Schering-Plough Healthcare Products, Inc v Nu Skin International, Inc

[1999] ATMO 110

TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF
TRADE MARKS, WITH REASONS

Re:Opposition by SCHERING-PLOUGH HEALTHCARE PRODUCTS, INC to the registration of trade mark application number 673047 in the name of NU SKIN INTERNATIONAL, INC.

Background:
The Trade Marks Office has examined application 673047 and accepted it for registration.  The applicant is Nu Skin International, Inc., which I will refer to simply as “the applicant” from this point.

The application was filed in class 5 on 20 September 1995, in respect of goods that now stand as: "Cosmetic preparations, namely foundation make-up".  I will mention, for the sake of completeness, that the mark originally specified in the application was MOISTURESHADE.  The mark has since been amended to MOISTURSHADE.

Schering-Plough HealthCare Products, Inc ("the opponent") sells sunscreen lotion under the trade mark SHADE.  It has opposed registration of the application, on what has come down to two grounds.  These are that:

• the application is too close to the opponent's own registered trade marks

• the use of the trade mark by the applicant would lead to deception or confusion in view of the prior reputation in the opponent's trade mark.

The opposition has followed the course set out in the regulations.  It came on for hearing by me as a delegate of the Registrar of Trade Marks.  At that hearing, the applicant was represented by Andrew Bouris, special advisory counsel of Mallesons Stephen Jaques, solicitors.  Brian Munday, patent attorney of the attorney firm of Spruson and Ferguson, Sydney, represented the opponent.

Evidence:
Both sides have served, and rely upon, evidence.  The details of the relevant declarations can be summarised as follows:
Opponent's evidence in support:
• Brian Munday, patent attorney
• Owen Bradbury.  Mr Bradbury is the Systems Accountant of Wella Australia, which is authorised to use the opponent's trade mark in Australia.

Applicant's evidence in answer:
• David McManus, General Manager of Nu Skin Australia, a wholly owned subsidiary of the applicant.  His company distributes the applicant's goods in this country.

Issues and discussion
Preliminary - the amendment matter
Mr Munday began by pointing to what he said was a difficulty created by the amendment of the trade mark applied for.  He agreed that the amendment was allowable in terms of s 65 and I will not go into the terms of this.  However, both applicant and opponent agree that the rights of the parties are to be determined at the priority date.  According to Mr Munday, this translates into a need to determine if the mark, in the form then sought to be registered, can be registered.  I told the parties at the hearing that I did not agree with this and I will now set down my reasons for saying so.

It seems to me that, in terms of s 55, I must decide if the mark now specified in the application is to be registered.  The fact that the applicant originally specified a different trade mark does not matter.  Nor does the fact that the strict terms of s 65 mean that any amendment of this mark is necessarily going to be minor.  My inquiry is clear.  It is this: is the current mark, the one before me now, one that the applicant was entitled to register at the priority date of the opposed application?

Mr Munday argued that this would make the amendment retrospective, since under s 72 the registration, if granted, is taken to have had effect from and including the filing date.  I do not agree, though the point is a moot one.  Section 72 has not yet commenced to act.  Registration, if granted, will only then be retrospective.  True, it will be the amended form of the mark that will then be registered.  If the result is that, paradoxically, an amendment that is not retrospective comes to have retrospective effect immediately on the issuance of a registration, that is simply a consequence of the scheme of the legislation.

Section 44- conflicting registrations?
Such a situation is controlled initially by s 44(1), which reads:

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.  A trade mark is deceptively similar to another if the resemblance is such as to be likely to deceive or cause confusion.

Note 2:  For similar goods see subsection 14(1).  Similar goods are either the same goods or, in terms of earlier case law, goods of the same description.
Note 3:  For priority date see section 12.  For present purposes, the application's priority date, 20 September 1995, is not earlier than the registrations in question.

The registrations on which the opponent relies are:
SHADE:

• in class 3 for: Suntan lotions for preventing, inhibiting or soothing sunburn and lotions to induce and control suntan but not including any toilet or cosmetic preparation in the nature of make-up.  The relevant trade mark numbers are 176700 and 655180.

• in class 5 for: Preparations for preventing, controlling or soothing sunburn or suntan but excluding material in the nature of therapeutical make-up other than that for inducing and removing suntan.  The relevant trade mark number is 176601.

