Shirtmaster Pty Ltd v Eton Systems AB

[1994] ATMO 94

TRADE MARKS ACT 1955

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

Re:Opposition by ETON SYSTEMS AB to registration of trade mark application number 535095 in the name of SHIRTMASTER PTY LTD

Background
Application number 535095 was lodged, on 28 May 1990, in the name of SHIRTMASTER PTY LTD (the applicant).  The application was for registration of the mark as shown below and was advertised as accepted in the Official Journal, of 21 January 1993, for a statement of goods subsequently amended to read, "shirts" in Class 25.

Notice of opposition to the mark's registration was lodged on 20 April 1993 by ETON SYSTEMS AB (the opponent).  There were various grounds stated in the notice but those which the supporting evidence went towards, and which were later pursued in depth at the hearing, can be summarised as relating to: s.40 of the Act, that the applicant was not the proprietor of the trade mark; under s.28, that the mark's use by the applicant would be likely to deceive or cause confusion, and that its use would be contrary to law and not be entitled to protection in a court of justice; and under s.24, that the mark was not distinctive, nor capable of becoming distinctive, of the applicant's goods.

The evidence
The service and lodgment of the opponent's and applicant's respective evidence in support, answer and reply in the matter was completed by 8 July 1994.  This evidence comprised:

Evidence in support

Statutory declaration by Brian Marsden Munday dated 19 July 1993 and Annexures A and B.

Statutory declaration by Peter Cumming dated 14 July 1993 and Exhibits PC-1 and PC-2 (first Cumming declaration).

Statutory declaration by Angus J.G. MacDonald dated 16 July 1993 and Exhibits AJGM-1 to AJGM-4.

Statutory declaration by Peter Cumming dated 2 December 1993 and Exhibits PC2-1 to PC2-3 (second Cumming declaration)

Evidence in answer

Statutory declaration by Dean Zung Pao Chow dated 7 March 1994 and Exhibits DC-1 to DC-5

Evidence in reply

Statutory declaration by Peter Cumming dated 27 June 1994 and Exhibit PC3-1 (third Cumming declaration)

The essential features of the opponent's and applicant's evidence were as follows.

In the evidence in support, Mr Munday, in his declaration, stated that the applicant had requested expedition of the examination of its application, annexing a copy of the request.  Mr Munday also annexed a statutory declaration by a Peter McHarg, the Marketing Manager of the applicant, which had been lodged as evidence in support of registration and which gave the history and details of use on the subject and related marks.  Also annexed were company extracts of Shirtmaster Pty Ltd, Oriental Textiles (Australia) Pty Ltd and Oriental Textiles Proprietary Limited obtained from the Australian Securities Commission.  The first Cumming declaration gave the history of the opposition and also details of a meeting between Mr Cumming, the Australian representative of the opponent, and Mr Dean Chow, the Managing Director of the applicant and other companies.  Mr MacDonald's declaration described how, in his capacity as Managing Director of Fairmark Pty Ltd (Fairmark), he met Jan Smedmyr, Chief Executive Officer of the opponent, in 1989 when they discussed the possibilities of a business deal between the companies.  He annexed brochures and a shirt made by the opponent, and also correspondence between the companies.  In the second Cumming declaration, the declarant described the history of the opponent company and its manufacture of shirts and then the handling systems and work stations to manufacture them.  He described how these work stations were sold and distributed in Australia since 1982, annexing advertisements and articles in Australian and international trade magazines featuring the "Eton" work stations and shirts.

In the evidence in answer, Mr Dean Chow's declaration described the Australian shirt manufacturing industry and how his companies manufactured shirts using the opponent's work stations since around 1982.  He described how he selected the trade mark ETON and how some negotiations had taken place between the parties with respect to a possible working relationship.  This business relationship did not eventuate.  He annexed to his declaration various pieces of correspondence between himself and the opponent regarding the negotiations.

