Skyy Spirits, LLC v Blue Sky Brewery Holdings Pty Ltd

[2016] ATMO 21

TRADE MARKS ACT 1995

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

Re:Opposition by Skyy Spirits, LLC to registration of trade mark application 1410317 (32) - BLUE SKY PILSENER (device) - in the name of Blue Sky Brewery Holdings Pty Ltd.

Delegate:	Adrian Richards
Representation:	Opponent: Blake Knowles of Cullens Patent and Trade Mark Attorneys Applicant: Thomas Stevens of O’Reilly Stevens Lawyers
Decision:	2016 ATMO 21 Opposition under section 52 of the Trade Marks Act 1995 (Cth) – grounds of opposition under sections 42(b), 44 and 60 pressed – section 60 established – costs awarded against the applicant

Background

1. This matter concerns an opposition to the registration of a trade mark under s 52 of the Trade Marks Act 1995 (Cth) (‘the Act’).[1] The opposed trade mark application is currently in the name of Blue Sky Brewery Holdings Pty Ltd (‘the Applicant’), and includes the following relevant details:

   Trade Mark Number:             1410317

   Filing Date:       22 February 2011

   Specification of Goods:         Class 32: Alcoholic beers

   Trade Mark:               

   (‘the Trade Mark’)

   [1] Each reference to a section below is a reference to a section of the Act.

2. The application has been examined under s 31 and the Trade Mark was accepted for possible registration. Acceptance was advertised in the Australian Official Journal of Trade Marks on 10 January 2013. Having secured a three month extension of time in which to do so, Skyy Spirits, LLC (‘the Opponent’) subsequently filed a Notice of Intention to Oppose and a Statement of Grounds and Particulars on 9 July 2013. The Statement of Grounds and Particulars nominates grounds of opposition under ss 42(b), 44 and 60.

Evidence, submissions and hearing

1. The parties have filed the following declarations in evidence:

Declarant	Role	Date declared	Exhibits
Evidence in Support
Aldo Davoli	Intellectual Property Manager of Davide Campari – Milano s.p.a (the entity that controls the Opponent)	11 February 2014	AD-1 to AD-21
Evidence in Answer
Thomas Stevens	Solicitor acting for the Applicant	13 May 2014	TS-1 to TS-2
Anthony David Lewis Newman	Director of the Applicant	13 October 2012 (this declaration was filed as annexure TS-2 to the Stevens declaration)	A to F

1. On 13 October 2014 the Opponent requested a hearing and indicated that it wished to appear by telephone. The Applicant elected not to appear, instead filing written submissions beforehand, in accordance with the Trade Marks Regulations 1995 (Cth) (‘the Regulations’).

2. As delegate of the Registrar of Trade Marks, I conducted the hearing in Canberra on 25 March 2015. The Opponent was represented by Blake Knowles from Cullens Patent and Trade Mark Attorneys.

Relevant date & onus

1. The rights of the parties are to be determined as at the filing date.[2] The Opponent bears the onus of establishing at least one of the grounds of opposition.[3] The standard of proof is the balance of probabilities.[4]

   [2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; Pfizer Products Inc v Karam (2006) 219 FCR 585, 591-4 [16]-[26].

   [3] Section 55.

   [4] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [132].

Discussion of the grounds of opposition

1. Section 60 provides:

   Trade mark similar to trade mark that has acquired a reputation in Australia

   The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

   (a)    another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

   (b)    because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.

   Note:    For priority date see section 12.

2. The Opponent has put forward that both its SKYY and SKYY BLUE trade marks satisfy this ground of opposition. Given the Trade Mark prominently includes both ‘blue’ and ‘sky’, I will first consider the Opponent’s SKYY BLUE trade mark. The Opponent must demonstrate that its SKYY BLUE trade mark had a reputation in Australia before the priority date of the application, and that because of that reputation use of the Trade Mark would be likely to deceive or cause confusion.

Reputation

1. The Opponent submits that it ‘relies upon its strong reputation in its trade mark SKYY and associated brands, such as SKYY BLUE and SKYY Infusions.’ The Opponent’s evidence indicates that the ‘associated brands’ also include SKYY PLATINUM, and may include SKYY COSMO and SKYY SUNSET. However, for the purposes of the present discussion I have confined my consideration to SKYY BLUE.

10.  The date at which the Opponent has to establish that another trade mark had acquired a reputation in Australia is the priority date of the application, 22 February 2011 (the ‘relevant date’). The first limb of s 60 requires that the Opponent establish this reputation as a matter of fact.[5] Reputation can be demonstrated in a number of ways. This can include direct evidence such as consumer appreciation. Reputation may also be inferred from a high volume of sales combined with substantial advertising figures and other promotions.[6] The reputation must be reputation as a trade mark.[7]

[5] ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193, 234.

