Ross Lava v Kann Rasmussen Industri A/S

[1998] ATMO 52

trade marks act 1955

decision of a delegate of the registrar of TRADE MARKS, with reasons

Re:Opposition by V KANN RASMUSSEN INDUSTRI A/S to registration of trade mark application number 550226 in the name of ROSS LAVA

Background

Application number 550226 was lodged, on 11 February 1991, in the name of ROSS LAVA. The application was for registration of the trade mark:

It was advertised accepted in the Official Journal of Trade Marks on 6 April 1995, in respect of "All goods in this class" for class 24. Notice of opposition was lodged on 5 July 1995, by V KANN RASMUSSEN INDUSTRI A/S. The grounds set out in the notice of opposition, and pursued at the hearing, were based upon sections 40, 33 and 28 of the Trade Marks Act 1955.

As provided in the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act 1955 continue to govern this opposition. Accordingly, unless otherwise indicated, any reference to the Act in this decision is a reference to the Trade Marks Act 1955.

The evidence

Service and lodgement of the opponent's evidence in support was completed by 4 December 1996. This evidence comprised:

§  Statutory Declaration by Simon Carey, general manager of Velux (Australia) Pty Ltd, dated 29 October 1996, together with exhibits SC 1 to SC7

§  Statutory Declaration by Gail Maree Hill, patent and trade mark attorney, dated 3 December 1996, together with exhibits GMH1 to GMH 4 (first Hill declaration)

§  Statutory Declaration by Gail Maree Hill, also dated 3 December 1996, together with exhibits GMH1 to GMH 4 (second Hill declaration)

The trade mark applicant completed its evidence in answer by 3 October 1997. That evidence comprised:

§  Statutory Declaration by Ross Lava, dated 1 October 1997, together with exhibits RL-97-1 and RL-97-2

§  Statutory Declaration by Kristin Joanne Van Delft, employee of Phillips Ormonde & Fitzpatrick, dated 1 October 1997, together with exhibit KVD-1

§  Statutory Declaration by Michael Peter Squires, patent and trade mark attorney, dated 1 October 1997, together with exhibits DM-1 and DM-2.

The opponent chose not to serve or lodge any evidence in reply.

The circumstances surrounding this opposition, as described in the uncontested evidence from both parties, are as follows:

The opponent, V Kann Rasmussen Industri A/S, is a company incorporated in Denmark. For convenience and brevity, I will refer to the opponent hereafter as Rasmussen. Rasmussen has four relevant registrations for the trade mark VELUX, all of which predate the subject application. Their details are as follows:

Registration No.	Trade Mark	Class	Goods	Date of Registration
295005	VELUX	19	Non-metal frames and panes for roofs, lantern lights and windows especially windows for lighting from above and revolving windows; plate glass being glass for windows and buildings.	11 March 1976
398313	VELUX	24	Blinds of textile materials for roof windows and skylights	12 Oct 1983
398314	VELUX	20	Venetian blinds for fitting into glass roofs and skylight windows	12 Oct 1983
477550	VELUX	22	Awnings, including roller awnings of synthetic material or of textile material; parts and accessories for the said goods included in class 22	1 Dec 1987

Rasmussen has granted a world-wide exclusive licence to use its trade mark to its subsidiary, Velux A/S. That company has, in turn, entered into an exclusive Australian distribution agreement with the company Velux (Australia) Pty Ltd, which was founded in 1980. Rasmussen, via the relationships described above, first used the trade mark VELUX in Australia in relation to blinds for windows in 1977. Since then, it has continuously manufactured and sold ventilated skylights and blinds of various types, including roller blinds, awnings and pleated blinds throughout Australia. Velux (Australia) Pty Ltd has two sales offices in Australia, in Sydney and Melbourne, and approximately 648 distributors for VELUX goods. Although not wishing to provide sensitive sales figures, Velux Australia's general manager, Mr Simon Carey, estimates that sales of goods under the VELUX trade mark in the skylight and roof window industry represents a share of approximately 16% of the Australian market.