Mr Cumming, in his third declaration, disputed several of the claims made by Mr Chow in the evidence in answer, putting instead a contrary version of the events which occurred between the parties.  He further described the opponent's international activities with respect to the manufacture of shirts.

On 21 July 1994, the opponent sought a hearing and the matter was set down before me, as the Registrar's delegate, in Canberra on 24 August 1994.  The opponent was represented at the hearing by Ms Julia Baird of Counsel, instructed by Dr Brian Munday of Spruson & Ferguson.  Appearing on behalf of the applicant was Mr Glenn McGowan of Counsel instructed by Mr John Gibbs of Phillips Ormonde & Fitzpatrick.

The hearing went ahead on the day and date appointed, and I will summarise what I consider to be the main points made in the extensive submissions by both parties before discussing the matter and giving my final decision.

Submissions

Ms Baird, on behalf of the opponent, said that the points which she would be concentrating on in her submissions were based on s.40 of the Act, on the grounds that her client disputed the applicant's proprietorship of the mark, and on s.28 that there was a real likelihood of deception and confusion if the mark was registered.

In relation to the proprietorship matter under s.40, Ms Baird said that it is well established that it is the first person who uses a mark in Australia who is the proprietor - Shell Company (Australia) Limited v Rohm and Haas Co (1949) 78 CLR 601. She said that the applicant had not used the subject mark in Australia prior to application and the question was whether there was any user of the mark in Australia by any other person before this date. She said the attempt by one trader to appropriate the mark of a foreign trader was frowned upon by the courts and they therefore seized upon a small amount of use by the foreign trader to decide ownership on behalf of that entity - Seven Up Co v O.T. Ltd (1947) 75 CLR 203. There was substantial identity between the present mark and the trade marks of the opponent and its associated company, Eton AB. The distinctive element in all cases was the word ETON, the non-distinctive word CREATION being disclaimed in the mark under dispute. She said that the similarity of the present mark to the opponent's own mark, contained in brochures given to Mr MacDonald by Mr Smedmyr in 1989, raised an inference of deliberate appropriation.

The use in 1989 by the opponent and its related company, in Australia before and during negotiations for proposed business venture with Mr MacDonald's company, was with respect to shirts, the same goods for which the applicant now sought registration.  This use included the incorporation of the mark in brochures and catalogues at a trade exhibition at Darling Harbour in Sydney, and use in correspondence with Fairmark's Mr MacDonald, on two separate packages of sample shirts, invoices and packaging in relation to the negotiations with the local company to import the opponent's shirts for sale into Australia or enter into licensing arrangements.  She referred for support here to Thunderbird Products Corp v Thunderbird Marine Products Pty Limited 131 CLR 592 and Sizzler Restaurants International Inc v Sabra International Pty Ltd (1990-1991) 20 IPR 331. The decision not to proceed with such an arrangement had been made by Mr MacDonald's company and not the opponent. This, she said, was an offer by the opponent to trade in shirts and constituted use which was within the scope of trade mark use as interpreted in ss.6(1) and was use in physical or other relation to the goods within ss.6(2) and s.107 - Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495. Ms Baird said further that the use of the mark ETON on the work stations sold in Australia by the opponent company since 1982 was use on goods closely associated with the present mark's goods.

Ms Baird said that it was important to note that the position with respect to the proprietorship of the mark should be assessed as at the date of application - Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 - and any matters raised in the applicant's evidence after that date was therefore not relevant to such proceedings. She said that there were two related companies, Eton Systems AB and Eton Fashion AB which comprised the Eton group of companies opposed to the registration of the present mark. It was immaterial which part of this group had first used the mark in Australia. It was only relevant to the proceedings under s.40 that, on the appropriate date, the applicant was not the proprietor of the mark. The applicant had an onus to prove it was, in fact, the proprietor but it had not discharged this at all.

