Re Selskar Pty Ltd

[1993] ATMO 42

trade marks act 1955

decision of a delegate of the registrar of trade marks

Re:Trade mark application no. 548082 in the name of SELSKAR PTY LTD - application for registration under section 34(1) of the Act on the grounds of honest concurrent use

Application number 548082 in the name of SELSKAR PTY LTD (the applicant) was lodged on 21 December 1990 for a series of two marks as shown below for the statement of services subsequently amended to read:

Retail services relating to the sale of vehicle parts and accessories, tools and vehicle related publications, all being services in class 42.

In a report of 15 May 1991, an examiner of trade marks objected to the marks' registration under s.33 of the Act on the grounds that they so closely resembled prior trade mark application nos. 503325(12) and 503326(42) in the name of SCOTTS SPARE PARTS PTY LTD (Scotts), and 543036(16) and 543037(25) in the name of AUTO ONE, as to be likely to deceive or cause confusion, all for the mark as shown below.

The applicant applied for and was granted, deferment of acceptance under s.33(3), and subsequently sought the application of s.34(1) on the grounds of honest concurrent use.  The applicant submitted evidence to support this application in the form of a leading declaration by Mr Noel Comerford, the Managing Director of the applicant company, together with supporting declarations.  This evidence was considered by the examiner but she advised in a report of 28 February 1992 that she could not recommend acceptance under s.34(1).  This was because the relationship between the applicant and Scotts appeared to that of a proprietor and user, and therefore s.34(1) was not applicable.  The applicant then requested that the issue of the application's registrability be set down to be heard and the matter came before me as the Registrar's delegate in Canberra on 19 April 1993.  Mr Leon Allen of Shelston Waters, patent and trade mark attorneys of Sydney, represented the applicant at the hearing.

Mr Allen submitted that, as the only outstanding objections to the mark's registration were those taken under s.33 of the Act, the provisions of s.34(1) regarding honest concurrent use should be applied.  He submitted that all the criteria for the favourable exercise of the Registrar's discretion under this section had been met.  The evidence in support already lodged showed that the mark had been used widely by the applicant since 1985 in the Wagga, NSW, area following Mr Comerford of the applicant company obtaining verbal approval for such use from Mr Scott, the proprietor of the cited marks.  The mark was recognised by both the public and the trade in the Wagga area as being identified with the applicant.  The applicant conducted a 'local' Wagga business which had a turnover of over one million dollars per year.  He said that the applicant had opposed the registration of two marks by Scotts and submitted a copy of a declaration by William John Scott, which formed part of Scotts' evidence in answer in those cases.  This, and other evidence, was intended to show that the marks had been used at the same time and in the same manner in different areas in NSW - Penrith and the immediate area by Scotts, and Wagga and immediate area by the applicant - with no evidence of confusion.  The applicant conceded that Scotts was the first user of the mark.  However, there was some dispute as to whether consent had been intended or properly inferred as to its use and also as to the date when the parties had met.  Nevertheless, he said that there was no doubt that adoption of the mark by the applicant had been honest and that it had been used concurrently with Scotts' mark for some number of years with no confusion.  In December 1990, a letter was received from Scotts' solicitors demanding that the applicant cease using the mark.

Mr Allen cited a number of precedent cases to support the proposition of the exercise of the Registrar's discretion under s.34 whilst the cited marks were still pending, including Foodland Associated Limited v John Weeks Pty Ltd (1988) AIPC 90-466, Johnson and Johnson v S.C.Johnson & Son Inc. (1984) 3 IPR 429 and D.R.Shanahan's book Australian Law of Trade Marks and Passing Off at P.202 where reference was made to Olin Corp. v Pacemaker Pool Supplies (1984) AIPC 93-216. He said that the factors to be considered in assessing an applicant's case under s.34 had been broken down in John Fitton & Co's Appn (1949) 66 RPC 110. These included:

1. the honesty of the concurrent use;

2. extent of the use in duration, area and volume;

3. the degree of confusion likely to ensue;

4. whether any instances of confusion have in fact been proved;

5. the relative inconvenience which would be caused to the parties by allowance or denial of registration.