SUPERSHADE:

• in class 3 for: Suntan and suncream preparations for personal use but not including any toilet or cosmetic preparations in the nature of make-up.  The relevant trade mark number is 312566.

Both representatives put argument to me with a view to the question of deceptive similarity, or otherwise, between the applicant's mark MOISTURSHADE and any of the opponent's registrations.

Mr Bouris made reference to the long-established law as set out in, for example, Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd, (1963) 109 CLR 407, and Australian Woollen Mills v F S Walton & Co Ltd, (1937) 58 CLR 641. The position is much as it was summed up by Parker J in 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.

However, one rider needs to be added in translating these provisions to an opposition under the 1995 act.  This is that, under the current legislation, s 44 is subject to s 33.  The initial position under s 44 is that the registrar "would need to be satisfied that there was a reasonable likelihood of deception or confusion before denying acceptance of the application for registration."  (See French and Tamberlin JJ, Registrar of Trade Marks v Woolworths, [1999] FCA 1020 at 45. Since the opponent is required, under s 55, to "establish" a ground of opposition, it seems that now, as in examination, I must be satisfied that the necessary level of potential risk exists. If I am not so satisfied, the application should continue to go forward.

With that principle in mind, I turn to the arguments of the parties.

Mr Munday conceded that the competing marks are not substantially identical.  The opponent's case, under s 44, therefore hinges initially on deceptive similarity.  Mr Munday relied on a number of cases where one mark was contained within another: SITMAR'S FUNSHIP/FUNSHIP, MOUTON CADET/CADET, HYPERPAN/PAN,
NEW ERA/ERA, OLIN PACE/PACE[1].  Mr Munday noted that, in each instance, the marks had been found deceptively similar.  He argued that the case of MOISTURSHADE/SHADE was comparable, and that goods sold under the applicant's mark are likely to be seen as "an extension of the opponent's SHADE and SUPERSHADE family of products.

[1] See, respectively: Carnival Cruise Lines Inc v Sitmar Cruises Ltd 31 IPR 375, Baron Phillipe de Rothchild SA trade mark IPD 10096, John Fitton & Co's application (1949) 66RPC 110, Kodak (A/Asia) Pty Ltd's application (1936) AOJP 1724, Arendsen's application (1932) AOJP 433, Olin Corp v Pacemaker Pool Supplies (1984) AIPC 93-216.

On that aspect, the asserted family of products, I put it to Mr Munday that there was no evidence of any such family, since there was no evidence that the trade mark SUPERSHADE has ever been used.  As D R Shanahan notes at p 182 of Australian Law of Trade Marks and Passing Off:

It has been said, however, that the distinguishing character of the common element is achieved by its use in the series so that the objection is based properly on user rather than on the existence of registrations for the marks in question. 

On that basis, the relevant comparison under s 44 is between the applicant's mark and either one of the opponent's marks, taken one at a time.  Without evidence of use of SUPERSHADE, I refuse to consider the question in terms of some sort of notional series of marks.  That approach was adopted in the UK by Mr Myall of the UK Registry.  See SEMIGRES trade mark [1979] RPC 330, and the other UK cases referred to in Dow Chemical Co v C H Boehringer Sohn KG (1987) IPR 360.

Mr Bouris, for his part, conceded that the examples relied on by Mr Munday were illustrative of a principle.  However, he argued that the principle here did not operate against the applicant.  The focus in the applicant's mark was on the element MOISTUR, a notable element when added to the not particularly distinctive element SHADE.  While it was clear that, for example, SHADE and SUPERSHADE could not coexist in different hands, the differences here, in the totalities of the marks, would prevent deception and confusion.  The totalities of the marks had to be considered, he argued.  Thus, HYPERTEC had been allowed to coexist with TEC[2], and EUROVOGUE with VOGUE.  He noted my comment, in Cardy v Sony Music Entertainment Inc (1996) AIPC 91-280, that, if the refusal of BUBBLE UP in the face of UP[3] was correct, it was a decision on its own facts and merits.

