Scales and Systems Pty Ltd v Sartek Pty Ltd

[1993] ATMO 2

Trade Marks Act 1955
Decision of a Delegate of the Registrar of Trade Marks

Re:Opposition by Sartek Pty Ltd to the registration of application 503863 in the name of Scales and Systems Pty Ltd.

Background
Trade mark application 503863 is in the name of Scales and Systems Pty Ltd ("the applicant") and the goods specified in the application are all those in class 9, with specific inclusions of automated and computerised systems for processing and packaging foods, and of process control systems, computer or electronically controlled carton printing processing, weighing and labelling devices.  The trade mark the subject of the application, which was lodged on 31.1.89, is SASTEK.

Registration of the application has been opposed, as provided for by sub-section 49(1) of the Trade Marks Act 1955, by Sartek Pty Ltd ("the opponent"), primarily on grounds which fall under the following headings:
. section 40:  defective proprietorship, based on an alleged lack of intention to use the mark on all the goods specified, and in the alternative based on prior use of the trade mark ASTEC and/or SARTEK.
. section 33: conflict with prior registrations, particularly one of ASTEC for electronic goods and components.
. section 28: deception or confusion caused by the applicant's use in the face of SARTEK and/or other trade marks. 

I note that section 33 was not specifically referred to in the notice of opposition, and will revert to that point later.

After the evidence stages provided in the regulations the matter was set down for hearing on 31.8.92.  The applicant was represented by Mr Claude Anese, an attorney of the firm of Cullen and Co, while the opponent was represented by Mr John Pizzey, of the patent attorneys Pizzey and Company. 

Having heard the parties I turn to the evidence.

Opponent's Evidence in Support
The opponent has served both evidence in support and in reply, and relies on the declarations of Craig Parkinson, its managing director.  Also relied on is a supporting declaration by Vaclav Novotny, a radio and television technician.

Mr Parkinson declares that he has made trade enquiries that show that the applicant is involved only in the meat industry and assembles systems of proprietary components.  He asserts that on this basis there was no bona fide intention to use in respect of all or some of the goods specified in the application.

Mr Parkinson goes on to refer to various existing registrations of the trade marks SYTEK, SIGTEC, SCITEC, SEA-TEX, SYSTEC, SCI-TEX, AUSTEK, SUNTEK, POSTEC, QUESTEK, MOSTEK, STANTEC and particularly ASTEC, which he argues are deceptively similar to the applicant's mark.

The opponent does not give any indication of sales or reputation under its own SARTEK mark, and the date on which use commenced is not given in the evidence in support.

Mr Novotny is a former employee of the applicant.  He was responsible for the manufacture and assembly of the goods sold by the applicant.  He declares that in the time of his employment, and subsequently, he is unaware of the use of SASTEK on any of the goods sold by the applicant.  Mr Novotny left the applicant in March 1986.

Applicant's evidence in Answer
This is primarily contained in the declaration of Bruce Williams, who declares that the trade mark was coined from an earlier one (SAS).  This latter is a set of initials used by other traders and which has unpopular or confusing overtones in some developing foreign markets. 

Sales under the SASTEK trade mark commenced in January 1989, and over 4 million dollars of processing and packaging equipment has been sold since that time.  The trade mark is declared (and in some instances shown) to be applied to the applicant's goods on metal labels, computer terminal overlays, directly to printed circuit boards and on the cartons of consumable items to be used with the applicant's goods.  The sale of consumables alone is extensive, with over 2 million dollars worth (total) being sold in the two years 1989 and 1990.

It seems fair to say that the applicant's customers are in the slaughtering and meat processing industries.  Within that limit, however, the applicant sells a diverse range of computer soft and hardware, scanners, labelling devices and weighbridges.

The applicant has declared that there have been actual instances of confusion between its business and that of the opponent.  There appear to have been errors in the delivery and invoicing of goods and in telephone enquiries.  The applicant had raised with the opponent the possibility that their marks are too close.

Supporting Mr Williams' declaration are those of 11 people of experience in the slaughtering or meat processing industry, and one from one of the applicant's suppliers.  All are unaware of any of the other trade marks relied on by the opponent but have heard of the applicant's SASTEK goods for a period of years.

The applicant has included one of the opponent's price lists (July to December 1991) for electronic weighing equipment, sold through its Barlo division, to illustrate the similarity of the applicant's and opponent's goods.

Opponent's evidence in reply
The opponent's declarant, Mr Parkinson, declares that his company has used the name SARTEK since 1989, although when in that year he does not say.  The opponent sells or has sold weighing apparatus, liquid level control apparatus and other monitoring and control apparatus.  He states that the part of the business that produced the catalogue relied on by the applicant has been sold and that weighing apparatus is not presently sold in association with the name SARTEK.  His concern is that, while there is not now a conflict, there would be deception or confusion in the marketplace if the applicant's actual use grew to encompass all of the goods presently specified. 

