Royal Doulton (UK) Pty Ltd v Confectionery Importers of Australia Pty Ltd

[2008] ATMO 28

TRADE MARKS ACT 1995

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

Re:Opposition by Royal Doulton (UK) Ltd to registration of trade mark application 1046886(30) DOULTON - in the name Confectionery Importers of Australia Pty Ltd.

Delegate:	Iain Thompson
Representation:	Opponent: Michael O’Donnell of Phillips Ormonde & Fitzpatrick Applicant: Jennifer McEwan of EKM Patent
Decision:	2008 ATMO 28 Section 52 opposition: ss60 and 42 opponent’s trade mark has reputation in Australia – opponent’s deceptively similar trade mark has in fact been used on the same goods as those of the applicant; opposition established. Costs Ordered against applicant

Background

1. This application proceeds in the name of Confectionery Importers of Australia Pty Ltd,  (‘the applicant’) of Moorabbin, Victoria, and seeks registration in Australia of the following trade mark, current details of which are:

   Appn No1046886

   Priority Date              18 March 2005

   GoodsClass: 30 Filled chocolates, soft centred chocolates, praline centred chocolates, liqueur filled chocolates, liquor filled chocolates and cream filled

   Trade MarkDOULTON

2. The application was accepted for possible registration and advertised as such in the Australian Official Journal of Trade Marks on 14 July 2005.

3. Royal Doulton (UK) Ltd, (‘the opponent’), of Stoke-on-Trent, England, filed notice of opposition to the registration of the above trade mark, (‘the opposed trade mark’), and at the hearing relied on grounds contained or referred to in Division 2 of Part 5 of the Trade Marks Act 1995, (‘the Act’), being those under:

   ·     subparagraph 42(b) – That use of the opposed trade mark would be contrary to law;

   ·     section 60 – that because of the reputation of the opponent’s trade marks, the use of the opposed trade mark would deceive or confuse.

4. As a delegate of the Registrar of Trade Marks I heard the arguments of the parties at a hearing in Melbourne on 5 March 2008.  The opponent was represented by Michael O’Donnell of Phillips Ormonde & Fitzpatrick.  The applicant was represented by Jennifer McEwan of EKM Patent.

   Evidence

   5.   The parties have served and filed evidence in support, answer and reply as indicated in the table below:

Declarant	Position	Date made	Exhibits
Evidence in Support
#1	Deborah Jane Bates	Head of Legal Services of Opponent	28 March 2006	1-5
Evidence in Answer
#2	David Samuel Frydman	Director of the Applicant	11 December 2006	DSF 1 and 2
#3	Kate Robina Jungwirth	Solicitor at EKM	11 December 2006
Evidence in Reply
#4	Deborah Jane Bates	Head of Legal Services of Opponent	24 May 2007	6 to 10

1. The evidence of Ms Bates shows that the opponent is successor in business to Doulton & Co (Ltd), a well-known ceramics maker who was granted a royal warrant in 1902 and since then has used a variety of trade marks, as described below, which include the words DOULTON and ROYAL DOULTON.

2. The goods on which the above trade marks have been used include ceramics and home furnishings, cutlery, jewellery, figurines, glassware, and confectionery.

3. A retailer called Mother Meg’s has licensed the opponent’s ROYAL ALBERT trade mark and has used it since 2002 on biscuits, cakes and puddings.

4. More significantly, the opponent has also licensed its trade marks to Confectionery Link Pty Ltd for use in Australia since early 2003 – this company imports and manufactures confectionery under the BUNNYKINS trade mark licensed to it by the opponent.  The BUNNYKINS chocolates appear to be predominantly oriented to the Easter chocolate market and carry the words “by ROYAL DOULTON” prominently and adjacent to the trade mark BUNNYKINS where indicated, shown in reduced size, below.

5. Sales of the above or similar goods totaled in excess of half a million dollars by March 2006.  The sales of puddings, biscuits and cakes and the above goods have totaled in excess of three quarters of a million dollars in Australia – I note that the puddings, biscuits and cakes have been sold under the ROYAL ALBERT trade mark.

6. Mr Frydman in his evidence in answer says that in 1996 he went into the business of importing and wholesaling confectionery and was involved in selling confectionery manufactured under license bearing trade marks such as ‘The Simpsons’, ‘Thomas the Tank Engine’, ‘Walt Disney’, and ‘Barbie’ making the business one of the largest licensed confectionery distributers in the country – it is not clear from the declaration that the business Mr Fryman talks of involves the applicant.

