SociéTé Des Produits Nestlé S.A. v Jason M Arks

[2014] ATMO 3

TRADE MARKS ACT 1995

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

Re:Opposition by Société des Produits Nestlé S.A. to registration of trade mark application 1447535 (11, 30, 35, 37, 43) – INSPERESSO - filed in the name of Jason Marks

Delegate:	Bianca Irgang
Representation:	Opponent: Alison McGinn of Banki Haddock Fiora Applicant: Present as an observer at the hearing
Decision:	2014 ATMO 3 s.52 opposition – s 60 ground of opposition established for all goods and services - trade mark use likely to deceive or cause confusion - no requirement to consider other grounds – registration refused.

Background

1. Jason Marks (‘the applicant’) filed a trade mark application on 19 September 2011 in classes 11, 30, 35, 37 and 43 of the International Classification of Goods and Services. Relevant details of the application are set out below.

Trade mark:  INSPERESSO

Trade mark application:      1447535

Filing Date:  19 September 2011

Specification:  Class 11: Coffee roasters; domestic coffee machines (electric); electric coffee brewers; electric coffee machines; electric coffee percolators; electric coffee roasters; expresso coffee machines; installations for making coffee; non-electric apparatus for making coffee (heating)

Class 30: Additives for coffee; aerated beverages (with coffee, cocoa or chocolate base); chocolate coffee; coffee; coffee beans; coffee beverages; coffee beverages with milk; coffee drinks; coffee products; decaffeinated coffee; ground coffee; instant coffee; unroasted coffee; sugar; chocolate

Class 35: Retail services; retailing of goods (by any means); wholesaling of goods (by any means)

Class 37: Machinery installation, maintenance and repair

Class 43: Coffee shop services

1. The application was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 12 January 2012. Société des Produits Nestlé S.A. (‘the opponent’) filed a Notice of Opposition (‘the Notice’) to the registration of the application on 11 April 2012. Thereafter the opponent and applicant served and filed evidence as provided by the Trade Mark Regulations 1995 (‘the Regulations’).

2. I heard the matter in Sydney on 16 October 2013 as a delegate of the Registrar of Trade Marks. Ms Alison McGinn of Banki Haddock Fiora represented the opponent. The applicant was present at the hearing but did not make any submissions.

Grounds of Opposition

1. The Notice nominated most of the grounds of opposition available under the Trade Marks Act 1995 (‘the Act’). The onus is upon the opponent to establish one or more of its grounds of opposition. Gyles J has referred to the standard of proof required in terms of a ‘balance of probabilities’.[1] His findings upon that issue, arrived at after a consideration of the relevant authorities, have been discussed with approval by Sundberg J in Chocolaterie Guylian NV v Registrar of Trade Marks[2].

   [1] See Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599

   [2] [2009] FCA 891, para 22-27 (2009) 82 IPR 13. See also Sports Warehouse Inc v Fry Consulting [2010] FCA 664; (2010) 87 IPR 300 at [36] to [39]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011) at [16] to [32])

2. At the hearing the opponent advised that it would press and provide submissions only on the grounds under sections 42(b), 44 and 60 of the Act. None of the evidence served and filed by the opponent appears to go to the other grounds in the Notice and for the sake of completeness I find that those grounds have not been established.

3. Therefore, the grounds remaining for my consideration are those under sections 42(b), 44 and 60 of the Act. Should the opponent establish one ground of opposition in relation to all of the applicant’s specification of goods and services, there is no requirement for the other grounds of opposition to be considered.

