Rubelli Spa v Virtual Couch Industries Sdn Bhd

[2011] ATMO 3

TRADE MARKS ACT 1995

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

Re:Opposition by Rubelli Spa to registration of trade mark application 1087200(20) – RUBELLI (series of 3) - filed in the name of Virtual Couch Industries Sdn Bhd.

Delegate:	Debrett Lyons
Representation:	Opponent: Gerard Skelly of Spruson & Ferguson Applicant: Andrew Fox of Counsel, instructed by Griffith Hack
Decision:	2011 ATMO 3 s52 Opposition – ss 42(b), 43, 44, 60, 58A and 62; ss 43 and 62 established in part. Endorsement imposed. Specification restricted. Costs awarded against Applicant.

Background

1. On 22 November 2005, Virtual Couch Industries Sdn Bhd (“the Applicant”) made application under section 51of the Trade Marks Act 1995 (“the Act”) to register a series of three trade marks which appear below:

2. The series of three trade marks was accepted for registration and the application was advertised for opposition purposes on 23 November 2006 in the Australian Official Journal of Trade Marks in respect of the following class 20 goods:

   furniture namely, motion furniture, motion upholstery, leather recliners, sofas, lounges and chairs and all furniture which may support the human body.

3. The application was also subject to the endorsement that:

   The third mark in the series of trade marks is depicted in the colours RED, GREEN and WHITE as shown in the representation of the trade mark attached to the application form.

4. Rubelli S.p.A. (“the Opponent”) requested and was granted an extension of time until 23 May 2007 to file a Notice of Opposition (“the Notice”) and on that extended date a Notice was filed relying on most grounds available to the Opponent under section 52 of the Act.

5. Evidence in support of the opposition consists of a Statutory Declaration by Lorenzo Favaretto Rubelli made on 1 October 2008.

6. Evidence in answer consists of a:

   §  Statutory Declaration by Chai Kian Peng made on 7 December 2009;

   §  Statutory Declaration by Kevin Hodgeman made on 8 February 2010; and

   §  Statutory Declaration by Jeff Carswell made on 11 February 2010.

7. No evidence in reply was served.

8. After the service and filing of that evidence the parties asked to be heard and the matter came before me in Sydney on 22 July 2010. The Applicant was represented by Andrew Fox of Counsel, instructed by Griffith Hack, Patent & Trade Mark Attorneys  and the Opponent was represented by Gerard Skelly of Spruson & Ferguson, Patent & Trade Mark Attorneys.  Both parties made written and oral submissions.

Discussion

1. I proceed on the basis that the opponent need only establish one of its grounds of opposition on the balance of probabilities in order to succeed[1].

   [1] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599. See also Chocolaterie Guylian N.V. v Registrar of Trade Marks (2009) 82 IPR 13 at [22] to [26] and Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664 (25 June 2010) at [26] to [40].

10. Of the grounds of opposition listed in the Notice, Mr. Skelly indicated that the Opponent would only press those which depended on sections 42(b), 43, 44, 60 and 62 of the Act. It follows from what I said in paragraph 9 that the remaining grounds listed in the Notice have not been established.

11. Mr. Skelly also proposed to rely on section 58A of the Act. Section 58A was not listed in the Notice and a question arises as to whether I should disregard any submissions based on it.

12. Section 58A was added to the Act by the Trade Marks Amendment Act2006. The application was accepted just after section 58A came into operation[2]. The effect of section 58A is better explained elsewhere, however a view could reasonably be taken that an opponent might not know that section 58A is of relevance to the opposition until after the applicant had served its evidence in answer. Even so, there remains an open question as to whether or not the Opponent in this case should have sought amendment of its grounds of opposition prior to the hearing. For reasons which follow, section 58A has no ultimate influence on the outcome of this opposition and so I do not need to reach a considered opinion on those matters.

[2] See sections 29 and 30 of the Amendment Act.

13. Mr. Skelly conceded that the Opponent’s principal plank of attack was founded on section 44 of the Act and the submissions of both sides were dominated by that ground of opposition. I start there and for reasons which emerge, I have subsumed within the section 44 analysis the Opponent’s submissions relating to the section 62 ground of opposition.