7. Mr Frydman says that the DOULTON trade mark was first used by ‘our’ company ‘last year’ – as the declaration was made in late 2006, he either means that the applicant first used the DOULTON trade mark in 2005, or if he means ‘in the last year’ then sometime between late 2005 and the writing of the declaration.

8. Mr Frydman says that the trade mark DOULTON was selected by reference to telephone directories and on-line surname websites.  These websites are not specified by Mr Frydman, neither are the telephone directories.  However, I note that the applicant is a Moorabbin company and the surname ‘Doulton’ does not presently occur in the Melbourne White Pages telephone directory and occurs twice in all Victorian directories.  There are two more White Pages listings of the surname DOULTON in New South Wales, one in Western Australia and three in South Australia.

9. Mr Frydman says that the applicant has two lines of products which bear the trade mark DOULTON – liqueur chocolates and pralines.

10. Ms Jungwirth is a solicitor and attests that she worked as a part-time shop assistant in a department store and that if people requested BUNNYKINS products, she referred them to the Royal Doulton consultant.

11. Ms Bate’s second declaration establishes that the word ‘Doulton’ is a rare surname and occurs 18 times on the Australian Electoral Roll. 

    Section 42

    17.  Section 42 of the Act provides:

    42  Trade mark scandalous or its use contrary to law

    An application for the registration of a trade mark must be rejected if:

    (a)the trade mark contains or consists of scandalous matter; or

    (b)its use would be contrary to law.

12. Here the opponent relies on subparagraph 42(b), above, and sections 52 and 53 of the Trade Practices Act 1974 which provide:

    52  Misleading or deceptive conduct

    (1)A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

    (2)Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of subsection (1).

    Note:For rules relating to representations as to the country of origin of goods, see Division 1AA (sections 65AA to 65AN).

    53  False or misleading representations

    A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:

    (a)       falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;

    (aa)falsely represent that services are of a particular standard, quality, value or grade;

    (b)falsely represent that goods are new;

    (bb)falsely represent that a particular person has agreed to acquire goods or services;

    (c)       represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;

    (d)represent that the corporation has a sponsorship, approval or affiliation it does not have;

    (e)make a false or misleading representation with respect to the price of goods or services;

    (ea)     make a false or misleading representation concerning the availability of facilities for the repair of goods or of spare parts for goods;

    (eb)make a false or misleading representation concerning the place of origin of goods;

    (f)make a false or misleading representation concerning the need for any goods or services; or

    (g)       make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

    Note:For rules relating to representations as to the country of origin of goods, see Division 1AA (sections 65AA to 65AN).

13. Subject to an initial evidentiary onus on the opponent in terms of section 55, subparagraph 42(b) places an obligation on the Registrar of Trade Marks to consider whether the use of a trade mark would be contrary to law when this ground is pursed at an opposition to registration: Advantage-Rent-A- Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683 per Madgwick J at paragraphs 26 and 28:

    However, in my opinion the fact that the existence of any contrariety to law is to be exercised in some circumstances by an administrative body and, in other circumstances, by a judicial body does not mean that the phrase "if its use would be contrary to law" should have an ambulatory meaning, depending upon what kind of tribunal is to apply it. Nor can any reticence on the part of an administrative decision-maker to express an opinion on a matter of law be encouraged. The idea that "contrary to law" in the context of judicial proceedings means contrary to all laws, whilst in the context of proceedings before the Registrar it means contrary to laws which are easy for the Registrar to determine or which are "clear cut", is not sustainable. As a matter of practice, delegates of the Registrar have in some cases determined that a trade mark submitted for registration is contrary to law as a result of its being in breach of other legislation: see Re Application by Slaney (1985) 6 IPR 307 at 309 where a trade mark was found to be in breach of the Health Legislation Amendment Act 1983 (Cth) and Re Application by Athol Thomas Kelly (1987) 8 IPR 667 at 672 where it was found that the trade mark would infringe the Advance Australia Logo Act 1984 (Cth). I see no reason why some legislation should be able to be relied on before the Registrar to establish contrariety to law and other legislation such as the Copyright Act, albeit more complex, should not. Further, it is well-settled that a power granted to the Registrar and to a court can be at once administrative and judicial depending on who was exercising the power. The High Court so held in R v Quinn; Ex parte Consolidated Foods Corporation [1977] HCA 62; (1977) 138 CLR 1, of a power to remove a trade mark from the Register.

    [….]

