Sitmar Cruises Ltd v Carnival Cruise Lines Inc

[1992] ATMO 62

trade marks act 1955

decision of A DELEGATE OF the registrar of trade marks

Re:Opposition by CARNIVAL CRUISE LINES, INC. to Trade Mark Applications Nos 423111, 423114, 426422, 426424, 426541 and 426542 in the Name of SITMAR CRUISES LTD.

The above six trade mark applications have been accepted in the name of SITMAR CRUISES LTD, a British company, ("the applicant"), and opposed by CARNIVAL CRUISE LINES INC., a Panama company, ("the opponent"). The trade marks and the services in respect of which they have been accepted for registration are set out below:

1. SITMAR'S FUNSHIP          Entertainment services provided in connection with ship cruises, not being ship cruises originating from North American ports

1. FAIRSTAR THE FUNSHIP      As for 423111

1. SITMAR'S FUNSHIP          Services relating to arranging ship cruises not being cruises originating from North American ports and transportation services provided in connection with ship cruises not being ship cruises originating from North American ports

1. FAIRSTAR THE FUNSHIP      As for 426422

1. FUNSHIP                   As for 426422

1. FUNSHIP                   As for 423111

The respective dates of lodgment of the applications were:

423111 & 423114  1 March 1985

426422 & 426424  7 May 1985

426541 & 426542  8 May 1985

The opposition proceedings were commenced by notice of opposition lodged on 31 March 1988. The service and filing of evidence by both parties was completed on 29 October 1991 and the matter came on for hearing in Sydney on 6 March 1992. The applicant was represented by Mr David Yates of counsel instructed by F.B.Rice & Co, patent attorneys, and the opponent by Mr Tony Bannon of counsel instructed by H.R.Hodgkinson & Co, patent attorneys.

Mr Bannon began by stating that the principal ground of the opposition was that the opponent was the first user of the mark FUNSHIP in Australia in relation to the services specified and the applicant was not entitled to be considered the proprietor of the mark in terms of s40 of the Act. He added that the applicant had used the word Funship merely as a laudatory slogan and that the word was inherently non-distinctive. He would also rely on s28, that the use of the mark by the applicant would lead to the deception and confusion of the public.

Mr Bannon then took me to the evidence in support and in reply which consists of declarations, together with exhibits, of the following persons:
     .    Aldo Nicotra
     .    Tania Carol Chambers
     .    Rehana Box
     .    Nicholas Brill-Suie
     .    Michael Stewart Woolley
     .    Judith Ann Marbrow
     .    Ian Randall McMinn
     .    Kenneth Phillip Coulter
     .    Robert Dickinson
     .    Raymond George Stevenson

Mr Robert Dickinson states that he is Senior Vice President for Sales and Marketing of the opponent Company which commenced to provide cruises from Miami to the Caribbean Sea in the year 1974 using the trade mark FUN SHIP to promote its ship and its cruises. In the following years the opponent expanded its activities with the purchase of more ships which were marketed as "THE FUN SHIPS" and its cruises as "FUN SHIP cruises". At the time of making the declaration, 17 August 1989, the opponent operated 10 ships with three more due to be delivered in 1989, 1990 and 1991. The entire operation is promoted under the theme of THE FUN SHIPS. Mr Dickinson goes on to set out the number of passengers carried and the value of sales for the years 1974 to 1989. In 1988, for example, 559,506 passengers were carried with a value of approximately $US574m. He states that 90% of the passengers are from the United States and Canada but that since 1980 a number of passengers have come from Australia having arranged and completed their bookings in Australia. He believes that the first of such bookings were made in at least 1978 or possibly in late 1977. Publicity material advertising the the opponent's cruises under the trade mark FUN SHIP or FUN SHIPS has been widely distributed throughout the world and since 1978 to Australia. He states that the opponent is the largest cruise ship operator in the world with a worldwide reputation as operator of the FUN SHIPS. Since 1977/78 the opponent has had general sales agency agreements with a number of travel agents in Australia. The number of passengers booked on the opponent's cruises from Australia for the years 1980 to 1988 are as follows:

YEAR         NUMBER OF PASSENGERS

1980  10

1981  34

1982  28

1983  14

1984  69

1985  25

1986  14

1987  21

1988                   138

In the year 1988 the opponent had an advertising budget of US$33m. All of the advertising and promotional material feature the words FUN SHIP or FUN SHIPS prominently. Many samples of this material are exhibited to Mr Dickinson's declaration.