With respect to the opposition as it was based on s.28, that registration of the mark would lead to deception and confusion, Ms Baird said that, as per Kitto J in Southern Cross, supra, the onus was on the applicant to show that there was no reasonable possibility of deception and confusion if the mark was registered; that it was not necessary to prove that there was an actual probability of such deception leading to passing off; that all the surrounding circumstances should be taken into consideration in determining the matter; that the rights of the parties should be determined as at the date of application; and that the onus must be discharged by the applicant in respect of all the goods included in the specification.

She said that the relevant persons who could be confused included all those who could possibly be involved in the purchasing of shirts, which were the goods in question.  The inquiry under s.28 was not limited to an inquiry as to conflicting trade mark usage but was wide enough to catch any other form of deception or confusion likely to arise from the use of the trade mark.  She said the opponent had an established reputation for shirt making systems in Australia.  The opponent's own mark was used in at least eight different countries on the machinery and also on shirts.  The MacDonald declaration showed that it also had some reputation for shirts in this country.  The public would know of the practice of licensing trade marks and assume that, because of the wide sales of the ETON shirt making systems, the shirts sold under the present mark would have the same source.  In any event, at least three Australian companies, amongst a comparatively small number of manufacturers who exclusively manufactured shirts in this country, had purchased ETON systems - some three million dollars worth - and this reputation had a "slop-over" effect to all shirt manufacturers in the country through sales and advertising campaigns.  In Australian Law of Trade Marks and Passing Off (Second Edition) by D.R.Shanahan at page 167, it was said that goods or services that were not technically of the same description may yet be thought of as associated in some way because of some close trade connection between them - see H.J.Lees & Sons (London) Ltd's Appn (1955) 72 RPC 75 regarding the nexus between carpets and rugs, and textile machinery. Ms Baird said that, in any event, the opponent's sister company had an established overseas reputation for shirts and, because many Australians travelled to these countries, a significant number of people would be confused as to ownership of the present mark in Australia. She said that, as a consequence of the above, the applicant had not discharged the considerable onus which it bore to satisfy the Registrar that deception or confusion would not occur if the mark was registered.

Ms Baird disputed the Registrar's current practice of requiring that blameworthy conduct needs to be shown in addition to deception and confusion.  She cited decisions of Gummow J in Carnival Cruise Lines Inc v Sitmar Cruises Ltd, supra, and Johnson and Johnson Australia Pty Ltd v Kalnin and Anor. (1993) 26 IPR 435, from which she alleged that it could be inferred there was no such requirement when applying s.28(a) at registration stage and in oppositions to registration. However she said that, if such was the case, then such conduct lay in the application for registration of the present mark which was so similar to the opponent's own mark. She said that Mr Chow had unclean hands in his dealings with the opponent as the present application came soon after the installation of one of the opponent's shirt making systems in his own factory and an inference could be drawn from this and from Mr Chow's contacts with the opponent that he was trying to appropriate the opponent's mark. This was particularly so because the application for registration had been made before Mr Chow had sought some sort of deal with the applicant. Because of the foregoing, Ms Baird said that the public interest would best be served by denying registration, as the applicant's activities may constitute a wrong.

On the alleged lack of distinctiveness of the mark in respect of the applicant, Ms Baird said that the opponent's establishment of at least eight garment making systems costing several million dollars in this country meant that the public associated the word ETON with the opponent and not the applicant.  She said that any use by the applicant of the present mark applied to shirts post application date could not displace the objection as it was based on this ground.  Ms Baird said that the Registrar's discretion should be exercised in favour of the opponent as deception and confusion was shown by the evidence to be likely to arise because the public would make the incorrect assumption that the applicant had a licence or approval to use the mark which was quite untrue.

She concluded her submissions by seeking costs in the matter for the opponent.