Evidence

1. The evidence consists of the following statutory declaration:

Declarant	Position	Date Made	Exhibits
Evidence in Support
Renaud Tinel	General Manager and Market Director of Nespresso Oceania, a business unit of Nestlé Australia Ltd.	16.11.12	Exhibit 1
Evidence in Answer
Jason Marks	Applicant and Business Owner	07.02.13	-

Opponent’s Evidence

1. The statutory declaration of Renaud Tinel (‘the Tinel declaration’) states that the opponent was founded in 1866 and commenced trading in Australia in 1908. In 1970, the opponent created a unique coffee making system. The opponent created its NESPRESSO trade mark for use on its coffee making system and associated goods being espresso machines, coffee capsules and related merchandise such as cups, milk frothers, as well as for use on retail and wholesale services relating to the sale of these goods. The opponent is the owner of the following NESPRESSO trade mark registrations:

Number(s)	Class	Trade Mark
434611	29	NESPRESSO
434612	30	NESPRESSO
434613	32	NESPRESSO
670019	7	NESPRESSO
670020	9	NESPRESSO
670021	11	NESPRESSO
1090659	11	NESPRESSO ESSENZA

1. The Tinel declaration states that the opponent’s NESPRESSO trade mark was created from a contraction of the words NESTLÉ and ESPRESSO. The opponent is the owner of applications and registrations for the NESPRESSO trade mark and associated NESPRESSO trade marks such as the a stylized letter “N” trade mark, used in relation to the NESPRESSO goods and services or NESPRESSO system in more than 89 countries around the world (exhibit RT-3 contained within exhibit 1 accompanying the Tinel declaration).

10.  The opponent’s NESPRESSO trade mark was first used in relation to the above goods and services when the NESPRESSO system was first made available commercially in the office coffee sectors in Switzerland and Italy. It has since expanded to domestic, commercial and professional markets throughout the world including Japan, the US, France, Germany, the UK and Canada. The opponent’s NESPRESSO goods and services were first launched in Australia in 1995.

11.  The opponent’s NESPRESSO trade mark is promoted within a business model that uses boutiques[3] and the NESPRESSO Club[4] to market and sell its NESPRESSO branded goods and services as well as the more traditional mediums such as print, television, event and team sponsorship and in-store demonstrations (exhibits RT-4, RT-7, RT-10 to RT-25, RT-30 and RT-31). The opponent’s promotion of its NESPRESSO branded goods and services has been very considerable.

[3] The opponent’s NESPRESSO branded boutiques are located throughout the world and NESPRESSO coffee capsules as well as other NESPRESSO accessories can be purchased through the boutiques.

[4] The NESPRESSO websites throughout the world are home to the NESPRESSO Club. A NESPRESSO machine owner can register as a member of the NESPRESSO Club and can then ask questions about the NESPRESSO system, order capsules, arrange servicing of their machine and obtain other NESPRESSO Club benefits.

12.  The NESPRESSO capsules are all manufactured by Nestlé Nespresso in Switzerland and are distributed globally[5]. The capsules can only be purchased through the opponent’s NESPRESSO boutiques, by mail-order or online and not at standard retail outlets such as supermarkets. NESPRESSO branded coffee machines may be purchased through the same channels as well as through department stores, small boutiques and electrical appliance stores.

[5] The NESPRESSO capsules are manufactured in Switzerland, 24 hours a day, in a specially engineered production line. In excess of 4.8 billion individual NESPRESSO capsules are manufactured annually by a rotating team of specifically trained operators.

13.  The NESPRESSO branded goods and services are sold to small and medium sized offices, restaurants, luxury retailers, hotels and airlines as well as to individual consumers. Sales were initially focused on the business to business sector but by 1987 the NESPRESSO branded goods were being sold to private consumers for use in their homes. By March 2001, the NESPRESSO goods were being sold in 6,500 retail stores in more than 30 countries. In 2005 the opponent’s first NESPRESSO boutique opened in Sydney and it now has a number of its NESPRESSO boutiques across Australia.

14.  The opponent’s online NESPRESSO Club also continued to grow and in 2011 the number of Australian members was in the hundreds of thousands while there were over 12 million international members registered. Since 1995 sales of the opponent NESPRESSO branded goods and services in Australia have generated hundreds of millions of dollars in revenue. Commencing in 1996, the opponent’s advertising expenditure has also been considerable.

