Richemont International SA v Cabot Company Limited

[2015] ATMO 72

TRADE MARKS ACT 1995

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

Re:Opposition by Richemont International SA to extension of protection to international registration designating Australia 1579916 (International Registration No. 1078576) – – held by Cabot Company Limited.

Delegate:	Bianca Irgang
Representation:	Opponent: Ms Natalia Blecher of Corrs Chambers Westgarth Holder: Written submissions
Decision:	2015 ATMO 72 reg. 17A.33: Sections 44 and 60 pressed – no ground of opposition established.

Background

1. Cabot Company Limited (‘the holder’) has applied for extension of protection of International Registration Designating Australia (‘IRDA’) 1579916 in class 14 of the International Classification of Goods and Services. Relevant details of the IRDA are set out below:

   Trade mark:  

   IRDA:  1579916

   International Registration:  1078576

   Priority Date:  25 July 2013

   Specification:  Class 14: Horological and chronometric instruments, watches and clocks

2. The IRDA was advertised as accepted for possible protection in the Australian Official Journal of Trade Marks on 19 December 2013. Richemont International SA (‘the opponent’) filed a Notice of Intention to Oppose the extension of protection on 19 February 2014 followed by a statement of grounds and particulars on 19 March 2014. These documents, taken together, constitute the Notice of Opposition (‘the Notice’). The holder filed a notice of intention to defend on 24 April 2014. Thereafter the opponent and holder filed evidence as provided by the Trade Mark Regulations 1995 (‘the Regulations’).

3. I heard the matter in Canberra on 11 June 2015 as a delegate of the Registrar of Trade Marks. Ms Natalia Blecher of Corrs Chambers Westgarth appeared for the opponent. The holder was not present at the hearing but did provide written submissions for consideration.

   Grounds of Opposition

4. In terms of Regulation 17A.34 the Notice nominated the grounds of opposition under sections 44 and 60 under the Trade Marks Act 1995 (‘the Act’). The onus is upon the opponent to establish one or more of its grounds of opposition. Gyles J has referred to the standard of proof required in terms of a ‘balance of probabilities’.[1] His findings upon that issue, arrived at after a consideration of the relevant authorities, have been discussed with approval by Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks[2].

   [1] See Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599

   [2] [2009] FCA 891, para 22-27 (2009) 82 IPR 13. See also Sports Warehouse Inc v Fry Consulting [2010] FCA 664; (2010) 87 IPR 300 at [36] to [39]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011) at [16] to [32]

5. Therefore, the grounds of opposition I am considering are those under sections 44 and 60 of the Act. Should the opponent establish one ground of opposition in relation to all of the listed goods, there is no requirement for the other ground of opposition to be considered.

   Evidence

6. The evidence consists of the following statutory declarations:

Declarant	Position	Date Made	Exhibits
Evidence in Support
Edwin de Vries	IWC Schaffhausen Brand manager employed by Richemont Australia Pty Ltd	1.08.14	EDV-1 to EDV-26
Eric Paul van der Griend	Director of Watches of Switzerland Pty Ltd	31.07.14	EVDG-1 to EDVG-4
Evidence in Answer
Richard Lawrence Bliss	Director and Company Secretary of Cabot Company Limited	5.11.14	RLB-1 to RLB-9
Tracey Ann Monckton	Legal Executive employed by Henry Hughs IP Ltd	7.11.14	TAM-1 to TAM-5
Evidence in Reply
Craig Raymond Douglas	Private Inquiry Agent and director of Nationwide Research Group Pty Ltd	3.2.15	-

Opponent’s Evidence

1. The declaration of Edwin de Vries ( the ‘de Vries declaration’) states that the opponent is a Swiss holding company that, through its various subsidiaries designs, manufactures, distributes and sells luxury jewellery, watches, leather goods, writing instruments, clothing and accessories. The opponent’s brands include CARTIER, PIAGET, PANERAI, JAEGER- LECOULTRE, BAUME & MERCIER, ALFRED DUNHILL, CHLOE, MONTBLANC and IWC.