Raymond George Stevenson states that he is the managing director of Bridge Travel (Australia) Pty Ltd, trading as Cruise World, which in 1983 was appointed as general sales agent of the opponent in which capacity it distributes brochures on behalf of the opponent and maintains a reservations function with travel agents. It also promotes and publicises the activities of the opponent. Mr Stevenson was formerly employed by a predecessor in business of the applicant between 1975 and 1982 during which time the Sitmar group of companies operated cruise ships from ports in the United States in direct competition with the opponent, including cruises from Fort Lauderdale in Florida to ports in the Caribbean. He states that no innovation of such significance as the promotion of the applicant's ship "Fairstar" as "the Funship" could have taken place without the approval of the Los Angeles office of Sitmar International Inc. which at that time had final control over the operations of the Sitmar group of companies. He further states that as an executive of Sitmar he himself was well aware of the entry of the opponent into the world cruise market and the Fun Ship concept introduced in 1973. Since 1983 he has disseminated brochures of the opponent to travel agents in Australia. Samples of these are exhibited to the declaration. The passages booked by his company on cruises of the opponent are as follows:

1984                 3 bookings

1985                23 bookings

1986                23 bookings

1987                70 bookings
          1988/9             145 bookings

Kenneth Philip Coulter states that he was from 1979 to 1984 managing director of a company which trades as Coulter Tours and in 1980 was appointed general sales agent of the opponent in which capacity as from that date it distributed brochures advertising the opponent's cruises and press releases about those cruises to trade magazines. Exhibited to his declaration are samples of this material. He also received from the opponent a sales manual which referred extensively to the mark "Fun Ship" or "Fun Ships".
Judith Ann Marbrow states that a company trading as Bank Street Travel of which she was a director became the Australian agent for the opponent in late 1977 or early 1978 which meant that all bookings were made through that business. During this period the agency received 150-200 brochures from the opponent referring to the opponent's FUN SHIPS. She caused these brochures to be distributed to travel agents. She does not know how many bookings were made during the period.

Ian Randall McMinn states that from 1980 to 1984 he was employed by Coulter Tours where his job was to deal with tour reservations including reservations for the opponent's cruises. He cannot remember how many reservations he made during this period but estimates the number at about two dozen per year. In May 1983 Coulter Tours held a film night for members of the public at which a film about the opponent's cruises was shown. The film referred to the opponent's ships as "Fun Ships". When he became aware of the applicant's use of the term he first thought that the opponent had started operating out of Australia. He says he still associates "Fun Ships" with the opponent.

Aldo Nicotra states that he is a solicitor. In 1986 he visited the State Library of New South Wales where he examined editions of the magazines Traveltrade and Inside Tourism for the years 1980 to 1985. He states that he found 13 separate references to the opponent or the words "Fun Ships". Copies of these references are exhibited to the declaration.

Mr Yates referred to the adoption of the applicant's trade marks as set out in the declaration of Philip Albert Young who was the General Manager, Marketing of the applicant from approximately 1981 to 1988. He states that the applicant developed a marketing plan for the "FUNSHIP" concept in late 1983 with the intention of marketing it in late 1983 or early 1984. He states that he and other members of the applicant were aware of the use of the term "FUN SHIPS" by the opponent in North America but that he had not seen any use of the term in Australia by the opponent or any other party. The applicant has used the term since May 1984 in the form covered by the opposed applications. Mr Young states that the applicant honestly adopted the marks without knowledge of any prior right or use of the same or a similar mark by any other party in connection with similar goods or services in Australia.Mr Young refers to an earlier declaration, dated 9 June 1987, filed in support of the trade mark application in which he summarises the extent of use of the mark since the adoption and first use of the trade mark FUNSHIP. He states that the applicant had offered 78 cruises from Australian ports on which 109,313 paying passengers had travelled. The revenue derived from these cruises was approximately $142m. Since then revenue from the cruises has been approximately $50m a year.