Section 44 ( and section 62 )

14. Insofar as relevant to this matter, section 44 of the Act provides:

Identical etc. trade marks

44.(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.

15.  The Opponent relies on its Australian registration 929625 (“Opponent’s Registration”) for the trade mark appearing below, registered in class 24 for “woven fabrics and textile goods, namely textile fabrics, curtains, blinds, household linen, table and bed linen; bed and table covers”.

16.  The Opponent’s Registration has a priority date of 2 August 2002, thereby predating the application.

17. Section 44 requires that one or more of the trade marks in the applied for series be substantially identical with, or deceptively similar to, the trade mark of the Opponent’s Registration. Before I make the relevant comparison(s) it is convenient to first look to the Opponent’s ground of opposition under section 62(b) of the Act.

Section 62(b)

18. Section 62(b) states that the registration of a trade mark may be opposed on the basis that the Registrar accepted the application on the basis of evidence or representations that were false in material particulars.

19.  The Opponent submitted that the three trade marks did not qualify as a series when the application was filed on 25 November 2005 and that, by implication, the false representation was inherent in the application.

20. To qualify as a series under section 51 of the Act, the marks of the series must “resemble each other in material particulars and differ only in respect of one or more of the following matters: (a)  statements or representations as to the goods or services in relation to which the trade marks are used or are intended to be used; (b)  statements or representations as to number, price, quality or names of places; or (c)  the colour of any part of the trade mark.

21. Mr. Skelly made no reference to the fact that section 51 has been amended and it is the unamended version of the section which was relevant to the application at the time it was examined and accepted. In so far as it makes any difference, prior to amendment section 51 carried a subsection 51(2)(d) which in addition to the factors set out above, required one to also isolate “any matter that is not inherently adapted to distinguish the goods or services and does not substantially affect the identity of the trade marks”.

22.  Mr. Skelly argued that the device element in the second and third marks substantially affected the identity of the RUBELLI word mark.  He did not refer to any case law in support of his claim but he may be correct.  In Lynson (Aust) Pty Ltd’s Appn (1987) 9 IPR 350, for example, Assistant Registrar Farquar said:

Briefly, and only in general terms, the variation between members of a series must be such that no additional element or dimension is contributed thereby to the overall identity of the marks; the “idea” of the mark must remain the same. If the marks consist of a word, then that word must be the only element in the identity of each member of the series. The typescript may be varied, but only between known, conventional scripts, not fanciful get-up. The spelling may be varied, but only if the pronunciation and meaning remain unaffected. The separation of one word into two, or the running together of two words would be governed by the same considerations: the sound and meaning must remain the same. The appearance of the word or words must also be taken into account when the spelling or physical arrangement of the letter is varied.  …  It is obvious that the addition of a device element to a word mark would, in almost all cases, constitute a substantial alteration to its identity, the only exception being the simplest of conventional embellishments, contributing nothing of distinction to the mark as a whole.

23. But no matter whether the three marks qualified as a series or not, there is no evidence of any relevant false representation so as to engage section 62(b).[3] Whether two or more trade marks properly form a series for the purposes of section 51 is a technical question. It is the Registrar’s task to examine such an application, not the applicant’s burden to warrant that that his series application is free from defect. Were it otherwise, every applicant who, by the act of filing, implicitly claims to be the owner of his trade mark would, if that representation turned out to be unsupportable, offend not only section 58, but also section 62(b). That does not seem correct to me.

[3] See Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 74 IPR 246 at 285-287 [182]-[186].

24. The ground of opposition under section 62(b) is not established and absent any detailed reasoning from the Opponent to support the claim that the marks do not qualify as a series, it is not my intention to revert the application to re-examination as it is within my power to do.

25. Accordingly, for the purposes of section 44 and the determination of deceptive similarity or substantial identity, I need only compare the trade mark of the Opponent’s Registration with the first mark of the series and find that they are substantially identical[4].

[4] See Shell Co. (Aust) Ltd v. Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407, 414-415 per Windeyer J.

Section 62(a)

26. Section 44 also requires a comparison of the goods of the Opponent’s Registration with the goods of the application. Before doing so, it is convenient to look at the Opponent’s ground of opposition under section 62(a) of the Act.

27. Section 62(a) states that the registration of a trade mark may be opposed on the basis that the application, or a document filed in support of the application, was amended contrary to the Act.