    I acknowledge the claim made by counsel for the Registrar that such an approach requires the Registrar to look at questions of law outside his or her expertise and that this can be difficult and may place a large and onerous responsibility upon the Registrar. However, the Registrar has the comfort that the criterion is that the use "would" not "could" be contrary to law. Further, there is no reason why the Registrar could not seek legal advice before forming his/her opinion. It should also be noted that what is required is that the Registrar form a view as to whether the use of a trade mark would be contrary to law. Such opinion does not have a similar effect to say, a judicial conclusion of law as to breach of copyright in copyright proceedings; the effect is limited to the refusal of registration. In any case, an appeal de novo lies from the Registrar's decision to this Court where any error of the Registrar may be corrected.

14. In Equity Access Pty Ltd v Westpac Banking Corporation (1990) ATPR 40-994, the Court said:

    While there remain many areas of difficulty in the application of s.52 of the Act to the facts of a decided case there have been established a number of propositions, relevant to the determination of the present case, which are no longer in dispute:

    1. For conduct to be misleading or deceptive the conduct must convey in all the circumstances of the case a misrepresentation: Taco Bell at 202. In the present case the misrepresentation on the part of the respondents is said to be that the financial product advertised and marketed by each of them is the product of the applicant or that there is some business relationship between the applicant and each of the respondents or that the applicant has endorsed the respective product of the respondents.

    2. There will however be no contravention of s.52(1) of the Act unless error or misconception results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible: Puxu per Gibbs CJ at p 6 and per Mason J at p 15, Global Sportsman Pty Ltd v. Mirror Newspapers Ltd (1984) 55 ALR 25, at p 34.

    3. Conduct will be likely to mislead or deceive if there is a "real or not remote chance or possibility" of misleading or deception regardless of whether it is less or more than 50%: Global Sportsman at p 34. The question of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective question which the Court must determine for itself. Hence evidence that persons in the relevant class have been misled will, although admissible, not be determinative. In some cases however such evidence will be very persuasive: Puxu per Gibbs CJ at pp 198-9.

    4. Conduct of a corporation causing mere confusion or uncertainty in the minds of the public in the sense that they may be caused to wonder whether two products may have come from the same source is not necessarily coextensive with misleading or deceptive conduct: Puxu at p 100; Bridge Stock Brokers v. Bridges (1984) 57 ALR 401 at p 413 per Lockhart J. Since actual deception need not be shown the Court must consider whether a reasonably significant number of potential purchasers would be likely to be misled or deceived: Weitmann v. Katies Ltd (1977) 29 FLR 336, 343. The test in passing off cases is usually expressed as being whether a "substantial number of persons likely to become purchasers ... are liable to be deceived by the defendant's use of the name. On the other hand it is not necessary to show that all, or substantially all, persons in the market associate the name with the plaintiff's goods, if this can be shown of a substantial proportion of persons who are probably purchasers of the goods of the kind in question." (per Wilberforce J, as he then was, in Norman Kark Publications Ltd v. Odhams Press Ltd (1962) RPC 163 at 168 and see Saville Perfumery v. June Perfect Ltd (1941) 58 RPC 147 at 175-6, 10th Cantanae Pty Ltd v. Shoshana Pty Ltd (1987) 79 ALR 299 at 315 per Gummow J).

    5. In a case such as the present the applicant must establish that it has acquired the relevant reputation in the name, that is to say that the name had become distinctive of the applicant's business in a particular country or geographical area: Sheraton Corporation of America v. Sheraton Motels Ltd (1964) RPC 202; BM Auto Sales Pty Ltd v. Budget Rent A Car System Pty Ltd (1976) 12 ALR 363. However at least in some circumstances very slight activities may be found to be sufficient to establish that a name has become distinctive of a person's business in a particular country: Miki Shoko Co Ltd v. Merv Brown Pty Ltd (1988) ATPR 40-858.

    6. Section 52 is not confined to conduct which is intended to mislead or deceive: Puxu per Gibbs CJ at p 197 and a corporation which acts honestly and reasonably may none the less engage in conduct that is likely to mislead or deceive: Yorke v. Lucas (1985) 61 ALR 307 at p 309.

    In Taco Bell (supra) at pp 202-3 Deane and Fitzgerald JJ set out four guidelines for the application of s.52 to cases such as the present where the misrepresentation is not express. Their Honours said:

    "First, it is necessary to identify the relevant section (or sections) of the public (which may be the public at large) by reference to whom the question of whether conduct is or is likely to be, misleading or deceptive falls to be tested ...

