Sports Warehouse, Inc v Fry Consulting Pty Ltd (2010) 87 IPR 300 per Kenny J at [30] to [40]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011) per Greenwood J at [16] to [32]; Allergan, Inc v Di Giacomo [2011] FCA 1540 (30 November 2011) per Stone J at [11] to [12].

11.   Section 60 provides:

The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a)      another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

(b)      because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.

Note:    For priority date see section 12.

12.   To satisfy section 60, the opponent must demonstrate that, at the time of filing the opposed application (29 May 2009), there existed a reputation in another trade mark, such that use of the opposed trade mark for the goods covered by the application would likely cause members of the public to be deceived or confused. The trade mark relied upon need not be subject of an application or registration in order to be relevant in terms of this section. Section 60 does not require the trade mark relied upon to be ‘deceptively similar’[3] to the opposed trade mark or that it has been used on similar goods or closely related services. Instead, the focus of the provision is squarely upon deception or confusion of the public generated by the applicant’s proposed use of the trade mark, because of the reputation of the trade mark(s) relied upon by an opponent. The reputation of a trade mark may develop in a variety of ways, and be influenced by the particular trading environment in which it has evolved. However, ‘in practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the [trade] mark, as opposed to the product.[4]

[3] As defined in section 10 of the Act.

[4] McCormick & Co v Mary McCormick (2001) 51 IPR 102, at 129; McCormick & Company Inc v McCormick (includes corrigenda dated 18 September 2000) [2000] FCA 1335 (15 September 2000), per Kenny J at [85]-[86].

13.   Mr Cobden led me through the opponent’s considerable evidence of its use of the ‘JETSTAR’ and  trade marks, and discussed the reputation that has developed around them. He mentioned that the latter trade mark is aurally identical to the former, being almost invariably referred to by consumers as ‘Jetstar’; both trade marks therefore being either substantially identical or deceptively similar to the opposed trade mark. He submitted that the very substantial amount of advertising and marketing that the opponent has undertaken in promoting the trade marks has had the effect of ‘establishing it as one of the strongest brands in Australia, including as at the relevant date’. He argued that the very manner in which the opponent markets its on-flight food lines in particular contributes to the ability of its brand to ‘cast a broad shadow’ over other goods and services beyond those with which the public might primarily associate it. He continued:

A key distinguishing feature of the airline services operated under the JETSTAR trade mark is that a selection of food, drink and entertainment are offered to passengers for purchase separately or in addition to flight tickets (as opposed to the standard industry practice of bundling such goods and services with tickets).[5] Qantas’ JETSTAR airline services have an established reputation in the Australian marketplace that the purchase price of its flights exclude the price of meals and drink (except in respect of Qantas’ premium ‘StarClass’ service on its JETSTAR flights, which includes food and drink as part of the purchase price). As a result, customers must actively select and purchase food and drink during the booking process or while they are on a flight.[6]

[5] Statutory declaration of Cassandra Jane Hamlin, dated 17 May 2011, at para 8(b).

[6] Ibid.

14.   Mr Knowles’ arguments in rebuttal of the section 60 ground went to the likelihood of deception and confusion occurring through use of a trade mark known in relation to airline services on such unrelated items as the biscuits, pastry, bread, etc. covered by the opposed trade mark. He argued that, although some brands may be so widely known that their use on any goods or services might potentially lead the public to infer a connection with the trade mark owner, the opponent’s brand was not of such an ‘iconic’ nature. He continued:

Customers do not frequent airports or fly on planes for the food. Customers will often avoid airline food, either due to perceived poor quality or its high cost. Therefore, the chances of a customer viewing a trade mark on a jar of coffee, a box of teabags or some other goods in a retail outlet and associating that mark with an airline is remote.

For confusion to occur, a customer would have to imagine that a provider of airline services might branch out into producing foodstuffs, or conversely that a food producer might now be running an airline service. This is a dubious proposition…

The Opponent carries a significant burden under section 60(b). It is not sufficient for the Opponent to merely prove a reputation in the marketplace in a particular trade mark to make out grounds under section 60. The Opponent must also prove that because of the reputation of that trade mark, the use of the Opposed Mark is likely to deceive or cause confusion.

The words ‘because of’ are crucial. They mandate that there must necessarily be a nexus between the established reputation and the likelihood of confusion. It is not sufficient to simply put evidence of reputation on the table and assume that there is a potential for confusion. In order to determine whether confusion may result, the nature of the ‘reputation’ of that particular ‘other trade mark’ needs to be carefully considered.

Moreover, section 60 is not a bar to registration unless the use of the Opposed Mark is likely to deceive or cause confusion. A mere possibility of confusion is not sufficient.

In the present instance, the Opponent’s Trade Mark and the Opposed Mark are identical.