The trade mark applicant, Mr Ross Lava, is the director of Vertilux Pty Ltd. His company is involved in the importation, manufacture and distribution throughout Australia of window furnishings and accessories therefor, including vertical blinds, venetian blinds, roller blinds, pleated fabric blinds, vertical blind components, vertical blind fabrics, canvas blinds and timber venetian blinds and blind and window furnishing accessories. An issue disputed by Rasmussen is whether it was Mr Lava or his company who coined and first used the trade mark VERTILUX. I will return to this matter later. For my purposes here, however, I will simply say that the trade mark was first coined in 1987. It was, according to Mr Lava, invented from parts of the phrase LUXurious VERTIcal drapes, which were rearranged to form the word VERTILUX. Mr Lava attested that the trade mark has been used continuously throughout Australia on "at least" vertical blinds, venetian blinds and textile blinds since "at least" September 1987. His evidence documented sales and advertising figures, which demonstrate that use of the trade mark has been substantial and is increasing.

The hearing
On 20 April 1998, the trade mark applicant requested under the provisions of regulation 49 that the matter be set down for a hearing. The hearing took place before me, as a delegate of the Registrar, in Canberra. Mr Michael Squires from Phillips Ormonde & Fitzpatrick, Melbourne, represented the trade mark applicant. Ms Gail Hill from F B Rice & CO, Sydney, represented the opponent.

Discussion

As indicated above, the grounds of opposition raised in the notice of opposition, and pursued at the hearing, were based upon sections 40, 33 and 28 of the Trade Marks Act 1955. I will deal with the submissions and my conclusions on each ground, in that order.

Section 40 - proprietorship
The relevant provision of section 40 is that:

A person who claims to be the proprietor of a trade mark may make application to the Registrar for registration of that trade mark in Part A or Part B of the Register

Ms Hill began the opponent's submissions upon the issue of proprietorship. She said that it was Rasmussen's submission that Mr Lava was not, at the date of making his application, the proprietor of the trade mark. Accordingly, the Registrar must refuse registration on that ground. Ms Hill submitted that, at the date of application, the true proprietor of the VERTILUX trade mark in Australia in respect of the relevant goods was Vertilux Pty Ltd. In support of this argument, she drew my attention to the contents of a Statutory Declaration made by Mr Lava on 15 September 1993. This declaration was originally lodged in support of Mr Lava's successful opposition to registration of another trade mark application (no. 532221), by an unrelated party, for the trade mark VERTILUX, in respect of blinds and accessories in class 24. Both parties to the present dispute have put the declaration by Mr Lava into evidence. Ms Hill pointed to instances in the declaration where, for example, Mr Lava referred to his company (Vertilux Pty Ltd) first coining the trade mark VERTILUX around 1987, and his company having used the trade mark continuously since that time.

Ms Hill submitted that, because the applicant had clearly declared that it was not he, but rather a corporate entity that was the proprietor of the trade mark, the present application was fatally flawed. It should therefore be refused under the provisions of section 40. She commented that that the attempt to rectify proprietorship by way of the deed of assignment of the trade mark (including goodwill) from Mr Lava to Vertilux Pty Ltd (lodged with the Office on 8 March 1995) was not a "fix" for the situation, and should fail because the applicant had no good title to assign.

In conclusion on this point, Ms Hill observed that the deed of assignment, and also Mr Lava's statement of use lodged in support of the present application (both these documents having been exhibited in the opponent's evidence in support) were "entirely at odds" with Mr Lava's statements in his aforementioned Statutory Declaration. She submitted that greater weight must be given to the sworn evidence, in which Mr Lava declared that the proprietor of the trade mark was always Vertilux Pty Ltd.