[2] Hypertec Pty Ltd v Kabushiki Kaisha Tec (also t/a Tec Corporation) (1996) AIPC 91-245; Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR

[3] Seven Up Co v Bubble Up Co Inc (1987) AIPC 90-433

Mr Munday's reply was that the element MOISTUR would call attention to an apparent indication that these were a moisturising version of the SHADE or SUPERSHADE marks.  The "borrowed" element, he said, was the strong and memorable element SHADE.  It was not amenable to slurring.  He therefore distinguished the facts of this case from those at issue in London Lubricants (1920) Ltd's Application, (1925) 42 RPC 264. This simple rule, that endings are slurred and first syllables therefore accentuated, Mr Munday argued, is not sufficiently subtle as to be reliable in cases like this. Here, the common element is an English word in its own right, albeit misspelled. This case is thus unlike CASTROL/TRIPCASTROID, at issue in London Lubricants, supra, or MOREX/REX or VIVICILLIN/CYLLIN[4] and similar cases.  Mr Munday argued that the distinguishing features here are not marked and striking elements.  They could not be compared, he said, to MASTER and KING, at issue in Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536.

[4] Darwin's Ltd's application (1946) 59 RPC 127; Enoch's application, (1947) 64 RPC 119

In Mr Munday's view, the element MOISTUR is descriptive and SHADE would be given its full weight in both marks, being used to show a sub-category, exactly the situation with FUNSHIP/ SITMAR'S FUNSHIP, see Carnival Cruise Lines, Inc v Sitmar Cruises Ltd 31 IPR 375.

The applicant's evidence is relevant at this point.  It shows the details of three trade mark registrations in class 3.  Two of these, AUSSIE SHADES and SHADES EQ, are registered for cosmetics and hair preparations, respectively.  In both instances, the element SHADES has been disclaimed.  This has been done by two endorsements that read, respectively:

Registration of this trade mark shall give no right to the separate exclusive use of the words AUSSIE and SHADES,            and

Registration of this trade mark shall give no right to the separate exclusive use of the word SHADES and the letters EQ.

The fact that the same logic was not applied to registration of the trade mark SOLAR SHADES, for sun creams, simply shows that the imposition of disclaimers under the former legislation was not always amenable to rigorous scientific method.  It follows that the state of the register cannot, in this case, be used to verify Mr Bouris's argument that the word "shade", as part of a more complex mark, was not necessarily distinctive.

However, be the disclaimers as they may, the ultimate question is a fairly simple one: what will people in the market make of the fact that SHADE occurs in the applicant's trade mark, looking at the entire matter in terms of Pianotist, supra.

One of the surrounding circumstances, relevant to the likelihood of confusion, is the nature of the goods in question.  Obviously, I will have to return to this question if I am to decide that the goods are "similar" in terms of s 44.  However, the extent to which they are similar is something that needs to be looked atnow also.  It may act to reduce or prevent deception or confusion.  Mr Munday's argument that the applicant's goods will be seen as a "sub-category" of the opponent's is predicated on the issue.  His argument may well founder, depending on how those who encounter such goods, and know of either of the registered trade marks, react to the difference (or otherwise) between the marks in the light of the natures of the goods covered by the registered marks and the application.  

At the outset, I note the Oxford Dictionary on the subject of the meaning of "foundation" in relation to make-up: "A base for cosmetics. Used esp. attrib., as foundation cream, lotion, make-up".   The following are two of several examples given:

1911 G. S. Porter Harvester xiii. 279 She found a box of cream and rubbed it on for a foundation. Then she opened some pink powder, and carefully dusted her cheeks.
1952 C. W. Cunnington Eng. Women’s Clothing viii. 265 Starting with foundation lotion over cherry-coloured cream rouge..this is followed by cameo powder and cherry lipstick.

The opponent's registrations, on the other hand, exclude make-up from the scope of the registrations in both class 3 and class 5.

Mr Bouris argued that weight should be given to the fact that the applicant's goods were limited.  The evidence shows use on creams, and on powder that can be used dry or moistened, and these uses appear to be within the scope of the application.  These are useful for illustrative purposes only as, strictly speaking, they are after the filing date of the opposed application and cannot affect the rights of the parties, as Mr Munday noted.

Mr Bouris referred to the statutory regime for therapeutic goods.  Under this, he said, certain sunscreens are subject to additional control because of their powerful nature.  Cosmetics, he said, were not so regulated.  While this entire matter is outside the evidence, what he says seems reasonable and I will allow for it, as far as it goes.  That, however, is not very far.