2. In 2000, the opponent acquired IWC Schaffhausen (exhibit EDV-1). According to Mr de Vries the opponent’s IWC Schaffhausen business was founded in 1868 in Schaffhausen, a Swiss town known for its clock and watchmaking dating from at least as early as the 16^th Century. By 1875, IWC Schaffhausen employed 196 employees and the following decades saw the business grow and the development of a range of innovative timepieces including the world’s first digital display watch in 1885. Mr de Vries goes on to state that over the course of the 19^th and 20^th Centuries, IWC Schaffhausen developed a range of six watch “families”, which have remained in continuous production to the present day. These “families” are Portugese, Da Vinci, Aquatimer, Ingenier, Pilot’s Watches and Portofino.

3. The de Vries declaration states that as of November 2012, the opponent was the sixth largest corporation by market capitalization in the Swiss Market Index. As of 2009, the opponent was the world’s third-largest luxury goods company. Mr de Vries states that the opponent employs around 30,000 people in over 30 countries throughout the world. The opponent operates in regional structure comprising of its headquarters in Switzerland and regional offices in North America, Japan and the Asia Pacific.

4. Mr de Vries declares that the opponent has marketed and sold watches and their parts under or by reference to the IWC trade mark and has offered servicing and restoration services by reference to that trade mark, on a substantial scale, throughout the world, including Australia, for many years. The details of the opponent’s Australian registration for the IWC trade mark are as follows:

Number(s)	Class	Trade Mark
664982	14	IWC
664985	14	IWC INTERNATIONAL WATCH CO SCHAFFHAUSEN
1484018	14, 35
1488835	3, 9, 16, 18, 25, 34, 35	IWC
1491176	14, 35

1. The de Vries declaration states that since around 1967, all watches produced by IWC Schaffhausen have borne the IWC trade mark. According to Mr de Vries, the trade mark is applied to watches and watch bands as well as to boxes and cases, product manuals, guarantee cards and warranty booklets. Examples of boxes, cases and guarantees are contained in exhibit EDV-3 accompanying the de Vries declaration. Examples of product manuals and warranty booklets bearing the IWC trade mark are contained in exhibit EDV-4.

2. Mr de Vries states that the opponent provides IWC branded timepieces through its network of IWC branded boutiques and service centers located across Africa, Asia, Australia, New Zealand, Europe, Middle East, North America, Russia and South America. The opponent’s IWC branded timepieces are also distributed through the opponent’s network of authorised retailers. Mr de Vries states that the opponent has sold IWC branded watches and watch parts to Australian consumers since at least as early as 1972. In Australia, the authorized retailers  are located in Sydney, Melbourne, Perth and Brisbane and include: Watches of Switzerland, Gregory Jewellers and The Hour Glass (exhibit EDV-6A).

3. The de Vries declaration also outlines the opponent’s advertising and promotion efforts in Australia which include media channels such as consumer catalogues (exhibits EDV-8, EDV-8A, EDV-8B, EDV-8C), online (exhibits EDV-9 and EDV-10), point-of-sale materials (exhibit EDV-12), a self-published magazine (exhibits EDV-13, EDV-13A, EDV-13B), local  advertising (exhibits EDV-14, EDV-14A, EDV-14B) and international advertising (exhibits EDV-15, EDV-15A, EDV-15B, EDV-15C), retailer promotion (exhibits EDV-16 and EDV-17), promotional events (exhibits EDV-18, EDV-19) and celebrity endorsements which include Cate Blanchett, Steve Waugh, Cathy Freeman, Dawn Fraser, Kevin Spacey, Emily Blunt, Ewan McGregor and Ronan Keating (exhibits EDV-20 and EDV-20A).

4. The declaration of Eric van der Griend (the ‘Griend declaration’) states that the opponent sells high end watches manufactured in Switzerland through retail outlets such as Watches of Switzerland. The cost of the opponent’s watches range from approximately AU$1,000 to tens of thousands of dollars. Further advertising of the opponent’s goods bearing the IWC trade mark has taken place in Australia through Watches of Switzerland (exhibit EDVG-1 through to EDVG- 3 accompanying the Griend declaration).