Mr Squires countered Ms Hill's submissions by arguing that Mr Lava's situation was essentially comparable with that of the opponent, whose worldwide licensing arrangements for use I have described above. Mr Squires said that it was clear from applying the principles set out in Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402 (the MOO/MOOVE case) that Mr Lava was the proprietor at common law of the trade mark VERTILUX, having been its first user in this country. He noted that the opponent did not claim proprietorship itself, but merely wished to displace Mr Lava's claim.

Mr Squires said that it was abundantly clear from the Lava declaration tendered in evidence in answer that when the VERTILUX trade mark application was filed, in February 1991, Mr Lava had sole and complete control over his company, and therefore over use of the trade mark. The company was his "alter ego" and the distinction between the man and the company was "very blurred". At that time, Mr Lava and his wife were the only directors and shareholders of the company. Further, Joanne Lava's participation was in a support role only, that is assisting with paperwork and administrative duties, rather than in making any of the day to day business decisions associated with running the company. The veracity of this description of the situation was supported, said Mr Squires, by the declaration by Kristin Van Delft. Annexed to that declaration, as Exhibit KVD-1, is an extract from the Australian Securities Commission Ascot Database. The extract shows that, at the relevant date, the only Directors of Vertilux Pty Ltd were Ross and Joanne Lava.

Mr Squires also pointed to the declarations by Robert John Watson and Domenic Musumeci, exhibited as DM1 and DM2 of his own declaration. These declarants were both experienced managing directors of window furnishing companies who had dealt with Mr Lava's company. The declarants, according to Mr Squires, had made no distinction (in their declarations) between the man and his company.

Mr Squires submitted that the very close connection between Mr Lava and his company has resulted in there being no deception or confusion in the public mind over who actually owned the trade mark. Both to Mr Lava and to others, he and his company were one and the same. He had complete control over all aspects of the company's activity. Furthermore, although in the declaration cited by Ms Hill, Mr Lava had declared that his company had coined the trade mark VERTILUX, realistically, this was impossible. A company could not coin a trade mark, just as, under patent law, it is recognised that a company cannot invent something. Only a natural person can do either of those things. In this case, that natural person was indisputably Mr Lava.

In these circumstances, said Mr Squires, Mr Lava was perfectly entitled to decide the trade mark was his asset, rather than the asset of his company. Furthermore, there was nothing to suggest that, at the time of filing, Mr Lava had no intention of using the trade mark himself in the future in relation to the relevant goods.

Mr Squires then drew my attention to the transitional provisions in section 241 of the Trade Marks Act 1995, which read:

241. (1) This section applies if an application for the registration of a trade mark in Part A or B of the old register was pending immediately before 1 January 1996.

(2) If the application had been accepted under the repealed Act and the acceptance was in force immediately before 1 January 1996, the following provisions apply:

(a) subject to subsection (4), the repealed Act (other than paragraph 45 (1)(b)) continues to apply in relation to the application;

(b) if, after dealing with the application in accordance with the repealed Act, the Registrar is required under section 53 of that Act to register the trade mark in the old register--the Registrar is to register the trade mark under Part 7 of this Act.

Note: Subsection 45(1) of the repealed Act provided as follows:
"45. (1) An application for the registration of a trade mark may be accepted, and the trade mark may be registered, notwithstanding that the applicant does not use or propose to use the trade mark:
(a) ...
(b) if an application has been made for the registration of a person as a registered user of the trade mark and the Registrar is satisfied that the proprietor intends the trade mark to be used by that person in relation to those goods or services and is also satisfied that that person will be registered as a registered user of the trade mark immediately after registration of the trade mark.".