28. The application was originally filed in class 20 nominating goods of interest as “furniture”. The examiner raised an objection under section 44 of the Act based on the Opponent’s Registration. He considered that “furniture” and “blinds” were similar goods[5].

[5] As defined in s 14(1) of the Act, that is to say that “furniture” and “blinds” were “goods of the same description”.

29.  In response, the Applicant requested that the goods specification be amended to “furniture namely, motion furniture, motion upholstery, leather recliners, sofas, lounges and chairs and all furniture which may support the human body”.

30.  Mr. Skelly submitted that “motion upholstery”:

is an ambiguous term and no explanation as to what “motion upholstery” actually is has been requested or been provided by the Applicant.  … [I]t is our view that “motion upholstery” refers to upholstery for motion furniture in the context of the Applicant’s goods given the definition of the word “upholstery” and the reference to “motion furniture” in the specification of goods. The Merriam Webster online dictionary defines “upholstery” as “materials (as fabric, padding and springs) used to make a soft covering especially for a seat”. Therefore, depending on the nature of the “motion upholstery”, this broad claim may not be proper to class 20 or requires qualification so it is proper to class 20. In our view, many of the “upholstery” goods are proper to class 24. Accordingly, the application has been improperly amended.

31. I agree with Mr. Skelly that no matter what might be meant by “motion upholstery” and ignoring what Nice Classification should be made of such goods, they remain a species of upholstery. The addition of “motion upholstery” was an amendment of the application contrary to the Act since it was contrary to section 65(7). I find that the opposition is established, in part, on the basis of section 62(a).

32.  Mr Skelly also advanced an argument that:

the Registrar erred in withdrawing the objection raised based on prior registration 929625 and that the requested amendment was not sufficient to allow the objection to be withdrawn. We submit that there remains an overlap between at least “blinds” of the Opponent’s Registration and all the goods of the Opposed Mark or at the very least with the broad claim to “furniture to support the human body”.

33.  Whether the goods were in conflict or not was so from the date of filing of the application when it claimed “furniture” simpliciter. Mr. Skelly’s argument fails because if the goods collide under section 44, then they did so from filing and not in consequence of an amendment of the application or a document filed in its support.

34. In summary, and ignoring for the moment the remaining grounds, the opposition is established under section 62(a) to the extent that the goods described as “motion upholstery” are to be removed from the application.

35. It remains to determine for the purposes of section 44 whether the goods set out below are similar goods.

Applicant	furniture namely, motion furniture, leather recliners, sofas, lounges and chairs and all furniture which may support the human body
Opponent	woven fabrics and textile goods, namely textile fabrics, curtains, blinds, household linen, table and bed linen; bed and table covers

36. Section 14(1) of the Act states that goods are similar to other goods (a) if they are the same as the other goods, or (b) if they are of the same description as that of the other goods.

37.  None of the compared goods are the same.  Even if, for example, a hammock might be described as “furniture which supports the human body”, it is not the same as, say, “textile fabrics”.  Whether there are goods of the same description is less straightforward.  I accept the Opponent’s submission that pieces of “motion furniture” are goods in the nature of chairs or sofas with extending leg/footrest and/or reclining backrest mechanisms.  I note that the Applicant did not take issue with that explanation of its goods.

38.  The Opponent argued that it is not uncommon for upholstery and furniture to be produced by the same manufacturer, distributed by the same wholesale houses or sold through the same retail stores over the same counters during the same seasons and to the same class or classes of customers.

39.  For the Applicant, Mr. Fox rightly responded that the Opponent had not served any evidence to support those contentions. Mr. Skelly cited in argument the businesses conducted under the RALPH LAUREN and LAURA ASHLEY trade marks as illustrative of his claims.  He argued that “a consumer seeing the trade mark RALPH LAUREN on a chair and on a cushion or vice versa is likely to be caused to wonder if the goods emanate from the same trade origin”.

40.  Mr. Skelly went on to suggest that: 

When purchasing a bed, consumers may purchase bed linen also. Beds would fall under the ambit of “all furniture which may support the human body”. If these items were sold under the same trade mark, the consumer is sure to think that the goods emanate from the same trade source.  Equally, when purchasing a lounge suite, consumers may also look to purchase wallpaper, curtains, table linen etc on the basis that the goods all complement each other. It is the Opponent’s contention that when a consumer intends to purchase a piece of furniture such as a lounge suite, that consumer also considers the type of upholstery as part of the purchasing decision.