[6] McCormick & Co Inc v McCormick (2000) 51 IPR 102, 127.

[7] Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (2012) 94 IPR 551, 574-5 [121]-[131].

11.  The Opponent’s evidence describes its goods offered under the SKYY BLUE trade mark as ‘a malt and vodka based beverage designed to be a “malternative” (i.e. a ready to drink beverage with a similar alcohol content to beer, that is intended as an alternative to beer).’ This is supported in several exhibits to Davoli which show that these goods are a brewed, malt based alcoholic beverage with added vodka and other flavourings. The evidence also shows that these goods are created due to a partnership between the Opponent and the Miller Brewing Company, a well-known beer producer. It is the latter entity that brews the goods.

12.  There is some inconsistency as to when the Opponent began to use the SKYY BLUE trade mark in Australia. At one stage Mr Davoli asserts that the product sold under the SKYY BLUE trade mark was launched in 2002, and later appears to state that the launch was in 2003. That said, there is little practical difference for current purposes, since they both fall well before the relevant date.

13.  Sales figures for SKYY BLUE in Australia have been provided from 2003 thorough to 2010. During the hearing Mr Knowles suggested that these figures should be considered as strong, particularly given the congested nature of the market for ready to drink bottled alcoholic beverages in Australia. I accept that proposition.

14.  Turning to advertising expenditure in Australia, the Opponent’s evidence discloses an approximation of its yearly spend in relation to all of its SKYY trade marks. The figure disclosed is commensurate with its sales figures, and as such is significant. Unlike the sales figures, specific years have not been offered, nor does the evidence show what amount was spent on advertising in relation to the SKYY BLUE trade mark alone. Examples of past advertising campaigns provided in evidence, however, demonstrate that the Opponent has regularly advertised goods bearing the SKYY BLUE trade mark in Australia from 2003 onward.

15.  The Opponent’s evidence offers an insight into the level of customer recognition of SKYY BLUE at the relevant date. From 2003 to 2008 inclusive, the Opponent engaged in an annual advertising campaign. Examples provided in evidence show outdoor media installations and the magazine Cleo. The approximate readership of Cleo has also been provided in evidence and is substantial.

16.  There are several other examples of advertising and marketing in the Opponent’s evidence which reinforce the notion that the Opponent regularly and actively promotes the goods sold under the SKYY BLUE trade mark. All of the examples of advertising provided by the Opponent show that use to be as a trade mark.

17.  Beyond the Opponent’s advertising and sales in Australia, the evidence includes examples of the Opponent’s media releases around launches of products sold under the SKYY BLUE trade mark and third party commentary on that product.

18.  This combination of sales and advertising figures, examples of advertising, reach of the magazine advertising, and third party commentary lead me to be satisfied that SKYY BLUE had a strong reputation in relation to a brewed, malt based alcoholic beverage amongst a significant section of the Australian public at the relevant date.

Likelihood of deception or confusion

19. Having found the requisite reputation in SKYY BLUE, the second limb of s 60 requires that I consider whether, as a result of that reputation, use of the Trade Mark would be likely to deceive or cause confusion. The Act does not set out any particular factors to be considered in weighing this consideration. However a number of factors that are relevant to this enquiry may be found in the decided cases. Relevant to the current matter, these include the similarity of the trade marks[8] and the nature of the goods for which the Opponent’s trade mark has a reputation.[9] For a positive finding under this limb, the likelihood of deception or confusion must be to a greater degree than merely causing consumers to wonder ‘about common origin or connection’,[10] there must be a ‘real tangible danger of its occurring’.[11]

[8] Rogers Seller & Myhill Pty Ltd v Reece Pty Ltd [2010] ATMO 5.

[9] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592.

[10] Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020.

[11] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 594-5 (Kitto J).

20.  Under s 60 I am to only consider actual demonstrated reputation in the Opponent’s trade mark, but I should consider the notional fair use that the Applicant’s trade mark might be put to.[12]

[12] Cadbury Schweppes Pty Ltd v Effem Foods Pty Ltd [2005] ATMO 29 [37].

21.  The examples of use provided in the Opponent’s evidence show its SKYY BLUE trade mark represented in various ways. It is shown represented in plain text in two (essentially identical) ways:

·     SKYY Blue - the first word in all capitals and the second in title case.

·     SKYY BLUE - a bolded first word and the second word in all capitals.

Both of these examples place the word SKYY first and BLUE second. But when applied to bottles of the goods or in marketing materials, it takes on a greater variance, for example:

This is an image of a bottle of the citrus variant of the SKYY BLUE product. The representation conveys a similar impression to the bolded plain text representation SKYY BLUE, but with the bolded word SKYY sitting above the word BLUE.