Mr Squires said that these provisions potentially disadvantaged the subject application, as they prevented Mr Lava from retrospectively relying on the registered user provisions of section 45(1)(b) the Trade Marks Act 1955. This was despite the relatively more permissive provisions for authorised users written elsewhere into the Trade Marks Act 1995. Mr Squires submitted that the fact that the transitional provision of the new Act allowed no turning back to the provisions of section 45(1)(b) flew in the face of the 1955 Act. That Act allowed someone who had made application on the basis that they intended to use their trade mark, to later change their mind and instead register a user. He submitted that to penalise Mr Lava on this score would therefore be inequitable. Finally, on this point, Mr Squires drew my attention to the case of Murray v Major League Baseball Properties Inc 33 IPR 362, (the MARLIN case) which, he said, contained close parallels to the present case on the question of use.

From my reading of section 241, it appears that Mr Lava's application is prevented from proceeding under the provisions of paragraph 45(1)(b) of the 1955 Act. This would be the situation, even if Mr Lava was to declare at this stage that he wished to submit a new statement of use, as he was mistaken when he filed his application, and had not, in fact, intended to use the trade mark VERTILUX himself, but had intended his company to use it. However, in line with the decision relating to controlled use of a trade mark reached by the Deputy Registrar in the MARLIN case, supra, I do not propose to penalise the trade mark applicant for what appears to be simply an oddity in the operation of the transitional provisions of the new Act. It is clear to me that Mr Lava has established the requisite ownership of the trade mark at common law, as described by McGarvie J at page 413 in the MOO/MOOVE case, supra:

The basic common law principle is that the first person who uses a trade mark of an appropriate type within a country becomes the proprietor of the mark there: Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corp Ltd (1951) 82 CLR 199 at 203; Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592 at 603; Moorgate Tobacco Co Ltd v Philip Morris Ltd(No 2) 59 ALJR 77 at 83.

...

In considering who, within s.40(1) of the Act, was at the time of Settef's application for registration the proprietor of the trade mark, one considers who at common law was the proprietor in Australia: The Shell Co of Australia Ltd v Rohm & Haas (1949) 78 CLR 601 at 625 and 627.

For all the reasons Mr Squires has described above, it is apparent that no deception or confusion was intended or is likely to have resulted from the manner in which Mr Lava's trade mark application was originally filed and used. Following the resignation of his wife as director, and the appointment of another party as director and equal shareholder in his company, Mr Lava has now filed a deed of assignment of the trade mark (with goodwill) to Vertilux Pty Ltd. This will be entered on the Register at the time of registration, in accordance with the provisions of the 1955 Act. I consider that the question of proprietorship of the trade mark VERTILUX is settled at this point.

The opposition has therefore failed on the ground of proprietorship.

Section 33 - deceptive similarity
Sub-section 33(1) reads:

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.

The second ground of opposition argued by Ms Hill was based upon whether the trade marks VELUX and VERTILUX (and device) were deceptively similar in terms of section 33 of the Act. Ms Hill said that there was no question that the "blinds of textile materials for roof windows and skylights" covered by her client's registration no. 398313 in class 24 were goods of the same description as those covered by the present application, being "all goods" in class 24. Furthermore, many of the goods covered by her client's other registrations were goods of the same description as the applicant's goods. She conceded that the trade marks themselves are not substantially identical, but she argued that I must find them to be deceptively similar. In support of this argument, Ms Hill cited (inter alia) Windeyer, J in Shell Co. of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 415, and particularly the tests set out in Parker J 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.

If, considering all those circumstances, you come to the conclusion that there will be confusion - that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be confusion in the mind of the public which will lead to confusion in the goods - then you must refuse the registration, or rather you must refuse registration in that case.

Ms Hill compared the word VELUX with the word VERTILUX and device. She said that the fact that both trade marks started with the letters VE and ended with the suffix LUX, meant that the additional "soft" syllable TI was not sufficient to distinguish the applicant's mark. She suggested that, as the opponent's trade mark had been registered in plain type script, it was reasonable to assume that the opponent might wish to use its mark in a presentation or style having some visual similarity to the applicant's representation of its mark. Ms Hill further submitted that both marks VELUX and VERTILUX have the same principal elements in the same configuration, leading to "considerable visual similarity and a certain commonality of imagery and impression". This was not easily overcome by either or both marks having a distinctly recognisable meaning (the "meaningfulness" of a word being a valuable aid to recognition), as neither word was a known English word with a readily discernible meaning.