41.   Mr. Fox again replied that the Opponent had not by evidence shown any of those purchasing patterns to be typical.

42.  I accept Mr. Fox’s criticism that the Opponent’s arguments are speculative and not founded on its evidence in support.  Nonetheless, it would be open to me in this tribunal to accept Mr. Skelly’s claims as matters of common general knowledge were I so inclined.  

43. I resist the easy attraction to Mr. Skelly’s arguments when I take stock that both RALPH LAUREN and LAURA ASHLEY are trade marks already loaded with very substantial goodwill in a fashion and lifestyle sector of the consumer market where brand name extension is rife. The examples cited by Mr. Skelly might be apposite comparisons under section 60 if a reputation could be shown to exist in the Opponent’s trade mark in Australia before the priority date, but they are mere distractions under section 44.

44.  Moreover, it is within my common general knowledge that both RALPH LAUREN and LAURA ASHLEY sell their goods through their own stores or, to a lesser extent, from concession points within large department stores. 

45.  Finally, I remind myself that although Mr. Skelly draws his own conclusions about the purchasing habits of those people selecting upholstered furniture, upholstering fabric is not, in name at least, one of the goods covered by the Opponent’s Registration.

46.  I find it more helpful to return to the test first propounded by Romer J in  Jellinek’s Application (1946) 63 RPC 59 at 70 and pay primary regard to the nature and composition of the goods, the respective uses of the goods, and the trade channels through which the goods are bought and sold.

47.  None of the compared goods are of the same nature and composition.  To the extent that some furniture might be upholstered and “textile fabrics” might, along with springs, padding and other paraphernalia, be part of the suite of materials used in the upholstering process, I refer to Wilder Days Pty Ltd v Karhugh Properties Pty Ltd (1993) 27 IPR 473 at 479 where Hearing Officer Williams noted that when comparing the nature of goods “it is not decisive that some are raw materials from which the others are made”.

48.   Turning to the respective uses of the goods, there is only a subset of the goods of the Opponent’s Registration which require attention, namely, “textile fabrics”, “bed linen” and “bed covers”.  One of the great many uses of textiles fabrics is in the upholstering process.  Otherwise, textile fabrics have hundreds of applications and I see no necessary connection with the Applicant’s goods.  On the other hand, bed linen and bed covers have essentially one use and there is no doubt that beds are furniture for supporting the human body.

49.  When I turn to look at the trade channels through which these goods are bought and sold I stop short of acceptance of the Opponent’s claim that these goods are sold in the same shops over the same counters during the same seasons and to the same class or classes of customers.  There is nothing before me to suggest that is the case with beds, on the one hand, and bedding on the other.  Indeed, my experience tells me that those goods are frequently sold in very different sections of large department stores and are frequently sold in altogether different specialty shops.

50. For these reasons I do not find that any of the compared goods which are set out in paragraph 35 are similar goods. Accordingly the Opponent has not established its ground of opposition under section 44.

Section 58A

51. For the reasons just given, section 58A has no application to this opposition.

Sections 42(b) and 60 ( and Reputation)

52. The parties disagreed as to whether section 60, which was amended by the Trade Marks Amendment Act 2006, applied to this opposition in its amended or unamended form[6]. I need not enter into that debate as it has no influence on my reasoning in this case. The establishment of both section 60 and section 42(b) has a common dependency upon proof of reputation in the Opponent’s trade mark in Australia before 22 November 2005. Accordingly I first examine the Opponent’s claim to reputation.

[6] See, for example, Apple Computer v Today Tech Group Pty Ltd [2007] ATMO 40 (17 July 2007); see also Health World v Shin-Sun (2008) 75 IPR 478 at [106]-[115].