Mr Allen said that the honesty of adoption and use of the mark was the crux of the matter.  The applicant had known of the existence of Scotts' mark - this had been conceded in a declaration by Mr Comerford - but he had honestly believed that Mr Scott had verbally authorised his use of it.  Further, it was not until the mark had been used for some years that Scotts had done something to stop the applicant from using the mark.  For support regarding the honest adoption of a mark where such pre-knowledge existed, Mr Allen referred to such cases as Alex Pirie & Sons Ltd's Appn (1933) 50 RPC 147, Parkington & Co Ltd's Appn (1946) 63 RPC 171 and Cohen v Fidler & Co (1916) 33 RPC 129. It was common ground that the applicant's use of the mark had been open and honest, and such use was not calculated to deceive or to gain advantage in terms of passing off. The duration and extent of the applicant's use, and the lack of complaint or confusion were all factors which created a suitable situation for the application of s.34 to the present case. There had been a physical separation of the actual use of both the applicant's and Scotts' marks. The marks, though identical, had been used in two areas remote to each other - Wagga and Penrith. Mr Allen said that the Registrar's discretion under s.34 could extend to the application of that section to the present mark for a geographical area which included Wagga and its immediate surroundings.

With respect to whether there had been any instances of confusion and of the likelihood of actual confusion, Mr Allen said that the reality was that the marks had been used concurrently for years without any confusion.  He could not see a scenario where there would be any, particularly if the Registrar applied s.34(1) with an endorsement restricting registration to the Wagga area alone.

In relation to the relative inconvenience to the parties, Mr Allen said that, if s.34(1) was applied and the status quo consequently maintained in respect of actual use, then neither side would need to change advertising, packaging or printing etc.  However, if the applicant was to be denied registration, it would suffer substantial losses because of those factors.  The impact of the cost of change compared with the actual amount of business would be great.  On the other hand, the inconvenience to the owners of the cited marks would appear to be zero unless, as has never been suggested, they were proposing to commence business using the mark in the Wagga area.  He said that this unlikely possibility would appear to be denied under Common Law.

Decision

Section 34(1) of the Act reads as follows:

In case of honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it proper so to do, the Registrar may permit the registration of trade marks which are substantially identical or deceptively similar, or, but for the honest concurrent use or other special circumstances would be deceptively similar, for the same goods or services or other goods or services, by more than 1 proprietor subject to such conditions and limitations (if any) as the Registrar imposes.

It has been conceded by the applicant that the mark in question is substantially identical to the logo in the cited marks.  I do not think that the addition of the words AUTO 1 to those marks, despite the prominence of that material, alters the fact that the present mark is deceptively similar to them.  The services of the present application are directly related to the marks owned by Scotts - 503325(12) and 503326(42).  It is well settled that, in matters concerning honest concurrent use, the relevant date before which that use must have occurred is the date of application for registration made by the party seeking to show honest concurrent use:  "Granada" Trade Mark [1979] RPC 303, 312, Gloy and Empire Adhesives Ltd's Application (1934) 51 RPC 63, 69. The relevant date here, then, is 21 December 1990. The date from which the applicant adopted the mark is a matter of some dispute but it must be from at least late 1987. This may be inferred from Mr Scott's declaration of 10 December 1992 lodged as part of evidence in answer in opposition proceedings against application no. 503326 and submitted by Mr Allen at the hearing. Thus the marks would have been in use concurrently for at least three years prior to the application for registration.

I must agree with Mr Allen that the prime requirement for establishing a case under s.34 is the honesty of this use.  The applicant has conceded that it is not the author of the mark and attributes that status to Mr Scott.  What is in dispute is the method of, and circumstances surrounding, the applicant's adoption of the mark.  I have noted the comments regarding the matter made in the declaration by Mr Comerford of the applicant and also those of Mr Scott in his declaration.  The latter declaration must be regarded as indirect to the present case which is an ex parte matter, and the weight and probity of that evidence in this instance have yet to be established.  I think that the most that can be said in the face of the conflicting assertions is that the circumstances of the mark's adoption have yet to be settled.  Thus, I cannot be satisfied as to the honesty, or otherwise, of the present mark's use by the applicant.

Given this dilemma, I could decide not to exercise the Registrar's discretion to apply s.34 in the present instance and refuse to register the mark.  However, given the current circumstances where the matter of honesty could well be decided by full disclosures from both sides in an opposition matter yet to be decided, I have concluded that the fairest course is to decide that the provisions of s.34 are not available at this time and that the application should be returned to its status of "acceptance deferred under s.33(3)".

Ian Forno
Hearing Officer

7 May 1993