   Holder’s Evidence

5. The declaration of Richard Bliss (the ‘Bliss declaration’) states that the holder trades as Cabot Watch Company and the business(?) was founded in 1972 by Ray Mellor for the express purpose of manufacturing and supplying wristwatches under the CWC brand to the British Armed Forces. Mr Bliss declares that over the decades the British Armed Forces have extended invitations to the holder to tender contracts for the supply of watches. Many of these contracts were awarded to the holder. Mr Bliss further states that there were many occasions where the British Armed Forces made direct purchase requests (purchases without supply contracts) for watches from the holder.

6. According to Mr Bliss, between 2005 and 2007 the holder supplied 17,520 watches to the British Government’s Ministry of Defence. He states that all the watches sold by the holder have complied with the established watch standards of the British Government’s Ministry of Defence and contained the CWC trade mark on the watch face or wrist band. He asserts that because of the affiliation of the CWC watch brand with the British Armed Forces, and the strong reputation of the CWC watch as a high quality product that complies with the British Government’s Ministry of Defence standards, a non-military consumer demand developed for the holder’s CWC wristwatches.

7. The Bliss declaration states that the holder recognized this demand and in the late 1980s commenced selling its CWC watches into the consumer market, primarily in the United Kingdom. Mr Bliss states that the sales were made through the company Silverman’s Limited. Since that time, Silverman’s Limited has been the exclusive distributor of the holder’s CWC watches to consumers and other retailers (exhibit RLB-4 accompanying the Bliss declaration). According to Mr Bliss, the opponent produces CWC military timepieces for a niche market and the CWC trade mark is clearly displayed on the face of each watch (exhibit RLB-4).

8. Mr Bliss states that since 2008 the opponent has sold in excess of 8,000 units of CWC branded time pieces internationally, with a retail value in excess of 1.5 million pounds. Mr Bliss claims that it is common for CWC watches to be sold on third party auction websites such as eBay and Amazon. Exhibits RLB-6 attached to the declaration contains printouts from the eBay website which show listing for items corresponding to the search for “CWC watch”. According to Mr Bliss the opponent has been selling CWC branded timepieces on a retail basis to Australian residents since the mid-1990s. Paragraph 13 of the Bliss declaration contains a break down of the number of CWC branded timepieces sold in Australia for the years 2008 until 2014. The numbers of watches sold in Australia are small. I also note that in 2004 a small number of pocket watches were sold to the Australian Government Department of Defence (exhibit RLB-8).

   Discussion

   Section 44 ground

   19. Under the section 44 ground, only s 44(1) of the Act is relevant here and is reproduced below:

   (1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of goods (applicant's goods) must be rejected if:

   (a) the applicant's trade mark is substantially identical with, or deceptively similar to:

   (i) a trade mark registered by another person in respect of similar goods or closely related services; or
   (ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

   (b) the priority date for the registration of the applicant's trade mark in respect of the applicant's goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

   Note 1:  For deceptively similar see section 10.

   Note 2:  For similar goods see subsection 14(1).
   Note 3:  For priority date see section 12.

9. To establish section 44 (1) the opponent must show all of the following:

   Øa trade mark (or trade marks), either registered or pending registration, in the name of a person other than the holder, and in relation to which the opposed trade mark is either substantially identical or deceptively similar;

   Øthe trade mark(s) in the name of the other person must be in respect of similar goods or closely related services; and

   Øthe priority date(s) of the trade mark(s) of the other person is (are) earlier than the priority date of the holder’s trade mark.

10. The opponent has specified trade mark registration no. 664982 (‘the IWC trade mark’) in support of the section 44 ground of opposition. I note that the opponent’s registration has an earlier priority date than that of the opposed IRDA. Therefore, the key issue to be decided is if the holder’s opposed IRDA is substantially identical with or deceptively similar to the opponent’s trade mark. The respective trade marks are depicted below:

Opponent’s trade mark	Holder’s trade mark
IWC

1. It is clear the holder’s trade mark is not substantially identical with the opponent’s IWC trade mark when compared side-by-side in accordance with the test set out by Windeyer J. in Shell Company (Aust) Ltd v Esso Standard Oil (Aust) Ltd[3].

   [3] (1963) 109 CLR 407 at 414

2. Deceptive similarity is, however, defined by section 10 of the Act. The determination of deceptive similarity requires a comparison of the impression which persons of ordinary intelligence and memory would have upon recalling the opponent’s trade mark, to the impression that they would form from the applicant’s trade mark[4]. The likelihood of deception must be finite and non-trivial[5] and the trade marks are not to be considered side by side.