53.  The Opponent is an Italian company of some considerable pedigree which has used the trade mark RUBELLI for many, many years.  There is one declaration in support of the opposition made by Lorenzo Favaretto Rubelli whose involvement with the Opponent dates back to 2001.  Mr. Rubelli’s evidence is that the Opponent is a producer of fine fabrics made from silk, linen, cotton and wool.  Those goods are sold in two markets which he describes as the ‘residential market’ and the ‘contract market’.  The goods sold to the residential market are damasks, lampasses, brocades, plain and striped jacquard velvets, sheers and prints.  Mr. Rubelli describes the consumers of these products as distributors, retailers, interior designers, architects, decorators and upholsterers.  In the contract market, the Opponent sells fire-retardant fabrics to the hospitality and cruise ship sectors.

54.  The evidence is clear that the Opponent is a manufacturer of very fine, high-end goods.  The core questions in this case are whether it had a reputation in this country at the relevant time and, if so, what kind of reputation it enjoyed.

55.  In McCormick & Co Inc v. McCormick (2000) 51 IPR 102, Kenny J discussed the meaning of “reputation” in section 60 and said that it was permissible to infer reputation from the high volume of sales and advertising expenditure. Bearing in mind what I have just said of the Opponent’s goods, I am also mindful of what was said by Hearing Officer Thompson in Hugo Boss AG v. Jackson International Trading Company 47 IPR 423 at 436,:

The reputation of a trade mark derives both from the quantum of sales under that mark and also the esteem, or image, projected by that trade mark.  The quantum of sales, advertising and promotion contributes to the ‘recognition’ component of the trade mark’s reputation.  The credit, image and values projected by a trade mark attaches to the ‘esteem’ component of the reputation as do the public events and other traders’ marks with which the owner of the trade mark in question chooses to associate the trade mark via sponsorships, cross-promotions, ‘contra deals’ and so forth.

56.  Mr Rubelli declares that the Opponent has sold its fabrics to the residential market in Australia since 1993.  Confidential sales and advertising information is given in Mr. Rubelli’s declaration.  Sales figures date from 1993 although the first documented Australian sale is an invoice dated 21 May 1996.  It was issued to St James Furnishings Pty Ltd in Hawthorn, Victoria.  It does not include the trade mark, at least not in its registered form.  The invoice carries a letterhead with the name “LORENZO RUBELLI” plus the Italian corporate abbreviation “SpA” in much smaller font size, together with a prominent device consisting of a lion’s head and forearms holding open a book in which the letters “L” and “R” are shown on the opposing, open pages.  I observe that the evidence shows use of this trade mark, or machinations of it, up to about 1998.

57.  Mr. Fox described the confidential Australian sales figures as “extremely modest”.  In my view that characterization is unjustifiably dismissive.  Even if I only count the (approximate) decade of Australian sales after the Opponent transitioned to use of a trade mark which essentially featured the word RUBELLI, the annual sales correspond with what I would call a small but steadily improving business in this country.

58.  Mr. Fox observed that of the Opponent’s top fifty products in terms of “linear meters” of product sold, only nineteen sold more than ten metres of material and the top selling product only sold 88 metres in the relevant period.

59.  The evidence shows that before 22 November 2005 the Opponent sold its products in Australia to three distributors, namely, St James Furnishings Pty Ltd in Hawthorn Victoria, Wardlaw trading as ‘St James’ in Hawthorn Victoria and Brunschwig & Fils in Sydney.  The fabrics were sold in lengths to those businesses.  There is no evidence of further sales to users.  There is no evidence of what was ultimately done with the Opponent’s goods.  Although the very nature of the Opponent’s goods would infer one of their principal uses to be as furniture coverings, there is no direct evidence of that, nor, more importantly, does the evidence identify with any precision the nature or diversity of the actual Australian consumers of the goods.  Based on Mr. Rubelli’s declaration, I must deduce that the goods would be bought by, or bought at the recommendation of, interior designers, architects, decorators and upholsterers.

60.  The evidence causes me to reach the conclusion that the Opponent had only the most rarified reputation in its trade mark in Australia on 22 November 2005.  The sales evidence is small, the advertising slim, the audience for the goods very narrow and the risk of invisibility of the trade mark to end users (and third parties) significant.  There is no further evidence which would cause me to reach a different conclusion.