Applicant’s Evidence

15.  The statutory declaration of Jason Marks (‘the Marks declaration’) sets out a history of espresso[6] followed by a personal history which led to his decision to apply for the trade mark INSPERESSO. Mr Marks states that he started working for Belaroma coffee in 1994 roasting coffee on Ian Bersten’s patented Roller Roaster. In around 1995 he moved into the service department of Belaroma repairing and servicing espresso machines and general coffee machinery.

[6] Taken from on the 11 December 2012.

16.  In 2001 Mr Marks started his own small business repairing and servicing espresso machines. This business was registered as “Jason Marks Espresso Services” and offered its services to the coffee industry. The business name was later changed to “Espresso Service Plus” and remains in operation. Around this time Mr Marks also acquired the domain name and went on to sell espresso machines and equipment through this website. In 2004 Mr Mark commenced another business venture and started to roast and supply coffee under the registered trade mark “9Bar Coffee”.

17.  The Marks declaration provides that the invented word INSPERESSO is a combination of the themes of “inside”, “inspirational” and “espresso”. There is no other information provided on how the applicant came up with the trade mark but there are considerable submissions by Mr Marks on why the opposition should be dismissed.

18.  The Marks declaration also contains a list of four other trade marks on the Register which Mr Marks states have direct links to the word ‘espresso’. He suggests that this demonstrates the state of the Register and that ‘espresso’ trade marks are able to co-exist on the Register. These trade mark registrations are as follows:

Number(s)	Class	Trade Mark
915739	16, 30	IMPRESSO
963598	11	ESPRESSO BAR
1218144	30
1359766	30, 35, 43	ESPRESSO TRAIN

Discussion

Section 60 - Reputation in Australia

19. Section 60 of the Act provides:

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

20.  In McCormick & Co Inc v McCormick (‘McCormick’)[7] Kenny J discussed the meaning of “reputation” as:

[7] [2000] FCA 1335; (2000) 51 IPR 102, at [81] – [82].

What is intended by the word “reputation” in section 60? The word is defined in The Macquarie Dictionary as follows:

reputation…1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute…2. favourable repute; good name…3. A favourable and publicly recognised name or standing for merit, achievement, etc…4. The estimation or name of being, having done, etc, something specified.

Compare The Oxford English Dictionary. In s60, the word is, I think, apt to refer to “the recognition of the McCormick & Co marks by the public generally”.

Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public’s mistakenly attributing a business connection between the two or attributing her product to the company?

and Heerey J in Le Cordon Bleu B.V. v Cordon Bleu International Ltee[8] said that the reputation required to be demonstrated was:

one of which a significant number of persons were aware…What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient.

[8] [2000] FCA 1587; (2000) 50 IPR1.

21.  It is for me to determine therefore whether the opponent has established that before 19 September 2011 its trade mark(s) were recognized by the public generally, or at least by a significant number of persons in the coffee and coffee machine and accessory market, and whether because of that reputation the use by the applicant of its trade mark on the designated goods and services would be likely to deceive or cause the public confusion.

22. The opponent relies upon its use of the word NESPRESSO to establish the ground under section 60. I note from the evidence that NESPRESSO is used by the opponent in a number of different ways and in a number of different fonts. Below are copies from the evidence of the various forms in which the opponent has used its NESPRESSO trade mark:

NESPRESSO

23.  Considering the evidence as discussed earlier in my decision, there is little doubt that the opponent enjoys a very extensive and long standing reputation for its NESPRESSO branded goods internationally. However, the onus is on the opponent to demonstrate that a reputation in its NESPRESSO trade marks existed in Australia before the priority date of the opposed trade mark. This is more than merely demonstrating use before the priority date. The opponent’s trade mark needs to be “associated in the minds of the Australian public”[9].