   [4] The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, per Windeyer J at 415 ‘Shell’

   [5] Registrar of Trade Marks v Woolworths Limited 45 IPR 411, per French J at [43]

3. The test to determine whether trade marks are ‘deceptively similar’ is also set out in Shell Company (Aust) Limited v Esso Standard Oil (Aust) Limited[6]:

   The marks are not now to be looked at side by side [as for substantial identity]. The issue is not abstract similarity, but deceptive similarity … the comparison … is between, on the one hand, the impression based on recollection of the plaintiff’s mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impression that such persons would get from the defendant’s television exhibitions.

   [6] (1961) 109 CLR 407 at 415

4. The Court added at 416, that:

   The deceptiveness that is contemplated must result from similarity; but the likelihood of deception must be judged not by the degree of similarity alone, but by the effect of that similarity in all the circumstances.’

5. In addition, the test is not one of mere possibility of confusion but of a real tangible danger that a number of persons will be caused to wonder whether the products come from the same source.

6. The decisive question is whether the trade marks are deceptively similar and then whether use of the holder’s trade mark for the goods in class 14 given the previous registration for the opponent’s IWC trade mark in class 14 would result in a tangible danger of confusion or deception due to the trade marks being deceptively similar. In this case, do not consider it would.

7. The opponent has argued that the trade marks are deceptively similar because both trade marks consist of three letter initialisms with identical second and third letters. Acoording to Ms Blecher, consumers with imperfect recollection of the opponent’s trade mark would at least entertain a reasonable doubt as to whether goods branded with the holder’s trade mark are somehow related to the trade source of the opponent’s IWC branded goods. I am not satisfied that there is a real likelihood of this occurring.

8. The nature of the goods in question and the usual manner in which they are sold is also particularly relevant to determining whether there is a tangible danger of deception or confusion arising. While deception or confusion may arise when trade marks are used either visually or aurally, aural deception is less likely to occur with goods which are generally inspected before purchase, such as watches in class 14. The likelihood of visual deception is also reduced as these particular goods are ‘likely to be subjected to a careful visual examination by any intending purchaser’.[7]

   [7] Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505, per Burchett J at 510

9. The striking feature of the holder’s trade mark is the symmetry of CWC. The impression formed of the respective trade marks is that of an initialism but clearly different initialisms. It is highly likely that the average monolingual Australian consumer would refer to the respective trade marks as either “I-W-C” and “C-W-C” and name each letter individually rather than attempt to pronounce a word from the three letters. I note that neither of the respective trade marks is a word capable of being pronounced so are most likely to be referred to and pronounced as initialisms. In this situation, the differing first letters of each trade mark are a very significant difference and it is unlikely that consumers would pronounce the trade marks in a similar fashion. The differences between the respective trade marks is simply too great.

10. I find the holder’s trade mark is not deceptively similar to the opponent’s trade mark and accordingly that the opponent has not established its opposition ground based on section 44 of the Act.

    Section 60

11. Section 60 of the Act 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.

12. To establish the ground of opposition under section 60, the opponent must demonstrate:

    ØThat, befpre the priority date of the opposed trade mark, another trade mark had acquired a reputation in Australia; and

    ØThat because of the reputation of the second trade mark, use of the applicant’s trade mark would be likely to deceive or cause confusion.

13. Unlike section 44 of the Act, section 60 does not require that the goods for which the opponent’s trade mark has a reputation be similar to the holder’s goods, nor is there a requirement that the respective trade marks be substantially identical or deceptively similar. These are, however, factors that may be taken into account in deciding whether the use of the opposed trade mark would be likely to deceive or cause confusion.

14. I need to determine whether the opponent has acquired a reputation in Australia before 25 July 2013 for its IWC trade mark which is such that use of the holder’s trade mark would be likely to deceive or cause confusion. This is more than the opponent demonstrating that it used its trade mark before 25 July 2013 but that the use was such that its trade mark is “associated in the minds of the Australian public”[8].

    [8] Seven Up Co v OT Ltd (1947) 75 CLR 203 at 211

15. In relation to reputation Kenny J states in McCormick & Co Inc. v McCormick[9]:

    In ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 343; 23 IPR 193 at 234, Lockhart J said:

    [R]eputation within the jurisdiction may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum.

