Re Sakata Rice Snacks (Australia) Pty Ltd
[1998] ATMO 60
•4 December 1998
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS
WITH REASONS
Re:Trade mark application 673556 in the name of SAKATA RICE SNACKS (AUSTRALIA) PTY LTD.
Background
Application number 673556 was filed on 27 September 1995 in the name of Sakata Rice Snacks (Australia) Pty Ltd (the applicant). The applicant seeks to register the word SAKATA as a trade mark in respect of the following goods in class 30:
Rice, rice snacks, rice cracker biscuits, rice based snack foods, rice porridge and rice dinners; and rice products, flour and preparations made from cereals including cereal preparations in the form of breadsticks, pretzels and chips, being goods included in class 30.
During examination of the trade mark, grounds for rejection were raised under section 41 of the Trade Marks Act 1995 (the Act), on the grounds of the geographical significance of the word. Sakata is the name of a city in Japan, with a population of just over 100,000. It is a major seaport which houses large national stores of government rice holdings. The city's surrounding region is known for the production of agricultural products such as rice, potatoes and fruit.
The examiner maintained that, in respect of the designated goods, the trade mark was totally lacking in inherent adaptation to distinguish. Accordingly, the registrability of the mark was considered in terms of subsection 41(6) of the Act. After evaluating the evidence relied upon by the applicant, the examiner found that the applicant had failed to meet the requirements of paragraph 41(6)(a) of the Act and the grounds for rejection were maintained in the third report.
The applicant waived its right to be heard and sought a decision on the written record. The applicant's attorney wished to rely on previous submissions. However, the Registrar's attention was drawn to the recent Federal Court decision of Blount Inc. v The Registrar of Trade Marks[1]. Here, the Court held that the word OREGON did, in fact, distinguish some of the designated goods.
[1] Blount Inc. v The Registrar of Trade Marks (1998) AIPC 91-408;
Discussion
The matter for my decision is whether the applicant's trade mark is capable of distinguishing the designated goods in terms of section 41 of the Act. Subsection 41(2) directs that, if a trade mark is not capable of distinguishing the applicant's goods from the goods or services of other traders, the application must be rejected.
Subsections (3) to (6) of section 41 of the Act are concerned with the process of determining whether a trade mark is capable of distinguishing. In applying these principles, Justice Branson in the Oregon case, supra, observed that the Registrar may conclude:
(a)that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or
(b)that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or
(c)that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of distinguishing the designated goods or services.
Justice Branson noted that, if the Registrar reaches conclusion (a), then he or she must accept the application in accordance with subsection 33(1) of the Act. If the Registrar reaches conclusion (b), the provisions of paragraphs (a) and (b) of subsection 41(6) apply. Finally, if the Registrar reaches conclusion (c), the provisions of paragraphs (a), (b) and (c) of subsection 41(5) apply.
Justice Branson noted that, in determining a matter under section 41, the Registrar is to be "persuaded of the matter according to balance of probabilities". This is, that the Registrar, in reaching a decision on the relevant facts, is more satisfied than not that the applicant's trade mark is capable of distinguishing the designated goods.
The process of determining a matter under section 41, as described by Justice Branson, involves two steps. The first step is to decide whether the trade mark is to any extent inherently adapted to distinguish the designated goods. The second step is only taken if the Registrar is not satisfied that the trade mark is capable of distinguishing, solely on the basis of the inherent qualities of the mark. This latter step requires the Registrar to consider the effect of the use of the mark and other circumstances (if applicable), which may serve to satisfy the Registrar that the trade mark is capable of distinguishing or, in the case of subsection 41(6), that it does so distinguish.
To take the first step in the process, I must determine the extent to which the word SAKATA is inherently adapted to distinguish the designated goods. On the question of inherent adaptation, Justice Branson in the Oregon case, supra, upheld the test set out by Kitto J. in Clarke Equipment Co v Registrar of Trade Marks[2].
[2] Clarke Equipment Co v Registrar of Trade Marks 111 CLR 511;
The question to be answered, then, is whether other traders, in the ordinary course of their business and without improper motive, are likely to want to use the word in a manner which would infringe a registered trade mark granted in respect of it. Kitto J. recognised that, in protecting the right of other traders to use a word in the ordinary course of their business and for the sake of its ordinary significance, the Registrar must consider any use of the word that other traders may fairly want to make.
In the present matter, I am to determine whether other traders will need to use the word SAKATA for the sake of its geographical reference. The applicant has made various submissions concerning the extent of the geographical significance of the word and, in view of these submissions, I will comment first on the matter of the ordinary signification of the word.