Here are two representations of the Opponent’s trade mark. The version in the bottom left corner is again similar to the plain text representation SKYY BLUE. The representation appearing on the bottle itself is different again. It affords significant visual prominence to the word SKYY indicates that this is the house mark, while the subordination of the word BLUE indicates this to be a line brand.

22.  Turning to the Trade Mark, it consists of a composite, circular device. The primary features are the words BLUE SKY PILSENER together with bottles of beer against a patterned background.

23.  It is the words BLUE SKY PILSNER that dominate the Trade Mark, and they are most likely to be used to refer to the goods. The image of bottles against a patterned background cannot be discounted, although the impression left by it is likely to be of a more general or vague nature than of any photographic recollection of the whole.[13] The other words in the Trade Mark are unlikely to leave any impression: they are utterly descriptive and are visually overwhelmed by the remainder of the Trade Mark. Additionally I would discount somewhat the reference to PILSNER, since it too describes the Applicant’s goods.

[13] De Cordove v Vick Chemical Company (1951) 1b IPR 496, 499.

24.  The most memorable parts of the Opponent’s trade mark are the words SKYY BLUE, and the words BLUE SKY are a dominant part of the Trade Mark. The impression likely to be carried away by each of these elements is likely to be ‘sky blue’ and ‘blue sky’ respectively, which I consider carry a degree of similarity that, when considered in the context of the reputation of SKYY BLUE, is likely to cause confusion as to whether they originate from the same trader. Further, the goods of the Applicant and the goods in relation to which the Opponent enjoys a reputation are similar in nature, being malt based brewed beverages that are intoxicating in their ordinary use, enhancing the likelihood of confusion in the mind of the consumer.

Nature of the goods

25.  In considering the nature of the goods in which the Opponent has a reputation, being small relatively cheap consumable items, the circumstances in which they are purchased becomes relevant. They may be purchased in bars or nightclubs which can be dimly lit, noisy and crowded environments. When in this situation, alcoholic beverages will often be ordered by name from behind a bar, relatively distant from the product itself.[14] Normal use of the goods will tend to cause a degree of inebriation. Even when ‘exceptional carelessness or stupidity’[15] is disregarded, the circumstance in which the goods may be bought and sold adds to the likelihood of deception or confusion.

[14] Lion-Beer, Spirits & Wine Pty Ltd v Michael Harvey [2013] ATMO 6.

[15] Australian Woollen Mills Ltd v F S Walton & Co. Ltd (1937) 58 CLR 641, 658 (Dixon and McTiernan JJ).

Applicant’s submissions on s 60

26.  The Applicant’s submissions and evidence on the s 60 ground go to two issues:

·The Opponent has not opposed the registration of six of the Applicant’s other trade marks, and despite the Applicant’s use of the Trade Mark, the Opponent has not commenced infringement or similar proceedings (‘Other Potential Proceedings’).

·The Opponent has not led evidence of similarity or confusion between the trade marks which are in comparison, or similarity of the goods (‘Evidence of Similarity and Actual Confusion’).

Other Potential Proceedings

27.  The Applicant contends that the Opponent’s inaction in relation to six of its other applications ‘demonstrates the falsity of the Opponent’s arguments in support of its opposition’, and that this together with the Opponent’s failure to pursue a remedy through the courts renders the present opposition ‘irrational and confounding.’

28.  Regarding its failure to bring infringement proceedings against the Applicant, the Opponent has submitted that there are a number of legal and financial considerations that go to commencing a civil action. This seems an uncontroversial and adequate explanation.

29.  The Opponent’s explanation for not opposing the registration of several of the Applicant’s other trade marks is more detailed. At the hearing Mr Knowles explained that those trade marks contain the words ‘Blue Sky Brewery’ (contended to be similar material) only as a very minor element and one had been accepted without alcoholic beverages in the specification of goods.

1. To further illustrate the history of proceedings before this office between the parties Mr Knowles also referred to an earlier application that is identical in all material respects to the present application. The Opponent filed an opposition to the registration of that earlier application upon its acceptance, but that proceeding was discontinued early because the Registrar subsequently revoked acceptance under s 38. That earlier application then lapsed by operation of s 37.

Evidence of Similarity or Actual Confusion

31.  The Applicant’s submissions on this issue are reproduced below:

5. The opponent adduces no evidence of deceptive similarity. We submit that the reason for this lack of evidence is that the opponent’s marks are not deceptively similar, which is self-evident.

6. The opponent adduces no evidence of tangible danger of confusion. It is submitted that if tangible danger does exist, then ipso facto there must be evidence supporting this allegation. But there is no such evidence. The allegation is unfounded.