Paradoxically, he has attempted to explain away the present instances of confusion between SASTEK and SARTEK, saying that they arise because the two firms are listed in the same column of the telephone directory and use a common freight company.  The telephone errors, he argues, may be a result of poor eyesight.  The freight handling errors are no more significant than any other wrong delivery (and he refers to two such, with the correct recipient having a name very unlike his own company) made inexplicably.

Decision

Section 40.
Intention to use. 
The argument that a trade applicant could not possibly have an intention to use a mark for the broad range of goods covered by an application is not new.  It was dealt with recently by Hearing Officer Homann in the opposition by John Coyne to an application by Titan Manufacturing Company (the TITAN case), 1991 AIPC 90-808. That application was made in respect of all goods in class 6.

Mr Homann noted that a claim to the proprietorship of a mark in relation to goods on which the mark has yet to be used can only arise if the applicant had (at the time of lodgement) a "resolve and settled purpose" to use the mark on those goods in the future.  He further held that a statement of such intention made under trade mark regulation 8 was prima facie evidence of such an intent and that if this claim to proprietorship was to be displaced then there was an onus on the opponent to provide some evidence of a lack of intention.  The fact that the scope of the application was wide - as is the present one - did not alter this.

In the present instance, I think there is a very good reason why the applicant may not have broadened its use of the mark beyond the present range of goods sold to customers in the meat processing industry.  The evidence shows that the applicant has been aware of the opponent's SARTEK products for some time, and it would have been foolish for it to have extended from its present field of interest into areas where conflict may be more likely, without the protection of a certificate of registration.

There is no evidence that the present applicant did not have the requisite intention to use the mark in respect of some or all of the other goods claimed when the application was filed.  There is evidence that the applicant's present customers are confined to the meat processing industry, but beyond this there is no more than Mr Pizzey's assertion that it would be impossible for such a trader to have an intention to trade in all the diverse goods in class 9.  I note the force of the argument that there may not be any company on Earth that has an absolutely clear resolution to produce all the goods in class 9, but the applicant has asserted that it is such a one.  At the end of the day it is for the opponent to produce evidence to gainsay the statement of intention to use, not for the Registrar to conduct an item by item investigation of the statement of goods (TITAN, supra).  If the application proceeds, section 23 will allow the areas where the mark has been used to be tested and defined.

The opponent's second line of attack on the proprietorship question is that the applicant's claim is defective because of prior use by another.  On that subject, McGarvie J said in Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd (10 IPR 402 at 413):

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.

Put simply, the first user of the mark in Australia becomes the proprietor at common law.  The opponent relies under this heading on the prior registration of the trade mark ASTEC, but there is in the first instance no evidence that that mark has been used as a trade mark in this country.  Even if that did not immediately collapse the opponent's argument, the two marks which it says are competing for the same proprietorship claim are no closer than ZOOPER DOOPER and DOOPA, considered in Tavefar v Life Savers 12 IPR 159, and are definitely not of the same order of closeness as POLYKIN and POLYKEN, Kendall Co v Mulsyn 109 CLR 300.

The applicant relied on Jose v Karu (1991) AIPC 90-844, as suggesting that proprietorship is defeated only by use of an identical or almost identical mark, but as that decision is under appeal I can give it no great weight. It is however a conclusion with which I agree, and I do not accept that use of ASTEC would defeat the applicant's claim to proprietorship of SASTEK. Nor do I accept that the applicant's claim is defeated by use of SARTEK, though again the opponent's claim is fatally flawed by the lack of any evidence of use prior to the date of the present application.

I dismiss the opposition as it arises under the heading of lack of proprietorship. 

Section 33.
The applicant has argued that I cannot consider any ground under section 33, as no such ground was specified in the Notice of Opposition.  However, the ground was clearly present in the opponent's evidence, and section 50(2) states that "In determining the opposition the Registrar may take into account a ground of opposition whether relied on by the opponent or not". 

The applicant has had more than ample opportunity to see and deal with the case against it under section 33, and I will deal with it at this time.  If the applicant had not had such an opportunity it would still be open to me to consider the question, to withdraw acceptance (section 44(3) of the Act) if that seemed appropriate, and to remit the application to an examiner for further review.  See the Trade Mark Examiners' Manual Chapter 9.14.

Section 33(1) of the act provides that:

33. (1) 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.

None of the prior applications relied on by the opponent, with the possible exception of ASTEC, is sufficiently close to cause problems when I allow for the fact that the suffixes TEK and TEC are common to the trade. 

It was on the mark ASTEC, registered as number 395729 as of 18.8.83 that the attorneys for both sides focussed at the hearing.  That registration stands in the name of Astec International Ltd, for "electronic goods and components".  As the mark appears on the register page it has above it a zig-zag pattern, but as it will for nearly all practical purposes be referred to and recalled by the word component I will give no great weight to the device portion when comparing the competing trade marks.

Mr Pizzey drew my attention to the following proposition from Sym Choon v Gordon Choon 80 CLR 65, at 78 :

The basic principal is that the proposed mark must be so unlike the rival mark that it is not reasonably probable that a purchaser who knows of the latter and has an imperfect recollection of it is likely to be confused.