In support of her arguments, Ms Hill cited Gardenia (Overseas) Pte Ltd v The Garden Company Ltd 29 IPR 485 (the GARDEN/GARDENIA case), in as much as it distinguished Expanded Metal Co Ltd v Finn Blinds (1986) AIPC 90-305 (the PERMA/PERMALUX case). In the GARDEN/GARDENIA case, said Ms Hill, the trade marks GARDEN and GARDENIA were found not to be deceptively similar, because both words had a meaning in ordinary English language, which made it easier for the marks to be distinguished. This decision was distinguished from the decision in the PERMA/PERMALUX case, where the trade marks PERMA and PERMALUX were held to be deceptively similar.

Ms Hill argued that the fact that the opponent's trade mark had two syllables, whereas the applicant's mark had three could not, of itself, be sufficient for a finding that the marks were not deceptively similar. She referred to the case of Sporoptic Pouillox SA v Arnet Optical Illusions, Inc (1995) 32 IPR 430. In that case, the trade marks VUARNET and ARNET were found to be deceptively similar, because, although one mark contained an additional two letters - VU - those letters produced a soft sound which was insufficient to adequately differentiate the two marks, neither of which had any clearly discernible meaning. Ms Hill submitted that the present case was directly parallel with the VUARNET/ARNET situation, as the additional letters TI in the applicant's trade mark also produced a soft sound which was insufficient to differentiate two trade marks, neither with discernible meanings.

Ms Hill anticipated that the applicant might make out a case that the prefix element of its mark, VERTI, could be distinguished from the opponent's mark on the basis that VERTI had some suggestion or meaning, having been derived, as Mr Lava attested, from the descriptive word VERTICAL. She said that to find this to be so would be to allow the applicant to "have it both ways", as the applicant had not limited its goods to vertical goods such as vertical drapes and, "logically", if that was what the prefix meant, use of the mark on other goods would be misdescriptive and thereby deceptive and confusing.

Ms Hill then went on to consider the nature of the goods, the kind of customer and the surrounding circumstances. She said that that both the applicant's and the opponent's goods were or could be ordinary household soft furnishing or decorator items and there was no evidence that the purchasers of these goods would be especially careful or brand-conscious consumers. Accordingly, the potential for trade mark or brand substitution could not be discounted. She said that there were large self-service stores stocking a range of soft furnishings and window dressings including venetian blinds and fabric blinds, self-selected by the customer. Such goods, while not in the "bag of sweets" category, would nevertheless often be purchased without much forethought or careful consideration. Imperfect recollection by a purchaser wanting to purchase either of the respective sets of goods may lead them to describe either of the marks as "starting with V and ending with LUX", resulting in deception and confusion which only the most careful or well informed purchaser familiar with both trade marks, or supplier who dealt in goods under both trade marks, rather than one or the other, would escape.

Ms Hill concluded her arguments on the matter of section 33 by observing that if, as the applicant had suggested in his evidence, there had been no confusion between the trade marks up until the present, this was because the applicant's use of the trade mark VERTILUX had only been in relation to very limited goods. Ms Hill said that, if I should find that the applicant's and the opponent's trade marks were able to co-exist on the Register, in terms of section 34, then the applicant's statement of goods should be limited from all goods in class 24 to "vertical fabric drapes."

Notwithstanding Ms Hill's submissions, such a restriction of goods, or indeed co-existence of the marks on the Register under section 34, will not be necessary. This is because I do not believe that the trade marks are, in fact, deceptively similar.