The applicant contends that the geographical significance of the word SAKATA is little known in both Australia and Japan. I note, however, that the city of Sakata is recognised in major geographical references such as The Getty Thesaurus of Geographic Names, Webster's Geographical Dictionary and The Times Atlas of the World.[3] Indeed, the Port of Sakata even has its own Internet home page.[4] Furthermore, there is no information before me to show that the word SAKATA holds any other common signification. On this basis, I consider that the word SAKATA is, according to its ordinary meaning, a geographical name.
[5] Oxford University Press v Registrar of Trade Marks 17 IPR 509, at p.530;
The point is if goods of the kind in question are produced at the particular place or in the area, or if it is reasonable to suppose that such goods in the future will be produced there, other traders have a legitimate interest in using the geographical name to identify the goods, and it is this interest which is not to be supplanted by permitting any one trader to effect trade mark registration.
The applicant's goods include rice and rice products, as well as other cereal and potato preparations. The city of Sakata is located in the Shonai region of Japan, which is known for the production of rice and other agricultural products. The references on file indicate that Sakata is a large industrial port and that it is the focal point for the storage, distribution and/or manufacture of Shonai rice and other major staples of this area. In light of these facts, I do not think there is any doubt that the city of Sakata has an obvious or potential connection with the designated goods. On this basis, I must agree with the examiner that the mark is not to any extent inherently adapted to distinguish the designated goods. Having reached this conclusion, the effects of paragraphs (a) and (b) of subsection 41(6) apply.
This subsection reads:
(6) If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:
(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant - the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
(b) in any other case - the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.
The applicant's evidence consists of two statutory declarations by Mr. Hiroshi Suzukawa, the Deputy Managing Director of the applicant. The first declaration, dated 30 June 1997, details information regarding the city of Sakata and its surrounding region. The second declaration, dated 21 May 1998, includes exhibits "HS 1" to "HS 14", consecutively. This declaration contains information regarding the history of the applicant and its parent company in Japan, and the applicant's use of the trade mark in Australia and overseas.
The applicant's evidence and submissions relate to five main points. These points are as follows:
(i) The geographical significance of the word SAKATA is little known in Australia or Japan and there is little likelihood, therefore, that other traders will wish to make legitimate use of the word in connection with their own goods;
(ii) The applicant's goods do not originate from the city of Sakata and there is no inherent quality of the goods that relates to the geographical significance of the word;
(iii) The automated production of rice crackers is a highly specialised and expensive process. As a result, the industry is limited and this in turn limits the possibility of others who might wish to make legitimate use of the word on goods of the relevant kind;
(iv) The applicant and its parent company have used the word SAKATA to such an extent that it distinguishes their goods in the marketplace; and
(v) The parent company, in Sakata Japan, enjoys a substantial reputation in the word. The word SAKATA has been associated with the company since 1951, as part of its company name Sakata Rice Snacks Inc. Japan. This reputation serves to limit the legitimacy of others now seeking to use the word in respect of goods of the relevant kind.
Points four and five relate specifically to the matter of the acquired distinctiveness of the trade mark, in accordance with paragraph 41(6)(a). However, for the sake of completeness, I will address each of the points in order.
I have already addressed the matter raised under point one, of the common significance of the word SAKATA. I will begin therefore by addressing the matter of the origin of the applicant's goods. The applicant states that its rice crackers are manufactured at the Company's factory premises in Australia and contain only rice which is grown and milled in Australia. Further, Mr. Suzukawa states, in the declaration of May 1998, that
17. There is no particular quality or characteristic of the rice produced in the town Sakata or in the Shonai region which has any bearing on any characteristic, quality or attractiveness of the rice cracker products manufactured by the parent company.
These facts, however, add nothing to the trade mark's capacity to distinguish. The trade mark consists of the word SAKATA, simpliciter. The word is, according to its ordinary meaning, a geographical name and one that is apt for normal description on the basis of the city's connection with the designated goods. The only observation that this submission might lead to is that the trade mark could fall foul of section 43 of the Act, on the basis that the use of the word on goods not originating from the city of Sakata would be likely to deceive or cause confusion.
In regards to the third point, the applicant submits that there is little possibility of other traders wishing to use the word in respect of rice crackers, given that the processing of the goods is highly complex and expensive. Mr Suzukawa attests to the fact that, at present, there are only three other automated rice cracker manufacturing plants in Japan and five in total, worldwide, none of which exist in or near the town of Sakata. He says that the applicant's parent company developed the technology to manufacture the "Usuyaki" cracker (traditional hand made Japanese rice crackers).