[9] Seven Up Co v OT Ltd (1947) 75 CLR 203 at 211

24.  Since 1995 the opponent has extensively promoted its NESPRESSO branded goods and services throughout Australia via brochures, television, film, magazines, online publications and billboards (exhibits RT-4, RT-7, RT-10 to RT-25, RT-30 and RT-31). Paragraph 60 of the Tinel declaration contains a breakdown of the opponent’s advertising expenditure from 1996 until 2011. The figures provided are considerable and demonstrate an increase in advertising expenditure. These advertising efforts combined with its NESPRESSO branded goods and services being promoted through event endorsements and sponsorship deals including through becoming the Official Coffee of the 32nd America’s Cup makes it likely that a considerable number of Australian customers are aware of the opponent’s relevantly branded goods and services.

25.  Confidential exhibit RT-32 contains a breakdown the opponent’s sales figures of its NESPRESSO branded coffee capsules in Australia from 2002 until May 2010. The figures demonstrate that sales of NESPRESSO coffee capsules has significantly increased over the years and that many tens of millions of these coffee capsules have been sold within Australia during that time period.

26.  The opponent’s annual turnover and advertising expenditure for its NESPRESSO branded goods and services are significant, as are the number of Australian members for its NESPRESSO Club which numbers in the hundreds of thousands and the 15 years the business has been trading in Australia using its NESPRESSO trade mark on the relevant goods and services. I am satisfied that that the opponent has established the existence of a significant reputation in Australia for its NESPRESSO trade marks before the priority date of the opposed trade mark.

27.  I now need to determine if, given this reputation in Australia, use of the applicant’s trade mark would be likely to deceive or cause confusion. The question comes down to my being satisfied that there is a “finite and non-trivial” risk of deception or confusion[10]. The Registrar’s delegate in Reece Pty Ltd v Rogers Seller & Myhill Pty Ltd[11] observed that:

Confusion cannot arise solely from the reputation of one trade mark. There must always remain a level of similarity between the marks, whether we call it deceptive similarity or something less, and no matter how small it might be. The likelihood of confusion must depend on the reputation of the opponent's trade mark, but have regard (amongst other factors) to the level of similarity of the goods/services and the degree of similarity of the trade marks, greater or smaller.

[10] Registrar of Trade Marks v Woolworths Limited (1999) AIPC 91-499 at 36, 697-8 (per Justice French) and 39, 703-4 (per Justice Branson)

[11] (2010) 85 IPR 647

28.  Ms McGinn, representative for the opponent, argued that due to the opponent’s reputation consumers were likely to become confused between the trade marks based upon the commonality of features shared by the respective trade marks. Ms McGinn contended that:

“…consumers who see the INSPERESSO Mark, and who would be, as indicated by the opponent’s evidence in support, familiar with the opponent’s NESPRESSO trade mark, would be likely to wonder whether the INSPERESSO Mark is related to or connected with the opponent’s NESPRESSO Mark, the opponent and the opponent’s business, perhaps as a variation of the opponent’s goods and services or a play on the NESPRESSO mark. The commonality of the letters means that consumers may believe that the INSPERESSO Mark is intended to be a play on the NESPRESSO Mark, to mean “INSPIRED NESPRESSO”.  

29. In earlier submissions regarding the opponent’s ground of opposition under section 44 of the Act, Ms McGinn elaborated on the perceived similarities of the trade marks. She submitted:

“The Opponent’s evidence states that the prefix RESSO is a reasonably common suffix for trade marks used in relation to coffee related goods and services (paragraph 70 of the Tinel declaration). The Applicant’s evidence in answer lists four trade marks comprising the suffix RESSO (part 4 of the Marks declaration) which appear to refer to prior Australian trade mark registrations. The Opponent submits however, that it is not just the suffix RESSO that makes the INSPERESSO Mark similar to the opponent’s NESPRESSO trade mark, but that it is the combination of the suffix RESSO along with the commonality and combination of each other letter comprising the respective marks apart from the letter “I”…

…The opponent submits that the INSPERESSO Mark is likely to be pronounced by consumers as “nspresso”, leaving out the ER sound after the P and somewhat swallowing the “I” sound. Similarly, in pronouncing the word NESPRESSO, consumers may swallow the NES sound at the beginning of the word. Therefore, the opponent’s submits that it is quite possible that pronunciation of the INSPERESSO Mark and the opponent’s trade mark will be just as similar as the visual similarities, which the opponent submits are significant and make the respective trade deceptively similar.