    Second, once the relevant section of the public is established, the matter is to be considered by reference to all who come within it, 'including the astute and the gullible, the intelligent and the not so intelligent, the well educated as well as the poorly educated, men and women of various ages pursuing a variety of vocations. ...

    Thirdly, evidence that some person has in fact formed an erroneous conclusion is admissible and may be persuasive but is not essential. Such evidence does not itself conclusively establish that conduct is misleading or deceptive or likely to mislead or deceive. The Court must determine that question for itself. The test is objective.

    Finally, it is necessary to enquire why proven misconception has arisen: Hornsby Building Information Centre v. Sydney Building Information Centre (18 ALR at 647; 147 CLR at 228). The fundamental importance of this principle is that it is only by this investigation that the evidence of those who are shown to have been led into error can be evaluated and it can be determined whether they are confused because of misleading or deceptive conduct on the part of the respondent."

15. The applicant has argued that its goods are consumed by an adult market and the opponent’s chocolates are purchased by children.  There is no evidence from either party as to the purchasers of the goods in question.  However, I think that common sense suggests that the opponent’s goods, being Easter gifts and the like, will predominantly be purchased by adults to give to children and the applicant’s goods will be purchased by adults for consumption by themselves.  Accordingly there is not, to my mind, much distinction to be made concerning the present marketplaces for these goods and I am anyway to look at the uses to which the applicant can put its trade mark within the scope of the registration it seeks which is, “Filled chocolates, soft centred chocolates, praline centred chocolates …”

16. I consider that the evidence shows that the opponent has a considerable reputation in its name ROYAL DOULTON and in its trade mark ROYAL DOULTON – this reputation pertains primarily to the goods which are the opponent’s ‘core business’ – ceramics, porcelain and home furnishings, and also in relation to cutlery, jewellery, figurines, and glassware.  The applicant’s evidence also establishes to my satisfaction that the connection between the BUNNYKINS trade mark and ROYAL DOULTON is well known and shop assistants refer enquirers about the BUNNYKINS trade mark to the ROYAL DOULTON sales area.

17. Moreover, the opponent has also used its trade mark ROYAL ALBERT prominently on goods which include biscuits, cakes and puddings since 2002. 

18. It has also used its name and/or trade mark ROYAL DOULTON on chocolate confectionery products since the first quarter of 2003 – at least a year before the applicant states that it first used its trade mark.  The applicant made submissions that the uses of the words “by ROYAL DOULTON” on the packaging, above, by the opponent are not trade mark uses.  While that could be so, there is no necessity for the opponent to rely on a trade mark in an opposition under this particular ground. 

19. The total revenues under the opponent’s trade mark or name are over three quarters of a million dollars in relation to confectionery and related products and, as I understand it, the opponent’s position is that:

    ·     The reputation that its trade mark has in relation to its core business is such that it should build rapidly through franchised use such as on chocolates or other confectionery;

    ·     There is a public acceptance of the practice of franchising well known brands and the ROYAL DOULTON brand and name is well-known;

    ·     The opponent has in fact franchised the trade mark BUNNYKINS to use on chocolates and confectionery and the ‘house mark,’ or opponent’s name, ROYAL DOULTON, is used in close association with the BUNNYKINS trade mark on the packaging of those goods.

20. The applicant’s submissions that there is not likely to be any expectation amongst the public that the opponent might franchise its trade marks for use on chocolates, confectionery and related products are considerably weakened by the fact that the opponent has so franchised its trade marks – and amongst these, as well as the ROYAL DOULTON trade mark to which these observations primarily pertain, are included the ROYAL ALBERT and BUNNYKINS trade marks – the connection between BUNNYKINS and the opponent is well known, as the declaration of Ms Jungwirth attests.

1. I am unconvinced by the applicant’s arguments that it selected the surname DOULTON from telephone books or on-line surname directories.  In fact, DOULTON is a rare surname (occurring just 18 times on the Australian Electoral Roll) such that its use by the opponent could be regarded as arbitrary and unusual.  While Mr Frydman says in his declaration, “we considered the surname DOULTON would work well for us from a marketing perspective,” he does not state why this was so.  The suggestion that the opposed trade mark was selected from a telephone directory seems to me to be dissonant with the rarity of the surname and I do not accord it much weight.  In Twentieth Century Fox Film Corporation and Matt Groening Productions Inc v the South Australian Brewing Co Ltd and Lion Nathan Australia Pty Ltd [1996] FCA 1484, Tamberlin J observed, at paragraph 84:

   Some later decisions suggest that where the confusion is accompanied by an element of intention there is merit in the view that the Court will more readily conclude there has been a misrepresentation or deceptive conduct. See Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460 at 473-5

2. In the context of the expression ‘Royal Doulton’, the word ‘Royal’ is of lesser importance in distinguishing between the expression and other names or trade marks consisting of or containing the word ‘Doulton’.  I am inclined to put greater weight on the opponent’s arguments that the word ‘Royal’ is one which many traders use to give a cachet of exclusiveness or richness, or to associate themselves with royalty.