In reply, Mr McGowan said that the opponent's evidence was confusing and fell short of establishing its case.  He went through the evidence, pointing out what he said were weaknesses and contradictions in the various declarations.  He said that the first Cumming declaration made it clear that the opponent does not make shirts for sale in Australia but is in the business of building and selling garment making systems.  With respect to the alleged negotiations between the applicant and the opponent to form a business arrangement, the correspondence between the parties regarding such an association did not amount to negotiations, was very preliminary and it was clear that neither party was serious in doing business with the other.  Because the applicant did not agree to the opponent's price and proceed in the matter, there had been no offer to trade.

In the matter of the dealings between Fairmark and the opponent, Mr McGowan said that the MacDonald declaration did not provide clear information on the clothing exhibition at Darling Harbour where he met Mr Smedmyr, including whether the public was invited to attend, or why the opponent sent him catalogues for shirts when the goods which were demonstrated there were garment production systems.  The alleged negotiations between the parties regarding sale of the opponent's shirts were also very preliminary and did not indicate use by the opponent of the subject mark at that time.  Further, some of the correspondence filed as evidence by the opponent referred to Eton Fashion AB and not the opponent, Eton Systems AB.  It was therefore not the opponent but another party which was negotiating with Fairmark.  He said that it was wrong for Ms Baird to suggest that a group of companies could equate to one entity in establishing proprietorship.  Further, any shirts that were sent from Sweden were free samples only and any documents included were therefore not invoices.  Mr McGowan said that there had been no export of the opponent's shirts to Australia and the only export of this clothing had been to some countries in Europe.  He said that the only business which the opponent had conducted in Australia had been the supply of garment production systems, which had been to only eight customers in two States.  The sales of these ETON systems were to a restricted clientele and there was a minimal chance of the wider public being deceived or confused by the present mark which the applicant was seeking to have registered for "shirts".  He said that the Chow declaration made it clear that the applicant had captured between five and ten percent of the Australian trade in shirts, concentrating on the middle to upper portion of that market.  In contrast, the opponent had a small reputation as a systems manufacturer but little in the way of shirts sold overseas and none in this country.

Mr McGowan said that the opponent had no interest in selling shirts in Australia.  He said that one of the tests of proprietorship as enunciated in Shell Company (Australia) Limited v Rohm and Haas Co, supra, was an intention to use the mark on the goods concerned.  So far, the applicant had been the only party to show any such intention to sell shirts in the matter.  He said that it was not unlawful to adopt a foreign mark so far unused in Australia, Seven Up Co v O.T. Ltd (1947) 75 CLR 203, and this the applicant had done. It was irrelevant, he said, that the applicant had copied an overseas mark as it was the author and first user of that mark in this country. The opponent had made limited use of an allegedly similar mark on garment systems in Australia but none at all on shirts. In any event, the marks in question were not identical and any prior use of a mark which was not so close as to be virtually the same mark would fail to overturn an application such as the present one. There had been no offer to sell by the opponent in the present case and any advertising in the brochures provided to Mr MacDonald were from a different entity. He referred to the Thunderbird case, supra, where a U.S. company granted a licence, sold a model of the goods and supplied brochures to an applicant.  This meant that there were concrete relations in place between the parties, something which had not occurred in the present instance.  Mr McGowan distinguished the present case from other instances where an overseas entity had been successful against a local applicant by saying that this instance differed on important points.  These included such cases as Anheuser Busch Inc v Castlebrae Pty Ltd and Others 21 IPR 54 where active and extensive marketing on behalf of the overseas owner had occurred; Stylesetter International Co Pty Ltd v Le Sportsac, Inc. 17 IPR 59, where sales by the overseas owner had been made in this country; and Sizzler Restaurants International Inc v Sabra International Pty Ltd (1990-1991) 20 IPR 331, where negotiations to build the restaurants in question had been underway. He said that the matter was more like the case of Moorgate Tobacco Co Ltd v Philip Morris Ltd 3 IPR 545 where "...there was not, at any relevant time, any actual trade or offer to trade in goods bearing the mark in Australia or any existing intention to offer or supply such goods in trade." He said that the reason for the opponent's participation at the Darling Harbour trade fair was to sell its garment making systems and not to sell its sister company's shirts.