…

9. The opponent concedes that it is not aware of any instance of confusion occurring in the Australian market. It is submitted that this belies the opponent’s submission that there is a real tangible danger of deception or confusion in the market place…

10. The applicant rejects the opponent’s assertion that there is a potential for confusion which is obvious and incontrovertible. (emphasis in original)

32.  The Stevens declaration includes more information going to the points expressed above:

14. In paragraph 25 of Mr Davoli’s declaration, he asserts that the malt and vodka based beverage marketed under the trade mark SKYY Blue is intended as an alternative to beer; and in paragraph 36 he asserts that “the Opponent’s partnership with Miller, a famous beer brewing company, has considerably increased awareness of the Opponent’s SKYY Blue products and SKYY brand amongst beer drinkers, and that SKYY Blue is seen as an alternative to beer by consumers in Australia and internationally”, however, Mr Davoli provides no evidence whatsoever in support of this assertion.

15. The product sold under the opposed trade mark the subject of the application 1410317 has been marketed in Australia, along with products bearing the Blue Sky Marks, since 2008; and to the best of my knowledge and belief, there has not been a single instance of confusion in the market place between the products marketed by the Applicant and the products marketed by the Opponent.

16. In paragraph 37 of Mr Davoli’s declaration he … expresses his opinion that “there is a strong likelihood of confusion if both trade marks are used in the marketplace on alcoholic beverages”, but Mr Davoli provides no evidence whatsoever in support of his opinion.

33.  There are three strands to these submissions:

(a)   The Opponent has not led evidence of any instance of deception or confusion in the marketplace, and indeed has conceded that it is not aware of such an occurrence.

(b)   The goods in comparison are not similar.

(c)   The trade marks are not deceptively similar.

As can be seen in the above excerpts, strands (b) and (c) merely contradict submissions put forward by the Opponent. At any rate, it is not a requirement of s 60 that the respective goods of the parties be of any specified standard of similarity, nor is it a requirement that the respective trade marks are substantially identical or deceptively similar. Confusion or deception may be likely where little, if any, nexus exists between the goods and/or services in question depending on the strength of reputation and degree of similarity between the trade marks.[16]

[16] Rogers Seller & Myhill Pty Ltd v Reece Pty Ltd [2010] ATMO 5.

1. Returning to (a), while evidence of actual deception or confusion is a factor which, if provided, will be given great weight, such evidence is not required to establish s 60(b). This is in part because s 60(b) requires consideration of the likelihood of deception or confusion, rather than actual instances of deception or confusion.[17]

   [17] Berlei Hestia Industries Limited v The Bali Company Inc (1973) 129 CLR 353, 355.

Conclusion on s 60

1. Having found the Opponent’s trade mark had at the relevant date acquired the requisite reputation in Australia, I then considered whether, given that reputation there was a likelihood of deception or confusion. I first noted the similarity of the trade marks and the goods. In weighing s 60(b) I also considered the circumstances in which the Opponent’s trade mark has been used, and notional use of the Applicant’s trade mark. All but one of the factors I have considered goes to a finding that there is a real tangible likelihood of deception or confusion. The one factor that suggests otherwise is the lack of evidence of any instances of actual deception or confusion which is not fatal to the opposition under s 60. Having weighed the relevant circumstances, on balance, I find that the Opponent has established this ground of opposition.

36. As a result of my finding above, it is unnecessary to consider the other grounds of opposition pursued by the Opponent (namely ss 42(b) and 44). Those grounds (and others under the Act) will be available to the Opponent should this decision be appealed to a prescribed court.

Decision

37.  Section 55 provides:

55  Decision

(1)    Unless subsection (3) applies to the proceedings, the Registrar must, at the end, decide:

(a)to refuse to register the trade mark; or

(b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

having regard to the extent (if any) to which any ground on which the application was opposed has been established.

Note:           For limitations see section 6.

(2)    Without limiting subsection (1), if the application was opposed on the ground specified in paragraph 62(a) (that the application, or a document filed in support of the application, was amended contrary to this Act), the Registrar may revoke the acceptance of the application and examine the application again under section 31.

Note:           For examine and this Act see section 6.

(3)    This subsection applies to the proceedings if:

(a)the proceedings are discontinued; or

(b)the proceedings are dismissed; or

(c)the application lapses because of the operation of section 54A (about lapsing of applications if a notice to defend the application is not filed).

38.  The Opponent has successfully made out a ground of opposition, and I refuse to register the Trade Mark.

Costs

39.  The Opponent has requested an award of costs. The ordinary rule is that costs follow the event.[18] I award costs against the Applicant in accordance with the amounts set out in Schedule 8 of the Regulations.

[18] Milne v Attorney-General (Tas) [1956] HCA 48.

Adrian Richards
Hearing Officer
Trade Marks Hearings
31 March 2016