3. In view of the opponent’s actual franchising of its trade marks on chocolates – and in light of the fact the opponent’s ROYAL DOULTON name and trade mark is very well known, I think it is likely that the public will believe that the applicant’s DOULTON chocolates are a variant of the ROYAL DOULTON chocolates or other confectioneries of the opponent.

4. It is likely in my estimation that the opponent’s use of the opposed trade mark on the goods for which registration is sought would mislead or deceive in terms of section 52 of the Trade Practices Act 1974.

5. The opponent has established its ground under section 42 of the Act.

   Section 60

   32.  At the relevant date, section 60 of the Act provided:

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

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

   (a)       it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, had 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 1:For deceptively similar see section 10.

   Note 2:For priority date see section 12.

   61Trade mark containing or consisting of a false geographical.

6. Thus there are several questions that I must decide, whether the opponent’s trade mark:

   ·     is substantially identical or deceptively similar

   ·     and had a reputation

   ·     before the priority date

   ·     and if the above factors are established, the use of the opponent’s trade mark is likely to confuse or cause deception.

7. As I have previously mentioned, the applicant submits that the words “by ROYAL DOULTON” appearing on the packaging of the chocolates, shown above, are not use of a trade mark but use of the opponent’s name.  Initially I will observe that the opponent’s name is Royal Doulton (UK) Ltd and thus, if the words are a use of the opponent’s name, it is a very informal use.  However, on many occasions the use of trade marks and company names will blur into one and, in the end, I am satisfied that the words function so as to met the definition of a trade mark at section 17 of the Act:

   17  What is a trade mark?

   A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

   Note:For sign see section 6.

8. The words DOULTON and ROYAL DOULTON are not, on a side by side comparison, substantially identical: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1953] HCA 73; (1954) 91 CLR 592 per Windeyer J at paragraph 12.

9. Concerning deceptive similarity, the test to be applied occurs at paragraph 13 of Southern Cross:

   On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It 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 impressions that such persons would get from the defendant's television exhibitions. To quote Lord Radcliffe again: "The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the  marks  clearly before him . . . . It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole": de Cordova v. Vick Chemical Co (1951) 68 RPC, at p 106 . And in Australian Woollen Mills Ltd v. F.S. Walton & Co. Ltd. [1937] HCA 51; (1937) 58 CLR 641 Dixon and McTiernan JJ. said: "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" (1937) 58 CLR, at p 658.

10. The trade marks are, in my estimation, deceptively similar.  As noted above, the word ROYAL performs a function quite subservient to the word DOULTON in the opponent’s trade mark and is one which is in my experience frequently used by traders to denote or imply some richness or exclusiveness in their goods.  Thus the word DOULTON is of considerable aid in distinguishing between the opponent’s trade marks and others and, accordingly, it is with some emphasis on the word DOULTON by which the opponent’s trade mark will be remembered and recalled.  I also observe that the word DOULTON is the whole of the applicant’s trade mark which has no other features by which it might be distinguished from the trade mark of the opponent.

11. The opponent’s trade mark also has, for the reasons given in paragraph 22, a reputation in Australia.  Although the sales of confectionery under the trade mark are not particularly high, the opponent’s trade mark has been used for a longer duration on puddings, biscuits and cakes.  And it has been used for some considerable time on ceramics, home furnishings, cutlery, jewellery, figurines, and glassware.

12. As I have previously implied, it would seem that it is the reputation of the opponent’s name which has led the applicant to believe that the surname DOULTON would work well for it from a marketing perspective.

13. On balance, I am satisfied that the opponent’s use of the trade mark DOULTON would deceive or confuse because of the prior reputation of the opponent’s trade mark ROYAL DOULTON and I note that the opponent has used its trade mark on these particular goods.

14. The opponent has established its opposition under section 60 of the Act

    Decision

    42.  Section 55 of the Act  provides:

    55 Decision

    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.

15. I refuse to register application 1046886.

    Costs

16. The opponent is entitled to its costs which I award against the applicant at the official scale.

    Iain Thompson
    Hearing Officer
    Trade Marks and Designs Hearings
    18 April 2008