Mr McGowan said that the present application was in Part B and therefore use after the date of application was more relevant than that before.  The latter use was, as explained by Mr Shanahan in his book at page 134, important for Part A applications.  The opponent had no reputation at all for shirts in Australia.  Any ETON shirts coming to Australia, for example the samples sent to Mr MacDonald's company, were from its sister company, Eton Fashions AB.  In contrast, the applicant had achieved significant sales in this country and the extent of such use meant that no one would be confused because of the present mark's registration.  He agreed that, to a limited market, the opponent had established a reputation for its machines but he said that there was no "slop-over" of this reputation to shirts.

With respect to the opposition as it was based on the lack of distinctiveness of the mark, he said that, as the application was for Part B of the Register, the applicant only needed to show that the mark was likely to become distinctive.  He said that this had been done and the opponent had done nothing to counter this.

He concluded his submissions by seeking costs in the matter in favour of the applicant.

Discussion

Section 40 - Proprietorship

The provisions of s.40, so far as is relevant here, are that:

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

On that subject, McGarvie J said in Settef, 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.

In other words, the first user of the mark in Australia (for relevant goods and prior to the date of application) becomes the proprietor at common law.  That proprietorship, however, is limited to "the same kind of thing", per Holroyd J in Re Hick's trade mark (1897) 22 VLR 636 at 639. Any small amount of use will suffice, but the effect of the act relied on to constitute use must be the creation in the minds of those concerned of an impression that goods of a particular trader are being offered for sale in Australia. This has been considered in later cases such as Seven Up, supra, where Williams J. said at 211:

But the position is different if at that date the mark has become identified with the goods of the foreign trader in Australia because those goods have been brought into Australia by the foreign trader himself or by some importer or in some other manner.

I am not concerned, in deciding the issue of proprietorship, with the question of whether the opponent's and applicant's marks are so alike as to lead to the deception or confusion of customers.  That question is relevant in relation ss.33 and 28, but not to s.40 which only applies when the marks are identical or so similar as to be virtually the same mark - The Kendall Co v Mulsyn Paint and Chemicals (1962-63) 109 CLR 300; Tavefar Pty Ltd v Life Savers (Australasia) Ltd 12 IPR 159.

It is common ground, I think, that the opponent had used the mark ETON in Australia from the early 1980s on garment making systems.  However, this early use of that word on this machinery does not, in my estimation, amount to use of the subject mark on shirts.  The opponent's mark, ETON, used on the garment making systems, and that of the applicant's, used on shirts, are different to each other, the most obvious change being that the opponent's mark is one word which is different in appearance to the "getup" of the present mark which does include the word ETON but also the word CREATION - albeit a disclaimed particular - and an ellipse surrounding the mark.  The goods on which the respective marks are used are also different.  Although shirts (and other clothing) may be assembled on the opponent's garment systems, they are not the "same kind of thing" as the goods covered by the present specification as referred to in Hick's trade mark, supra.

However, the opponent's associated company Eton Fashions AB (sometimes called Eton of Sweden AB or simply Eton AB) did use the mark, as shown below, in its catalogue which was sent to Mr MacDonald at Fairmark.

I am of the opinion that it is virtually the same mark as the applicant's.  The only differences between the Swedish mark and the present mark are that the non-distinctive words SHIRTS OF QUALITY are included in the former and the ellipse surrounding the words in that mark is a slightly different shape to that in the applicant's mark.  Mr Chow does admit in his declaration that he, "...was fully aware that a company associated with Eton Systems AB was using the trade mark on shirts in Sweden...".  It is therefore quite obvious that the applicant copied the Swedish mark to use in Australia, perhaps believing that it was not presently being used in this country.