    [9] 51 IPR 102, at 128

1. At 129 Kenny J continues:

   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 mark, as opposed to the product:…

2. As stated above under the title ‘Opponent’s evidence’ in paragraph 13, the de Vries declaration outlines the opponent’s advertising and promotion efforts for its IWC trade marks in Australia which is substantial. Globally, the opponent has generated substantial revenue in respect of its IWC branded products. While the sales of the opponent’s IWC watches in Australia remain fairly small, it is clear from the evidence that the opponent’s IWC timepieces are high-end luxury items which can cost between $1000 to tens of thousands of dollars. Given the cost of the IWC products it is not surprising that there are limited numbers of the goods sold in Australia. The opponent has invested heavily in the promotion of its IWC trade mark both globally and in Australia as demonstrated by the figures provided in confidential exhibit EDV-25. I am satisfied that the opponent had a considerable reputation in Australia for its IWC trade mark on watches before the priority date of the holder’s trade mark.

   Likelihood of confusion or deception in the marketplace

3. I now need to determine whether because of this reputation in Australia, use of the holder’s trade mark on the same goods would be likely to deceive or cause confusion.

4. Despite the considerable reputation in its IWC trade marks within the Australian marketplace, I am not satisfied that it is likely that the average consumer would become confused or be caused to wonder whether there was a connection between the opponent’s goods bearing the IWC trade mark and those goods of the holder bearing the CWC trade mark.

5. The Registrar’s delegate in Reece Pty Ltd v Rogers Seller & Myhill Pty Ltd[10] observed that:

   Confusion cannot arise solely from the reputation of one trade mark. There must always remain a level of similarity between the marks, whether we call it deceptive similarity or something less, and no matter how small it might be. The likelihood of confusion must depend on the reputation of the opponent's trade mark, but have regard (amongst other factors) to the level of similarity of the goods/services and the degree of similarity of the trade marks, greater or smaller.

   [10] (2010) 85 IPR 647

6. And in Pottle Productions Inc v Rute Ithalat Ve Ihracat Anonim Sirketi[11] the delegate observed that:

   The assessment of the likelihood of deception or confusion under section 60 is informed by the strength of the reputation of the Opponent’s trade mark(s), the inherent distinctiveness thereof, the degree of similarity between the trade marks under consideration and the nexus or connection between the goods and/or services of the parties. Each of these is a variable and it is possible that a trade mark’s reputation might be sufficiently strong and the degree of similarity to an opposed trade mark be so great (particularly where the trade marks are inherently distinctive) that confusion or deception will be a likelihood where very little, if any, nexus or connection exists between the goods and/or services under consideration.

   [11] [2012] ATMO 124 at [40]

7. Given the reasons already outlined in my discussion of section 44 regarding the lack of similarity between the holder’s and opponent’s trade marks, I do not believe that the holder’s use of its CWC trade mark would be likely to deceive or cause confusion in the marketplace even if that use is in relation to the same goods and directed at the same consumers. The respective trade marks are simply too different.

8. I am not satisfied that the holder’s use of its trade mark is likely to result in any significant degree of confusion or deception. The opponent has not established the section 60 ground of opposition.

   Decision

9. Subregulation 17A.34N provides:

   (1) Unless the opposition proceedings are discontinued or dismissed, the Registrar must decide:

   (a) to refuse protection in respect of all of the goods or services listed in the IRDA; or
   (b) to extend protection in respect of some or all of the goods or services listed in the IRDA (with or without conditions or limitations);

   having regard to the extent (if any) to which the grounds on which the IRDA was opposed have been established.

   (2) The Registrar must notify the International Bureau of the Registrar’s decision.

10. The opponent has not established any of the grounds of opposition pressed. Therefore, I decide to extend protection one month from the date of this decision in respect of all the goods listed in the IRDA.

11. If the Registrar has not been served with a notice of appeal before that time the IB will be notified of this decision as soon as practicable after the appeal period has ended, in accord with reg 17A.34N(2)

    Costs

12. 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 Regulations, against the unsuccessful opponent.

    Bianca Irgang

    Hearing Officer

    Trade Marks Hearings

    13 August 2015