On behalf of the opponent he noted, as per Farwell J. in the ERECTIKO case 52 RPC 136 at 153, that the possibility of confusion is very much greater when the words are invented words; though I think that argument is strongest when confined to polysyllabic invented words.

He reminded me too that in RYSTA case (60 RPC 87 at 108) it is noted that:

The answer to the question of whether the sound of one word resembles too nearly the sound of another ... must nearly always depend on the first impression, for obviously a person who is familiar with both words will neither be deceived nor confused.  It is the person who only knows the one word, and has perhaps an imperfect recollection of it who is likely to be deceived.  Little assistance therefore is to be obtained from a meticulous comparison of the two words, letter by letter and syllable by syllable, pronounced with the clarity to be expected from a teacher of elocution.

In the present instance, Mr Pizzey argued that there were two competing trade marks presenting similar impressions of the syllable "as" followed by the familiar ending "tec" or "tek".  Given the multiplicity of such "tec/k" marks it would be impossible for traders to keep track of them all, and deception or confusion became inevitable.

On the other hand Mr Anese argued that the primary emphasis should be on the visual appearance and that the question of sound is becoming of diminishing importance (Hamish Robertson and Co's application 13 IPR 69). Visual differences should, he argued, carry great weight where the goods are sold with the mark clearly displayed, as they did in Deeko Australia v Decor Corp 1988 AIPC 90-479.

He also referred me to TITAN, supra, where that mark was found able to coexist with TYTON, and to the case of Dransfield v Action Trampolines (1991 AIPC 90-731).

Mr Anese argued that the ASTEC mark would recall, or at least carry some association with, the name of the Aztec Indians, being thus clearly distinguishable from SASTEK, both to the eye and to the ear.  Mr Pizzey was critical of this argument on the basis that Aztec was a known word where Astec was a coined one, unlikely to be accepted as the correct spelling of the name of the Indian tribe.  None the less, I think Mr Anese made a fair point, and irrespective of the correct spelling or otherwise of the word Aztec by those encountering the word Astec, there will in many minds be a subtle linking of the two.  Either way, I am satisfied that the two marks will not prove deceptively similar when in printed or written form.

I agree that in many areas the sound of marks is losing significance in deciding the question of deceptive similarity, (Taiwan Yamani v Giorgio Armani, 17 IPR 92). These are in the first instance areas where the goods are on public display; supermarket and department store lines and the like.

The applicant's goods of present use, and presumably many others in class 9, are not sold in this way and must at times be ordered.  I note for instance that various pages of one of the opponent's catalogues, tendered by the applicant, have the footnote "all items marked * are preferred lines, normally (my emphasis) available ex-stock".  This makes it clear that even the preferred lines are not always available and that the other lines (and these are more numerous) are not necessarily held in stock.  Although orders for such lines may perhaps be placed by phone, there is no evidence that this is the normal way that these specialist and sophisticated goods are ordered.  Written contracts, technical specifications and orders of precise requirements by facsimile transmission are in my view more likely than simple one-off telephone orders.  The buyers of elaborate meat processing and other class 9 items, on order and in the absence of the goods, must be given more credit for care and attention than is expended on the purchase of a bag of sweets, and while the matter approaches a close balanced it can still be resolved in the applicant's favour. 

I find that no objection to registration exists under section 33 of the Act. 

Section 28
The opponent, if it is to succeed under this heading, must first establish that there was a conflicting reputation, at the date of this application, such that use of the applicant's mark would be reasonably likely to lead to deception or confusion.  This is so irrespective of any interpretation of the High Court decision in New South Wales Dairy Corporation v Murray Goulburn Co-operative Limited 18 IPR 385.

There is an evidentiary onus on an opponent to show positively that such a reputation exists, even though the ultimate onus of establishing registrability is at all times on the applicant (Arthur Fairest's Application 68 RPC 197 at 207). Since the application was made on 31.1.89 and the opponent has failed to state when in that year it even commenced to use its mark, I cannot come to any answer on the question of law hinging on the extent of the opponent's reputation at the critical date.

Similarly, there is no evidence of the use of any of the other trade marks said to be too close to the applicant's.  Section 28 depends on evidence or on self evident facts of which I can properly take notice, and the simple act of registering a trade mark does not trigger the action of section 28(a) in the first instance.  The opponent's case under section 28 must fail. 
Conclusion
The opponent has not established that any objection to registration exists.  I dismiss the opposition and direct that the application proceed to registration.

This raises the question of costs.  The opponent has submitted that the applicant has made complaints, and asserted rights which are not even yet seen to exist since the application has yet to be registered.  The opponent argues that it was these threats which forced it into opposing this application in the first place.  That is no doubt true, but the opponent has failed to achieve its goal, irrespective of its motives, and I award costs in accord with the scale to the applicant.

T. Williams

Hearing Officer
7 January 1993