This may well be the present state of the rice cracker manufacturing industry. However, I do not think that I can regard the present or future processing of goods such as crackers, chips and pretzels to be limited by available technology. I do not consider that the applicant's submissions in this regard support the view that there is a limited possibility of other traders wishing to make legitimate use of the word, simply because the relevant industry, at present, is considered to be small. The point is if goods of the relevant kind are produced in Sakata or in the surrounding region, or if it is likely that such goods will be produced there in the future, other traders have a legitimate interest in using the word SAKATA to identify the goods.
As I have previously noted, the last two points, concerning the use of the mark and the applicant's reputation, relate directly to the matter of the acquired distinctiveness of the trade mark. The applicant must establish that the trade mark does in fact distinguish the applicant's goods.
The evidence of use shows that the word SAKATA has been used as part of the name of the parent company since 1951. The parent company is located in the city of Sakata and has manufactured and packaged rice based snack products on contract since its beginnings in 1951. However, it was not until 1995 that the parent company adopted SAKATA as a trade mark in respect of its products. The applicant's first use of the trade mark occurred when it imported products bearing the trade mark, from the parent company, for on-sale into New Zealand in 1995. The applicant then began to manufacture and distribute products bearing the trade mark in Australia in March 1997. The applicant holds all rights to the use of the trade mark in Australia and now claims to hold 41.8% of the Australian market share for rice cracker products.
Since the applicant has only used the trade mark in Australia since March 1997, it is clear that, when the provisions of subsection 41(6) are considered, the applicant cannot rely solely on their use of the trade mark in Australia. So the question remains as to whether the use of the trade mark overseas, by the applicant and its parent company, can serve to establish that the trade mark does in fact distinguish the applicant's goods in Australia.
The courts have begun to recognise the effect of overseas use on the position of a trade mark in Australia. In the recent Federal Court case of Campomar Sociedad, Limitada & Anor v Nike International Ltd & Anor[6], Justice Burchett commented on the recognition given by the courts to use in a foreign country when assessing the claims of persons who have entitlement to marks overseas:
[6] Campomar Sociedad, Limitada & Anor v Nike International Ltd & Anor [1998] 776 FCA (7 July 1998);
At the very close of the twentieth century, as international commerce is rapidly blurring the boundaries between countries, this point of principle is even more important than when it was first perceived. It ought therefore be fully reflected in the decisions of the courts.
In this matter, the Judge was considering the acquisition of reputation and the extent of "other circumstances" (as per paragraph 44(3)(b) of the Act). Nevertheless, the Judge's comments establish that the use of a mark in a foreign country can have an impact on the position of that trade mark in the Australian marketplace. Given that the issues of trade and common markets are also of relevance here, I see no reason why the same considerations cannot be made in the case of acquired distinctiveness. However, the effect of the foreign user must be to establish that the trade mark distinguishes the designated goods as being those of the applicant, in the Australian marketplace.
In the present case, the applicant's parent company has used the word SAKATA as part of its company name since 1951. However, the parent company's reputation in this regard appears to be due only to its recognition by the local community as a long-standing manufacturer. There is no indication that this reputation has permeated the relevant Australian market, or that it equates to recognition of the word as a badge of trade origin. Therefore, I do not consider that the parent company's claim to a reputation in the word contributes to the acquired distinctiveness of the trade mark in Australia.
I turn now to consider the extent to which the word SAKATA functions as a trade mark. The applicant has only used the word as a trade mark, in respect of some of the designated goods, since 1995. I agree that the extent of sales and the market share within Australia is quite substantial in respect of rice cracker products. However, in Australia, the period of use of the trade mark is minimal and the first use of the mark post dates the filing date of the application. Furthermore, there is no evidence of the extent of sales or marketing activity, of goods bearing the trade mark, outside of Australia. I must therefore agree with the examiner on this point also, that the applicant has failed to meet the requirements of paragraph 41(6)(a).
Conclusion
I have found that the trade mark is not to any extent inherently adapted to distinguish the designated goods. Furthermore, the applicant has failed to establish that the trade mark distinguishes the designated goods, as prescribed by subsection 41(6) of the Act. I therefore reject Trade Mark application 673556 in accordance with subsection 33(3) of the Act.
Michelle Edlington
Senior Examiner
4 December 1998
ii) Merriam-Websters Geographical Dictionary, 3rd Edition, 1997, Merriam-Webster Inc. USA;
iii) The Times Atlas of the World, 9th Comprehensive Edition, 1993, Times Books, London;
Key Legal Topics
Areas of Law
-
Commercial Law
-
Statutory Interpretation
Legal Concepts
-
Statutory Construction
-
Jurisdiction
-
Remedies
-
Appeal
0
0
0