Therefore, the risk of confusion is to be determined by the likelihood (not the mere possibility) that a consumer would assume a connection in the course of trade between the goods bearing a mark, and services provided under the same mark.

To establish that there would likely be confusion, the opponent must prove that a consumer would likely assume that some form of brand extension had taken place. An assumption of brand extension might encompass any assumed use by the Opponent and/or use licensed by the Opponent.

We refer to our previous submissions regarding the likelihood of consumers assuming that a provider of airline services might branch out into producing foodstuffs, or conversely that a food producer might now be running an airline service. Clearly any such proposition on notional grounds is unsustainable.

Therefore, the Opponent must establish that because of its reputation in JETSTAR, confusion is likely to occur. The first step in this process is establishing that a reputation exists. The second step is establishing the extent of that reputation.

It cannot be disputed that the Opponent has a reputation in its JETSTAR mark for air travel services. The Australian domestic air travel industry is limited to a small number of major players. Given the necessity of air travel, any airline with national coverage is likely to have a significant reputation in its primary brand.

However, the existence of a reputation (even a substantial reputation) does not effectively grant a trade mark owner a limitless monopoly. The extent of any reputation must be considered according to the circumstances of each case.

15.   In response, Mr Cobden argued strongly that:

The result of the scope and scale of its primary airline and secondary services offered under the mark, the very substantial marketing and advertising activities undertaken by Qantas since 1 December 2003 and the industry recognition it has achieved, is that the JETSTAR trade mark has become for practical purposes ubiquitous in Australian society and Australian consumers regularly encounter it as they go about their day-to-day activities. Qantas submits that it is beyond doubt that, as at the relevant date, it had established a very substantial reputation (of the kind described in Radio Corporation v Disney and Others[7]) in its JETSTAR trade mark…

It is abundantly clear that a significant number of members of the public, seeing JETSTAR-branded coffee, tea, confectionery and the like (or advertising for them), would be caused to think that they stem from Qantas’ JETSTAR operations, or are connected with it in some way. Qantas supplies meals and beverages under its JETSTAR mark. Further, it has distributed substantial quantities of JETSTAR branded confectionery.

The public is very familiar with the brand extension that Qantas employs for the goods and services offered under its JETSTAR trade mark. Those who saw JETSTAR-branded class 30 goods would be likely (because of the pervasive awareness of Qantas’s JETSTAR mark) to think that those goods were a line extension of the goods and services offered by Qantas under the JETSTAR trade mark; or that the distribution of them had been licensed by Qantas to the distributor.

Further, although Sumatra Tobacco has an existing registration for a logo comprising the word JETSTAR and an image of a winged lion’s head atop 5 stars, in class 34 for cigarettes (and the like), there is no evidence that any such branded products have ever been sold in Australia (or elsewhere). Mr Knowles in his declaration makes no mention of any use by Sumatra Tobacco of that logo. In the absence of any use of that logo by Sumatra Tobacco in Australia, there is no competing reputation in Australia for the JETSTAR mark nor any reason for consumers not to make the connection or link between such branded class 30 products and Qantas’ JETSTAR mark.

[7] (1937) 57 CLR 448.

16.   Having weighed into the balance the evidence and arguments of both parties, I find that I am persuaded by the circumstances of the opponent’s case. Mr Knowles referred in his submissions to the oft-quoted and still relevant principles for the assessment of likelihood of confusion between trade marks set out by Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd.[8] While it is true that these principles dictate that a ‘mere possibility of confusion is not enough’, they also provide that:

A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.[9]

[8] [1953] HCA 73; (1954) 91 CLR 592 at 594-5.

[9] Ibid.

17.   I believe that the opponent here has met the necessary criteria for success in terms of section 60. Given the nature and extent of the opponent’s reputation in its ‘JETSTAR’ trade marks, as can be easily inferred from its extensive evidence of use, the likelihood is very great that ordinary persons would be caused to wonder whether an item of pastry, bread, (or any of the other items covered by the opposed application), identified by the word ‘JETSTAR’, had originated in some way or other from the opponent. The opponent has made its case under section 60.

Decision

18. Subsection 55(1) of the Act provides:

(1)      Unless the proceedings are discontinued or dismissed, 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.

Note:For limitations see section 6.

19.   I find that the opponent has met the onus upon it, and has succeeded according to the balance of probabilities in relation to the ground it pressed under section 60. I therefore refuse to register trade mark application number 1301668.

Costs

20. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs, according to the official scale set out in Schedule 8 of the Trade Marks Regulations 1995, against the unsuccessful trade mark applicant, N.V. Sumatra Tobacco Trading Company.

Claudia Murray

Hearing Officer

Trade Marks Hearings

11 May 2012