Thomas Edward Blamey was chief executive of the business of Sitmar Cruises in Australia, New Zealand, South Pacific and Asia from 1979 to 1989. He also states that at the time of the adoption of the mark FUNSHIP by the applicant it was unaware of any use by the opponent or any other party of that term in Australia. This is supported by Johannes Adrianus Maria Hans Hulsbosch who from 1979 to 1984 was Senior Art Director with the applicant's advertising agency and states that at a meeting in 1981 with Mr Young he suggested the name FUNSHIP and that before 1986 he had never heard of the opponent or of the expression being used by any shipping company apart from the applicant.

Evidence of the extensive use of the applicant's marks is contained in a declaration of Stephen Angus McBurnie, General Manager, Marketing of a business trading as P & O - Sitmar Cruises in which capacity he has access to records of the marketing activities of the applicant. The marks have been widely promoted by means of advertising in various communications media including radio and television, mass circulation magazines, posters and outdoor advertising and by means of brochures distributed to some 3,000 travel agents throughout Australia. For example, for each of the years 1987 to 1991 over 500,000 brochures were produced; in each of the years 1988 and 1989 over $1m was spent on various forms of promotion

The question for my decision on the basis of the evidence of which I have given only an outline can be stated quite shortly: Is the opponent the proprietor of the marks applied for by the applicant by virtue of prior use of its mark?

proprietorship

The concept of proprietorship was explained by McGarvie J in Settef v Riv-Oland Marble 10 IPR 402 at 413:

"Acquiring proprietorship

At common law (which in the present context is treated as including the principles of equity), property in a trade mark could only be acquired by public use of the mark as a trade mark.  The right of the proprietor of a trade mark was to prevent its use as a trade mark by other persons.  The original remedy for the protection of this right was an injunction to restrain infringement.  Principles as to the way in which the discretion should be exercised to protect a trade mark by injunction were settled by the Court of Chancery.  The cases which settled these principles established the types of trade marks in which a person would be recognised as having a right of property which would be protected by injunction: G E Trade Mark [1973] RPC 297 at 324‑7 per Lord Diplock.

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. A person who becomes proprietor of a trade mark in this way is entitled at common law to restrain a person who later commences to use the trade mark.

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. Settef claims to be the first person to have used the trade mark in Australia and therefore to have been proprietor at common law in Australia.

The relevant meaning of "use" in this context was considered by the High Court in Moorgate Tobacco v Philip Morris 3 IPR 545 at 557:

The court was referred to a large number of cases and to some administrative decisions in which consideration has been given to what constitutes a use or user of a trade mark for the purposes of the statutory notion of proprietorship of the mark before registration.  The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark.  It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark (Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corporation Ltd, supra, at 204‑5) or that the mark has been used in an advertisement of the goods in the course of trade (Shell Co of Australia v Esso Standard Oil (Australia) Ltd, supra, at 422).  In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade.  In the present case, 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.  There was no local use of the mark as a trade mark at all ...

In order for the question of proprietorship to arise at all, however, it is necessary that the conflicting marks be the same mark or at least so similar as to be virtually the same mark: The Kendall Co v Mulsyn Paint and Chemicals (1962-63) 109 CLR 300; Tavefar Pty Ltdv Life Savers (Australasia) Ltd 12 IPR 159. Whether the marks are so alike as to lead to the deception or confusion of the public is relevant under ss28 & 33 but not under s40. The marks used by the opponent, FUN SHIP and the plural FUN SHIPS, are not the same mark as the applicant's marks SITMAR'S FUNSHIP and FAIRSTAR THE FUNSHIP. In relation to those marks, therefore, the question of proprietorship does not arise. In relation to applications 426451 and 426542, however, for the trade mark FUNSHIP I believe that there is such a question since it is virtually the same mark as the opponent's mark.