Ms Hill has accepted that the trade marks VELUX and VERTILUX are not substantially identical, and neither of the parties have disputed that the goods upon which each trade mark may potentially be used are the same, or of the same description. I will therefore take as common ground that the trade marks are not substantially identical, but that the goods in question are of the same description. It follows that the issue of deceptive similarity is all that remains for my consideration under section 33. Subsection 6(3) of the Act says "a trade mark shall be deemed to be deceptively similar to another trade mark if it so nearly resembles that other trade mark as to be likely to deceive or cause confusion." Given that I have already indicated my disagreement with the opponent's arguments under section 33, I will not delay matters further with a lengthy summary of Mr Squires' submissions in rebuttal. Rather, I will come straight to the point and explain why I have decided that the trade marks VELUX and VERTILUX are not deceptively similar.

The test for deceptive similarity described by Dixon and McTiernan JJ in Australian Woollen Mills Ltd v F.S.Walton & Co Ltd (1937) 58 CLR 641, at 658 gives valuable guidance:

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.

In both sets of examples of deceptively similar trade marks Ms Hill provided in her submissions, PERMA and PERMALUX, ARNET and VUARNET, one of the trade marks is wholly contained within the other. In such situations, it is arguable that goods marketed under one trade mark could be assumed to be a subset of goods marketed under the other. This is more likely where neither of the trade marks in question has an obvious meaning which allows it to be differentiated from the other. GARDEN and GARDENIA, although also falling under the description of one mark within another, were found not to be deceptively similar due the disparate meanings of the words. In the VUARNET/ARNET case, supra, Deputy Registrar Hardie said, at page 436:

If visually similar marks engender different meanings which in turn provoke independent ideas, it may be that they can exist side by side without confusion. That, however, is not the present case. VUARNET has only minor surname significance and ARNET has no meaning at all. There is therefore no generation of independent ideas to check the likelihood of confusion.

The situation with VELUX and VERTILUX is different from this on several scores. Firstly, VELUX is not wholly incorporated within VERTILUX. So, although there are undoubtedly some visual similarities between the word components of the two trade marks, one does not have the appearance of being a subset of the other. This circumstance is reinforced by the fact that the applicant's trade mark is a composite trade mark with a dominant device component.

Secondly, whereas similar pronunciation was an important factor in Ms Hardie's decision on ARNET/VUARNET, in the case of VELUX and VERTILUX, the respective common pronunciations of the syllables VEL and VER are quite dissimilar. Furthermore, I do not accept Ms Hill's proposition that the TI component of the mark VERTILUX forms a "soft", indistinguishable syllable. On the contrary, I believe that the majority of people in this country would recognise and pronounce the consonant "t" as a "hard", clearly defined sound. Part of the reason for my conviction lies in the identification that most people would make between the whole prefix VERTI and the word VERTICAL. This leads me to the third reason why this case differs from the ARNET/VUARNET situation.

The third difference lies in the connection of the prefix VERTI in the trade mark VERTILUX with the word VERTICAL. This connection has, of course, been verified by Mr Lava's explanation of how his trade mark was coined. The presence of the prefix in the mark, together with the device, which, in the context of the goods, is certainly suggestive of a venetian blind, gives the trade mark as a whole an association with vertical window coverings. This association, which is completely absent from Rasmussen's mark VELUX, represents (to paraphrase Ms Hardie from ARNET/VUARNET, supra) the "generation of an independent idea which checks the likelihood of confusion."

Indeed, an absence of confusion between the trade marks in the marketplace is something that both parties have confirmed. This does not surprise me, given what I have said above, but it does lend weight to my opinion that the trade marks can be easily differentiated. Dixon and McTiernan JJ, supra, said: "evidence of actual cases of deception, if forthcoming, is of great weight." In the present situation, even taking into account the disputed relative sizes of the parties' respective markets, the converse argument can be applied. Given the overlap in the core business of Mr Lava and Rasmussen, I would have expected some evidence of confusion to have manifested itself and been documented, if it was at all likely to occur.