61.  Set within the context of section 60, Mr. Fox adapted the wording in McCormick & Company Inc v McCormick (2000) 51 IPR 102 at [81] and proposed that the relevant question is:

Does the evidence establish that in Australia before [22 November 2005], the opponent’s mark was recognised by the public generally and, because of that, the use by the [Applicant] of the opposed trade mark would be likely to cause the public confusion, as for example, by the public mistakenly attributing a business connection between the two or attributing [the Applicant’s] product to [the Opponent]?

62.  My finding is that it does not.  Accordingly, section 60 is not established.

63. The ground of opposition based on section 42(b) requires evidence that use of the trade mark “would be contrary to law”. The Opponent submits that use of the trade mark (i) would offend one or both of sections 52 and 53 of the Trade Practices Act 1974 and/or (ii) would be trade mark infringement under section 120 of the Act.

64.  In short, the former claim fails for the same reason section 60 fails (insufficient reputation to trigger operation of those sections) and the latter claim depends on findings that either the parties’ goods are “goods of the same description” (section 120(2)) or that the Opponent’s trade mark is well known in Australia (section 120(3)).

65. I have previously made findings adverse to the Opponent on all elements material to the success of those claims. The ground of opposition based on section 42(b) is not established.

Section 43

66. Section 43 of the Act states that:

An application for the registration of a trade mark in respect of the particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.

67. Section 43 has no ancestry in earlier trade mark legislation in this country and has been criticized for its vague meaning and unclear function in Part 5 of the Act. In Pfizer Products Inc v Karam (2006) 70 IPR 599, Justice Gyles said:

Section 43 does not have a long pedigree. It was enacted pursuant to Australia’s obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). TRIPS and the 1992 Working Party Report led to a 1994 Bill containing the following cl 42(2):

‘An application for the registration of a trade mark in respect of particular goods or services must be rejected if the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion regarding:

(a)the nature, quality, origin, intended purpose, or some other characteristic, of the goods or services; or

(b) any connection or relationship that they may have with any particular person.’

That Bill was enacted but never came into force. In the 1995 Bill (and Act) cl 42(2) of the 1994 Bill was replaced by what is now s 43 of the 1995 Act. The Explanatory Memorandum stated that cl 43 provides:

‘That an application for registration must be rejected if the trade mark ... because of some signification inherent to it, would be likely to deceive or cause confusion regarding a characteristic of the goods or services.’

It seems that the final form of s 43 is a wider version of the earlier clause with a similar purpose.

‘Connotation’ is a secondary meaning implied by the mark. The likelihood of deception or confusion must flow from the secondary meaning inherent in the mark itself. It is apparent that the underlying purpose of s 43 is a similar purpose to that lying behind ss 52, 53 and 55 of the Trade Practices Act 1974 (Cth). It is to prevent the public being deceived or confused as to the nature of the goods offered by reason of a secondary meaning connoted by the mark in question…

68. The issue raised by section 43 is whether there is some connotation inherent in the trade marks that will, through use, cause deception or confusion amongst consumers. The Opponent’s arguments were that (i) the use of the word RUBELLI by the Applicant gives rise to a connotation that there is some affiliation or association between it and the Opponent; and (ii) use of the colours green, white and red in the manner of the Italian national flag gives rise to the connotation that the Applicant’s goods are made in Italy or “relate to Italy in some way”.

69.  Once more, absent an Australian reputation in the Opponent’s trade mark, the connotation alleged by paragraph 72(i) can not arise.  I find that it does not.  Moreover, the connotation alleged by paragraph 72(ii) is sustainable, if at all, only in respect of the third trade mark of the series since the second mark is in black and white.

70.  As to the connotation alleged to be inherent in the third trade mark, the Applicant argued that:

… a case which depends on connotation based on colour (or colours) alone is, it is submitted, of an entirely different class to that which depends on connotation based on a word (or words).  A word, such as place or country name, for example, ‘BAVARIA’, may give rise to an immediate connotation that a product is associated with, or derives from, that place.  Such a word alone, without more, may give rise to such a connotation: eg. Bavaria NV v Bayerischer Brauerbund eV (2009) 81 IPR 279 at [70],[89]. However, as soon as the matter ventures into the territory of having to take account of other issues, such as the extent of surrounding material (including colours and other words), then it is submitted that the task confronted by an Opponent in establishing this opposition ground is made considerably more difficult: see Bavaria at [89]-[111]. The present case falls within this camp, particularly as the only word contained in the Opposed Mark does not, in itself, have any meaning (such as a place name). … Even if the Third Series Mark (being the only mark within the series which is in colour) did invoke reference to the Italian flag, or Italy (which is denied), the mere ‘invoking’ of such a reference does not establish that consumers would be likely to be deceived or confused: see McCorquodale v Masterton (2005) 63 IPR 582 at [33].