I think it is clear from the evidence that there was a use of the opponent's mark in the ordinary sense before the date of lodgment of the two applications in question, 8 May 1985, and before the first use of the mark by the applicant, May 1984. Several declarants have declared to the fact that the opponent's brochures displaying the mark were distributed to travel agents and bookings were made by travel agents for cruises on the opponent's ships. It is a reasonable inference that some at least of those bookings were a result of the distribution of the brochures. But the crucial question for decision is whether that use was use in the sense required by the Act for the purpose of establishing proprietorship of the mark in Australia. There was an offer to trade and an actual trade in the specified services. But those services were not provided in Australia. All of the opponent's cruises were from ports in North America. Mr Bannon submitted that it was not necessary and it was not the law that the services had to be supplied in Australia in order to qualify as use under the Act. He argued that the marks had been used in the course of trade and that was all that was required. He relied on Re the Registered Trade Mark "Yanx" (1951) 82 CLR 199. In that case the goods had been offered for sale and ordered in Australia but at the relevant date had not reached Australia for delivery. In the present case the services had been offered for sale and sold in Australia for delivery overseas. Mr Yates argued that the required use must be use in Australia in relation to services to be provided in Australia. Even if they are advertised in Australia the services must be provided there. In the Yanx case (supra) there was no suggestion that the goods might never reach Australia. The goods do not have to be in Australia at the relevant time but they must exist in Australia at some time. That was quite different from the situation in this case where the services were entirely consumed overseas.

Although there is no decision of an Australian court directly in point, in Estate Agents Co-operative Ltd v National Association of Realtors (1988) AIPC ¶90-470 Chief Assistant Registrar said, in relation to convention services:

Even if details of these arrangements had been available to me, it seems to me that, unless the services themselves were provided in Australia, no use of of the mark in the required sense could be shown.

This is not to say that in some circumstances services originating outside of Australia could still be considered to be provided within this country. For example, the opponent's library services, although emanating from a library in the U.S., could be provided, and identified by the mark in suit, in Australia by means of requests sent from Australia and information or material sent from the U.S. However, it seems to me that a mark can only be considered to have been used in Australia in relation to certain services, such as convention services, or hotel accommodation or restaurant services, if the benefit and effect of those services is received in this country.

I agree with that conclusion in relation to the services specified in the applications in question. This would appear to be the position also in the United Kingdom in relation to the equivalent provision. In the 12th edition of Kerly's Law of Trade Marks and Trade Names the authors say, at 2-07:

Where advertisements of goods produced abroard are relied upon to establish the use of the trade mark, it must be possible to identify the goods advertised as goods which, at some stage in the course of trade are, or are intended to be, dealt with in the United Kingdom. So also, if foreign advertisements for services are to be relied upon as use, they must relate to services to be performed in the United Kingdom.

So also, it seems to me that even if the advertisements are produced or circulated in Australia if they are to be relied on as use for the purposes of the Act they must relate to services to be performed in Australia. It follows that the use made of its mark by the opponent was not use in the sense required to establish proprietorship in the mark in Australia.

section 28

The test to be applied under ss.28 may be stated as follows, paraphrasing the words of Evershed J. in Smith Hayden & Co Ltd's Application (1946) 63 RPC 97, in which he compared the tests under ss.11 and 12 of the Trade Marks Act 1938 (UK), which correspond to ss.28 and 33 of the Trade Marks Act 1955 (Cth):

The questions for my decision ... have been formulated, and I think accurately formulated, as follows:

(a) (Under s.28) "Having regard to the reputation acquired by the name FUN SHIP is the Registrar satisfied that the mark applied for, if used in a normal or fair manner in connection with any goods covered by the registrtion proposed, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons?"

The date at which this question is to be answered is the date of lodgment of the opposed applications: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. I do not think that the evidence is sufficient to show that as at March or May 1985 the reputation of the opponent was such as to cause a substantial number of persons to be deceived or confused. There is evidence of a small number of brochures being distributed to travel agents and a small number of bookings being made between about 1980 and 1985. There is no evidence as to how many of the brochures came to the attention of the general public. All in all the evidence falls well short of establishing the sort of reputation required to defeat the applicant's applications.

conclusion

In the result I have found that the use of its mark by the opponent was not the use required to defeat the applicant's claim to proprietorship of its marks and that the opponent lacked the necessary reputation in its mark to displace the applicant's rights pursuant to s28. It is therefore unnecessary for me to consider the submissions made with respect to concurrent use in accordance with s34 of the Act. The opposition is therefore dismissed and I direct that, subject to any appeal from this decision, the applications proceed to registration. As the applicant has been entirely successful I award costs to the applicant.

Michael Homann

Hearing Officer
2 October 1992