I do not think that it matters whether, as argued by Mr McGowan, the present opponent may not be able to claim to be the proprietor of the mark, or whether another company associated with it is the entity more in a position to make that claim.  What I have to decide under s.40 of the Act is whether the applicant is the "author" of the mark for the appropriate goods in this country.  It is immaterial if the mark has been copied from that of a foreign trader.  What matters is whether another trader had already acquired a prior right to the mark through use in Australia - Merv Brown Pty Ltd v David Jones (Aust) Pty Ltd (1987) 73ALR 504 and Saturno's Norwood Hotel Pty Ltd v Potter Family Hotels Pty Ltd (1989) AIPC 90-534. Given this, I think there are two matters which need to be decided in determining the present question of proprietorship. Firstly, was the applicant's use of the mark the first use of the mark in Australia or was another party the first user of the mark here? Secondly, if that party is shown to have used the mark first, was such use in the course of trade?

In determining first use in this country, I have considered the submissions of both attorneys and the evidence lodged on both sides.  The opponent has said that the mark was first used in Australia by Eton AB on shirts in 1989 and submitted copies of correspondence, covering documentation and invoices to show this.  The applicant, on the other hand, has not claimed that it used the mark prior to its application for registration on 28 May 1990.  I have read the correspondence which passed between Mr MacDonald, in his capacity of Managing Director of Fairmark, and the representatives of Eton of Sweden in the last half of 1989 and in early 1990.  It would appear to me that the Swedish company was keen to sell in Australia and sent two sets of sample shirts to Fairmark to allow that company to do costing and to test the market.  It was therefore making an offer to trade in those goods.  These actions apparently led to nought because of various factors but I think that both parties were serious in their original intention of uniting to sell the Swedish ETON shirts in this country.  I believe that the evidence shows that the reason that the negotiations broke down between Fairmark and Eton was not because of any reluctance by the Swedish company.  Mr Davidson, the Managing Director of Eton, in his letter of 18 September 1989, was clear that his company was keen on selling its products in Australia.  The halt to proceedings seems to have been mainly due to hesitation by the Australian company to proceed with the venture in the economic climate as it existed at the time.  Fairmark's Mr MacDonald, in his final letter to Eton, on 6 March 1990, certainly does not close the door on any further negotiations and I feel, for the foregoing reasons, that Eton of Sweden was the first to project the appropriate goods into the Australian market place under the mark concerned.

The second question is whether that use in the correspondence, on the two sets of samples sent from Sweden, and as listed on the invoices, is use in the course of trade.  This would appear to be similar to the situation considered by Hearing Officer Homann in Kronborg Isager v Boboli International Inc 1989/90 18 IPR 526. There, the opponent relied on correspondence, invoices and shipping documents relating to the consignment of goods to Australia to show first use. In coming to his decision in favour of the opponent on the question of proprietorship, Mr Homann relied upon the findings in the Thunderbird and Settef v Riv-Oland cases, supra, for support in finding that the supply of samples in the course of trade or offering to trade is sufficient use of the mark to constitute prior user, even though the samples were not for resale.

Having considered all of the foregoing, I have come to the conclusion that there is a strong question of doubt as to whether the applicant is the proprietor of the mark for shirts in Australia.  I think it is much more likely that another entity, either the parent or sister company of the opponent, was the first user of the subject mark for the appropriate goods in this country and is therefore entitled to be considered the proprietor of the mark in this country.  I have therefore decided that the opposition, as it is based on this ground, succeeds.

Section 28 - Deception and confusion

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

A mark -

(a) the use of which would be likely to deceive or cause confusion;
           (b) the use of which would be contrary to law;
           (c) which comprises or contains scandalous matter; or

(d) which would otherwise be not entitled to protection in a court of justice,

shall not be registered as a trade mark.

The test to be applied under paragraph (a) of these provisions, on which the opponent partly relies, has been well established by cases such as Southern Cross, supra, where it was said:

Registration should be refused if it appears that there is a real risk that the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case the two products come from the same source.

That risk must extend to a substantial number of people: Kendall Co v Muslyn Paint and Chemicals, supra..