71.  In the recent case of Mount Everest Mineral Water Limited v. Himalayan Spring Mineral Water Pty Ltd, 2010 ATMO 85, Hearing Officer Heath observed that :

Placing particular emphasis on a strict dictionary definition of the word “connotation” may have the effect that if trade marks consisted only of obvious or primary meanings (i.e. not secondary or implied) these would not amount to “connotations” and would therefore fail the threshold test. Under such an interpretation, an opposition under section 43 would fail, despite the use of the trade mark being likely to deceive or cause confusion in the Australian marketplace.

However, it is clear from the Explanatory Memorandum and the 1994 Bill referred to above that this was not the intention of the section at the time it was introduced. A direct expression may, (if not technically a connotation), still amount to a signification inherent to the trade mark. Therefore, if a trade mark consists of a direct statement that the goods will originate from a particular region or outlines the nature of the goods, and there is scope within the goods/services for that statement to be misdescriptive, confusion will result. The intention for section 43 to also cover misdescriptive trade marks has its roots in the provisions of the 1905 Act, as stated in Re “Orlwoola” Trade Mark[7] where Cozens-Hardy MR decided:

[7] Re “Orlwoola” Trade Mark (1909) 26 RPC 850 (CA UK) at 860.

If the goods are wholly made of wool the words are the natural and almost necessary description of them. If they are not made wholly of wool it is a misdescription which is so certain to deceive that its use can hardly be otherwise than fraudulent. In either case the words are utterly unfit for registration as a trade mark.

Almost eighty years later, in relation to section 28(a) of the Trade Marks Act 1955[8], the trade mark BUBBLE UP & DEVICE was also held by King J to be misdescriptive if it was applied to non-aerated beverages in class 32.[9] While not explicitly clarified in more recent Hearings decisions on section 43, it appears that a similar reasoning has been applied in Westchester Media Company, L.P v Australian Polo Magazine Pty Ltd[10] where the delegate commented that she would have found magazines bearing the trade mark “POLO Magazine” which did not contain material on the game of Polo to be misleading to the purchasing public. Another potentially descriptive trade mark was considered in Effem Foods Pty Ltd v Star-Kist Foods, Inc[11] where the delegate noted that: “the term "meaty bone" is a powerful description and, conversely, potentially misdescriptive where the goods are not meaty bones.”

[8] The predecessor to section 43 of the Trade Marks Act 1995.

[9] Seven-Up Co v Bubble Up Co Inc (1987) 9 IPR 259.

[10] Westchester Media Company, L.P v Australian Polo Magazine Pty Ltd [2000] ATMO 100

[11] Effem Foods Pty Ltd v Star-Kist Foods, Inc (2000) 50 IPR 121

In Scotch Whisky Association v De Witt,[12] Sundberg J found:

[12] Scotch Whisky Association v De Witt (2007) 74 IPR 382 at [60] (“Glenn Oaks”)

Where goods are denoted as being from a particular country, this constitutes another factor that reduces the possibility of confusion: Green’s Application (1946) 64 RPC 14. [61] Both involved and uninvolved purchasers of bourbon and scotch whisky products will inspect labels and see that the product is in fact bourbon, made in the USA or the states Kentucky or Tennessee. A label indicating bourbon, bourbon whiskey and/or made in the USA clearly connote an origin of a place other than Scotland. Labels indicating ‘Tennessee Whiskey’ again connotes an origin in a place other than Scotland. For a mark to be rejected under s 43 there must be a ‘real tangible danger of deception or confusion’. That exceptionally stupid or careless consumers might be confused does not suffice.