The matter does not in my view turn on what may be somewhat arbitrary lines beyond which a cosmetic becomes a sunscreen, or on whether a foundation make-up may serve in "preventing, inhibiting or soothing sunburn".  Ultimately, the goods are fairly close in nature, uses and trade channels.  Equally, there is evidence that make-up and skin moisturisers with a sunscreen function are common enough.  In practical terms, however, the goods can still be distinguished.  As Mr Bouris argued, even when the two lines are sold in the same supermarkets, they are not normally sold in the same area of the store.

Accordingly, for all that the goods specified for the two competing lines are close, and almost overlap at the margins, in practice the relevant goods are not the same and are not seen to be used or sold in the same ways.  Mr Munday's speculation that a foundation make-up may serve as a moisturising sunscreen, or vice versa, is not supported by anything in the evidence.  It appears that the two lines are separated, even though make-up is now being given sun-screening attributes.  Beyond that, though perhaps one can use a sunscreen as a make-up base, that is not its obvious or intended use.  Nor is it usual to use make-up over the larger areas of the body normally covered by sunscreens, even allowing for the possibility of doing so to hide scars or blemishes.  There seems to me to be, overall, a practical difference that will, I think, assist the marks' coexistence.  Though I do not weigh that distinction in itself as decisive, it is part of the background of the comparison of the marks themselves.

Where the argument resolves is on a practical point.  As the High Court said in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 608, "it may be of importance to see whether the registered mark is general or special in character". Here, the registered mark is the word SHADE or SUPERSHADE as the case may be. "Shade" is an ordinary word, meaning, among other things:

Degree of darkness or depth of colour; hence, any of the many minutely differing varieties of quality that may exist in what is broadly considered as one and the same colour; a tint.  (Oxford Dictionary).

As Mr Munday has argued, the element MOISTUR is equally susceptible to such analysis.  However, to the eye and the ear, the marks are clearly distinguishable.  Any deception or confusion will therefore be the result of a deliberate assumption, on the part of those encountering the applicant's trade mark, that the common element SHADE denotes a common proprietor.  This, in relation to make-up, is simply speculation and, in my view, not a reasonably likely speculation. 

On such goods, more so than for sunscreens, the word "shade" is primarily descriptive.  The matter is not clear-cut, but I do not think that I should hold the objection established when it is based so largely on questionable speculations about what might be made of the shared use of the word SHADE. 

In saying this, I do not lose sight of the fact that the element MOISTUR will readily be seen as having a descriptive significance.  However, the focus must remain on what ordinary buyers will make of the concurrent use of the other element in the applicant's mark.  I find that there will be no reasonable basis for a speculation that it indicates a common trade source with the SHADE suntanning lotions and sunburn medications.  Therefore, I do not find the mark MOISTURSHADE, on the goods in question, to be deceptively similar to SHADE.  Nor, for the same reasons, is MOISTURSHADE deceptively similar to SUPERSHADE.

That being so, the opponent has failed to establish a ground under s 44.  While that ends this issue, I will say for the sake of completeness that my decision is that the goods in question are of the same description, hence "similar goods" for the purposes of ss 14(1) and 44.

Section 60 - conflicting reputations
The opponent relies, under this heading, on its trade mark SHADE, used with the house mark COPPERTONE in respect of "moisturising sunscreen lotions.  In the interest of brevity, I will not set s60 down in full.  The primary question under s 60 is this:  "was there a deceptively similar trade mark in existence at the priority date?"

I have already found, under s 44, that the trade mark SHADE, if used for goods within the scope of the opponent's trade mark registrations, is not deceptively similar to MOISTURSHADE.  That finding must carry over to the critical question under s 60.  I must, that being so, find that the ground relied on under s 60 has not been established.

Nor, lest this matter go on appeal, am I satisfied that the opponent has established a ground of opposition under s 43, a provision closely related to s 60.  The reason for this is similar to the reason that I have given under s 44: the different marks, when seen in the light of the differences in the goods, will not reasonably be likely to lead to deception or confusion.

Conclusion
The opponent has not established any ground of opposition and I can see no reason why registration should not proceed.  Subject to any appeal from this decision, I direct that the application be registered.

As the applicant has been successful, I award it costs in accord with the official scale.  If necessary, on payment of the appropriate fee, those costs will be taxed, allowed and certified by an officer of the Trade Marks Office.

T. E. Williams
Hearing Officer
29 October 1999.