In light of all I have said above, I find that the trade marks VELUX and VERTILUX are not deceptively similar in terms of section 33 of the Act. The opposition has therefore failed on this ground.

Section 28 - likely to deceive or cause confusion

The provisions of this section of the Act read as follows:

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.

Ms Hill's first argument in relation to subsection 28(a) picked up her earlier point about the descriptive nature of the prefix VERTI in the applicant's trade mark. She submitted that, if it is accepted that the prefix is derivative from VERTICAL, as in VERTICAL DRAPES, then the statement of goods should be restricted to those goods. This would prevent use of the mark from being misdescriptive, and thereby likely to deceive or cause confusion as prohibited under subsection 28(a).

This argument is based upon the underlying principle described by Lord Macnaughten in Dunn's Trade Mark (1890) 7 RPC 311 at 318:

Unfortunately in the competition for business a trader not infrequently endeavours to attract custom by representing that the goods which he offers for sale are different in origin, composition or character from what they really are. The public are constantly tempted to buy one thing when they think they are buying another. It is not, as has been observed, the province of the court to protect speculations of this kind. Between rival traders the application of the principle is necessarily a matter of extreme difficulty. But as between the innocent public and a trader seeking registration of a proposed trade mark, there is, I think, no room for hesitation or doubt.

This principle is undoubtedly one which should be applied to protect the public from use by traders of what his Lordship later referred to as "words which involve a misleading allusion or a suggestion of that which is not strictly true, as well as words which contain a gross and palpable falsehood." (Supra, page 319.) However, I would more than hesitate to place the trade mark VERTILUX into this category. Both parties have agreed on the association between the prefix VERTI and the word VERTICAL, and I have said above that I believe the association contributes to the ability of VERTILUX to be distinguished from VELUX. Notwithstanding these observations, VERTI is not (according to the latest editions of the Oxford and Macquarie dictionaries) a recognised dictionary prefix meaning VERTICAL, let alone VERTICAL DRAPES, as Ms Hill has implied. Further, it has to be asked, even if members of the public did expect that they might be purchasing some kind of "vertical" product under the trade mark, could they conceivably be deceived or confused or influenced in any way with so little information at that point? I think not. This is not a situation such as in the VITAMIN or ORLWOOLA cases (J. Kitchen & Sons Pty LTD v Inman (1939) 9 AOJP 1383 (Reg.), Re Trade Mark "Orlwoola" (1909) 26 RPC 850 (C.A.)) where the public might make a reasonable, but incorrect, assumption about a product based upon the trade mark, which could not easily be confirmed or discounted by even close inspection of the product.

Ms Hill's second argument under subsection 28(a) canvassed the significant reputation she said had been established by the opponent in its mark VELUX. However, despite the merits of Ms Hill's submissions about the extent of that reputation, I have already concluded that VELUX and VERTILUX are simply not deceptively similar, as required for her argument under subsection 28(a) to succeed.

For completeness, I mention that Ms Hill also made submissions in relation to the issue of whether blameworthy conduct by the applicant could be determined. This was in accordance with the Office interpretation, (recently supported in the Federal court decision, Canon Kabushiki Kaisha v Robert James Brook and Rachel Brook trading as The Cannon Watch Company 36 IPR 88), that all paragraphs of section 28 should be read conjunctively. I did not find her arguments upon this point convincing. However, as I have found that both the opponent's arguments under subsection 28(a) have failed, I am not in any case required to enquire further into the matter.

It follows, from the above, that the opposition has failed in terms of section 28 of the Act.

Decision and costs
I have found that the opposition has failed on all the grounds relied on at the hearing. I therefore dismiss the opposition and, subject to any appeal from my decision, direct that the trade mark application may now proceed to registration.

Both sides have claimed costs in this opposition. I award costs, according to the official scale, to the successful trade mark applicant, Ross Lava.

Claudia Murray
Acting Hearing Officer
5 November 1998