Neither of the words NESPRESSO or INSPERESSO have any meaning in relation to the goods and services. They may allude to coffee goods and related services, having an association with the word “espresso”., however neither has a meaning that could be said to differentiate it from the other.”

30.  In respect of her contentions regarding the pronunciation of the respective trade marks, a judgment to provide direction on the issue is Rysta Limited’s Application[12], where Luxmoore LJ held at 108 that:

It is the person who only knows the one word, and has perhaps an imperfect recollection of it, who is likely to be deceived or confused. Little assistance, therefore, is to be obtained from a meticulous comparison of the two words, letter by letter and syllable by syllable, pronounced with the clarity to be expected from a teacher of elocution.

The court must be careful to make allowance for imperfect recollection and the effect of careless pronunciation and speech on the part not only of the person seeking to buy under the trade description, but also of the shop assistant ministering to that person’s wants.

[12] (1943) 60 RPC 87

31.  The opponent argued that the trade marks look similar, are pronounced similarly and convey the same association with “espresso” so that consumers are likely to become confused between the opponent’s NESPRESSO trade mark and the applicant’s INSPERESSO trade mark.

32.  When considering the similarities between the trade marks I note that the opponent’s NESPRESSO trade mark comprises of nine letters. The applicant’s INSPERESSO trade mark comprises of ten letters. The trade marks contain a number of visual and aural similarities which only serve to emphasise that, phonetically, it is probable that the trade marks would be pronounced similarly by the general monolingual Australian consumer. Both trade marks contain a number of visually and aurally similar elements ranging from the same two syllable suffix to the shared “N” and “SP” sounds located at the beginning of the trade marks.

33. I have carefully considered Mr Marks submission that careful and proper pronunciation of his INSPERESSO trade mark would sufficiently differentiate it from the opponent’s NESPRESSO trade mark. Mr Marks when onto submit that the applicant’s trade mark contains the two syllables “INSPER” at the beginning of its trade mark whereas the opponent’s trade mark begins with the syllable “NES”. I agree with Mr Marks that there are differences between the respective trade marks which preclude them from being considered deceptively similar under a section 44 ground of opposition. However, section 60 of the Act does not require that the trade marks be deceptively similar. In Pottle Productions Inc v Rute Ithalat Ve Ihracat Anonim Sirketi[13] the delegate observed that:

The assessment of the likelihood of deception or confusion under section 60 is informed by the strength of the reputation of the Opponent’s trade mark(s), the inherent distinctiveness thereof, the degree of similarity between the trade marks under consideration and the nexus or connection between the goods and/or services of the parties.

[13] [2012] ATMO 124 at [40]

34. Given the significant reputation of the NESPRESSO trade marks for coffee goods and services and the degree of similarity between the respective trade marks I am satisfied use of the applicant’s trade mark would be likely to cause confusion. Therefore, the opponent has established its ground of opposition under section 60. Having found in favour of the opponent in terms of section 60 there is no need for me to discuss the other grounds set out in the notice although this ground or any others in the Act may also be relied on in the event of an appeal from this decision.

Decision

35. Section 55 of the Act relevantly provides:

(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.

…

(3) This subsection applies to the proceedings if:

(a) the proceedings are discontinued; or

(b) the proceedings are dismissed…

36. I am satisfied that the opponent has established the ground of opposition under section 60, and accordingly I refuse registration of trade mark application 1447535.

Costs

37. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs, according to the official scale set out in Schedule 8 of the Trade Marks Regulations 1995, against the trade mark applicant Jason Marks.

Bianca Irgang
Hearing Officer
Trade Marks Hearings
10 January 2014