Following the High Court decision in New South Wales Dairy Corporation v Murray Goulburn Co-operative Company Ltd 18 IPR 385 (the Moo case) the Registrar now follows the practice as laid out in the decision of Hearing Officer Homann in Titan Manufacturing Co v John Terrence Coyne 22 IPR 613 - that is, that all paras of s.28 should be read together. This means that, should I find that the mark is likely to deceive or cause confusion, then it will also be necessary to find that the mark would not be entitled to protection in a court of justice.

In assessing the reputation of the applicant and the opponent in relation to the mark in Australia, the relevant date is the date of lodgment of the opposed application - 28 May 1990 - Southern Cross, supra.  The opponent, according to the evidence in the form of Mr Cumming's declarations, does appear to show that multiple ETON work stations had been installed in eight different garment manufacturers' premises in New South Wales and Victoria since 1982.  Of these manufacturers, only three appear to be dedicated to the production of shirts.  However, the number of manufacturers in Australia who exclusively make shirts does not appear to be great.  I am therefore prepared to concede that the opponent's reputation for these garment making systems would be fairly widespread amongst those in the trade , particularly given the promotion and advertising of the machines in major garment industry publications.  Therefore, I accept from the opponent's evidence that, at the relevant date, it had a well established reputation amongst clothing manufacturers in this country for the mark ETON for garment making systems.  However, in my opinion, this reputation did not extend to cover the goods for which the present application has been made.  The applicant has sought to register the present mark for "shirts".  I have already found that the subject mark was not used first in this country by the present applicant but I cannot agree that the opponent itself had any reputation in the mark amongst the purchasing public for the goods in the present specification.

Section 28(a) is essentially concerned with the public interest and precludes any registration where the opponent's mark is so well known in the market place that use of the applicant's mark is likely to deceive or cause confusion.  Thus, that provision is concerned not so much with the prior use of the mark as a trade mark but with its market reputation.  I must agree here with Mr McGowan that the opponent has not shown that it has established such a reputation for the subject mark in this country for the appropriate goods.  For the foregoing reasons, I find that use of the applicant's mark will not lead to deception or confusion.  I am therefore not satisfied that the requirements of paragraph 28(a) have been made out.

Given the above, I need not proceed further in relation to the s.28 objection.  However, for the record, I note that there is nothing before me to show that there has been any blameworthy conduct on the part of the applicant nor any other circumstance which would disentitle the mark to protection in a court of justice.  It would appear that the mark was first used by the opponent in Europe on shirts and has been copied in detail by the applicant for use in Australia.  However, it has not been shown by evidence, or by Ms Baird's submissions, that such use, however much it may have been "sharp business practice" - the Yanx case, supra, - was in breach of the law.

I therefore find that the opposition, as it is based on this ground, does not succeed.

Section 24 - Distinctiveness
I note hear that the application for the present mark is one in part B of the Register.  In that case, it is the future distinctiveness of the mark - i.e. after the date of the application - which I should consider.  Mr Chow's statement in his declaration, that the applicant has sold shirts bearing the mark through about 150 retail clothing stores throughout Australia without enquires as to its origin, remains uncontested.  Nothing in the opponent's evidence, or in Ms Baird's submissions, is sufficient to convince me that the mark is not capable of becoming distinctive of the applicant.  The opposition, as it is based on s.24, must therefore also fail.

Decision

In summary then, I have decided that, although the opponent has failed in its opposition under s.28, that deception or confusion would ensue if the mark was registered, and under s.24, that the mark is not distinctive of the applicant, it has been successful under s.40 by showing that the applicant was not the first user and therefore cannot be considered the proprietor of the mark in Australia.  Therefore, the applicant has not, to my satisfaction, discharged its initial onus of showing that it is entitled to registration.  I accordingly refuse this application.  Both sides sought costs in the matter but I can see no reason why they should not follow the result.  I therefore award costs to the opponent.

Ian Forno
Hearing Officer

6 December 1994