While the above comments must be viewed in the context of a disputed Scottish connotation in the “Glenn Oaks” trade mark, it is clear from the above extract that Sundberg J is using “connotation” in the broadest sense. If connotation under section 43 only concerns secondary or implied meanings, a label comprising a clear statement of geographic origin such as “Made in the USA” or “Tennessee Whisky” would technically denote a place of origin, not connote it. So, while the definition of the word “connotation” is clear, its application to section 43 (under certain circumstances) is less so.

… …

The operative test is the secondary meaning which arises from the reasonable expectations of the consumer after considering the meaning in the context of the goods. It does not follow that all trade marks containing descriptive matter would attract a section 43 objection. Only if there is a real and tangible danger that the consumer’s expectations may turn out to be false and result in confusion, would section 43 be triggered.

…  …

The High Court in Radio Corp Pty Ltd v Disney,[13] commented that a trade mark should not be registered if it involves “a misleading allusion or a suggestion of that which is not strictly true.” However, in the context of the application of section 43 under the 1995 Act, the decisions of Aktion Zahnfreundlich v Suntory Limited (1998) 42 IPR 593 and Effem Foods (supra) indicate that any relevant connotation must be more than a mere “allusion” or “suggestion” to offend the section.

…  …

To avoid a trade mark being used in a misdescriptive (and therefore deceptive or confusing) manner under section 43, it is common for the Registrar to apply an endorsement to the trade mark applying a condition on its use on the goods claimed.[14] … To obviate the likelihood of deception or confusion resulting from the direct meanings in the applicant’s trade mark, I find it necessary for a condition of registration to be applied to the opposed application. Therefore, on its face, the ground of opposition under section 43 of the Act has been partially established by the opponent.

[13] Radio Corp Pty Ltd v Disney (1937) 57 CLR 448 at 453.

[14] See Federation of the Swiss Watch Industry F.H. v K-Swiss Inc [2009] ATMO 78; Aventis Pharma SA v Alphapharm Pty Ltd [2005] ATMO 15.

72.  The primary declaration relied upon by the Applicant is from Mr. Peng, one of the founding directors of the Applicant company which is incorporated in Malaysia.  Mr. Peng declares that in 1996 the trade mark RUBELLI was coined by the Applicant as word play on the Malaysian colloquial slang of ‘LU BELI’, which in English means “you buy”.  Mr. Peng further declares that the tricolour combination of the third trade mark was chosen to convey the following meanings: the colour green to denote furniture that is made from wood obtained from sustainable forests and thus is eco and/or environmentally friendly; white to denote the honesty and purity of the business; and red to signify prosperity and wealth.

73. I have taken heed of the warning sounded by Sundberg J. “that exceptionally stupid or careless consumers might be confused does not suffice” but I have found section 43 to be triggered because, as Hearing Officer Heath put it, within the context of the goods there is a real and tangible danger that the consumer’s expectations may turn out to be false and result in confusion. Whatever might be thought of Mr. Peng’s account of the choice of the third trade mark, assessment of the connotation carried by a trade mark is an objective question largely uninfluenced by the intentions of the author of the trade mark. The goods are of a kind where Italian products have held pride of place in the international market. The tricolours of the third trade mark would, in Australia, readily be recognized as the Italian flag. The evidence did not show the word “Rubelli” to be understood to mean “you buy” by the Australian purchasing public and in my opinion it would readily be perceived as an Italian family name (as indeed it is).

74. The ground of opposition under section 43 of the Act has been established in respect of the third trade mark to the extent set out below under my Decision.

Decision

75. Section 55 of the Act relevantly provides:

Decision

55. 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.

76.  The trade mark application may proceed to registration one month from the date of this decision in respect of the following goods,

furniture namely, motion furniture, leather recliners, sofas, lounges and chairs and all furniture which may support the human body,

subject to the following endorsement:

The third mark in the series of trade marks is depicted in the colours RED, GREEN and WHITE as shown in the representation of the trade mark attached to the application form,

and condition of registration:

It is a condition of registration that the third mark in the series of trade marks will only be used on goods either made in Italy or from materials made in Italy.

77.  If the Registrar has been served with a notice of appeal before that time I direct that registration shall not occur until the appeal has been decided or discontinued.

Costs

78.  Having partly established its opposition, I decide that the Opponent is entitled to its costs which I award at the official scale against the Applicant.

Debrett Lyons
Hearing Officer
Trade Marks Hearings
18 January 2011