Societe Des Produits Nestle S.A. v Newmans Chocolates Ltd

[2004] ATMO 50

TRADE MARKS ACT 1995

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

Re:Opposition by Societe Des Produits Nestle SA to registration of trade mark application 813594(30) Milkbears proceeding in the name of Newmans Chocolates Ltd.

Delegate:

Ian Thompson

Representation:

Opponent
Written submissions by Simon Kneebone of Banki Haddock Fiora.
Applicant
June Savage of Baker &McKenzie.

Decision:

1.s52 opposition: sections 44 and 60 – trade marks not deceptively similar, opposition not established

2 Costs ordered against opponent.

Background

1. Newmans Chocolates Ltd ('the applicant') of Hampshire, United Kingdom, has filed application to register a trade mark, current details of which are:

   App No:  813594
   Filing Date:  12 November 1999
   Acceptance Date:  6 June 2002

   Services:Class: 30 Confectionery including candy, chocolate, chocolate candies; pastries in class 30

   Trade Mark:  Milkbears

2. On 5 September 2002, Societe Des Produits Nestle SA ('the opponent') of Veyey, Switzerland, filed Notice of Opposition (‘the Notice’) to the registration of the trade mark. The Notice cites grounds including, inter alia, those under sections 44 and 60 of the Trade Marks Act 1995, (‘the Act’) relied on in the opponent’s submissions.  For the sake of completeness, I note now that those other grounds relied on by the opponent have not been established.

3. The Notice cites three Nestle registrations in terms of section 44, these being:

   Appn Number  405460
   Priority date:  20 March 1984

   Goods/Services:  Class: 30 White chocolate and other white chocolate-like confectionery

   Trade Mark:  MILKY BAR (two words)
   Endorsements:  The provisions of Section 26(3) applied.

   The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.

   Appn Number  612365
   Priority date:  27 September 1993

   Goods/Services:  Class: 30 Confectionery; biscuits containing or coated with white chocolate or a white chocolate-like substance; desserts in this class containing or having the flavour of white chocolate

   Trade Mark:  MILKY BAR (two words)

   Appn Number  756180
   Priority date:  3 March 1998

   Goods/Services:  Class: 30 Confectionery, white chocolate; biscuits containing or coated with white chocolate or a white chocolate-like substance; desserts in this class containing or having the flavour of white chocolate, ice cream and preparations for making ice cream

   Trade Mark:  MILKYBAR (one word)

4. A hearing was held before me in Sydney on 20 July 2004.  June Savage of Baker & McKenzie represented the applicant; Simon Kneebone of Banki Haddock Fiora did not appear but filed written submissions before the hearing which were relied on by the opponent.

   Evidence

5. The parties have served and filed the following statutory declarations as their evidence in support and evidence in answer in relation to these proceedings:

Declarant	Position Known as	Date Made	Exhibits
Evidence in Support
Donna Margaret Bessell	Trade Marks Officer Opponent ‘Bessel’	9 January 2003	DMB-1 to DMB-6 and CDMB-1 to CDMB-2
Geoffrey Kiel	Professor of Management ‘Kiel’	28 February 2003	Gk-1 to GK-2
Evidence in Answer
Ann Jean Beckenham	Trade Mark Attorney Baker & McKenzie ‘Beckenham”	4 September 2004	AB-1 to AB-3
Roderick John Brodie	Professor of Marketing ‘Brodie’	1 October 2003

Bessell

1. Ms Bessell attest that she has been in the opponent’s employ for 17 years and has held the position of Trade Marks Officer with the opponent for 13 years.

2. The opponent company was founded in 1866 and commenced trading in Australia in 1908.  The opponent trades in most countries of the world as a diversified food and beverage company.

3. In 1936, the opponent first used the trade mark MILKYBAR in the United Kingdom in relation to white chocolate confectionery.  Ms Bessell states that confectionery under the trade mark MILKYBAR was first sold in Australia in the mid 1960s – Nestle Australia Ltd being, I gather, the authorised user of the trade mark.  The trade mark is used (by the opponent or its authorised user) in relation to a number of white chocolate confectionery products which include blocks, ‘coins’, biscuits and cookies. 

4. I think that it is fair to say that the majority of the use to date has been in relation to the 50 gram blocks of white chocolate.

5. The evidence shows that the opponent uses two related trade marks: MILKY BAR (two words) and MILKYBAR (one word).  The trade mark MILKY BAR (two words) invariably appears on the front of the 50 gram blocks of white confectionery sold under the trade mark.  The larger, 180 gram, blocks of chocolate which show a trade mark as the one word MILKYBAR went on sale in Australia in 1999 (at, or after, the priority date of the registration).  The dates at which the opponent used the trade mark MILKYBAR in relation to its biscuit and cookie products are not clear but would seem to be comparatively recent.

6. Ms Bessell gives confidential sales and advertising figures in relation to what he designates as the MILKYBAR trade mark.  These figures fall somewhere between ‘moderate’ and ‘considerable’ in my estimation.

   Keil and Brodie

7. The Keil and Brodie declarations are from two expert witnesses – professors who study marketing and who, on behalf of the parties, provide diametrically opposing views of the likelihood of deception or confusion which might rise from the concurrent use of the trade marks and why this should, or should not, occur.  Keil also deposes to the reputation of the opponent’s MILKYBAR trade mark.  Both of these gentlemen are well qualified to be expert witnesses and their lines of reasoning are measured and persuasive but not, of course, relevant as far as the likelihood of deception or confusion is concerned because the confectionery market is not a special one[1]: it is one in which the general public participates.  It is not necessary that I prefer either one to the other and, in the end, the decision as to the likelihood of deception or confusion is one that I must make.  Accordingly, I weight these declarations commensurately to these observations in my considerations, below.

   [1] See comments in C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539.

8. Ms Beckenham is Trade Mark Attorney for the applicant.  She provides copies of the decisions of the Singapore and New Zealand Trade Mark Offices in the equivalent oppositions to the registration of the trade mark Milkbears in those offices.  In both cases, oppositions by the current opponent were unsuccessful.  Ms Beckenham also provides print-outs of searches of the Australian Trade Marks Office database of trade marks showing the frequency of the occurrence of the words MILK or MILKY and BAR as parts of trade marks.  The searches show that the words MILK and BAR are relatively common within trade marks registered for confectionery.

   Comment

9. The opponent states that I should not place reliance on the Brodie or Beckenham declarations as the declarants refer to the opponent’s trade mark as MILKY BAR (two words).  However, the evidence shows that this is how the opponent frequently uses the trade mark: on the 50 gram bars whether sold individually or in ‘fun packs’, the trade mark is invariably used as the two words MILKY BARS.  Two of the opponent’s three Australian registrations are of the two words MILKY BAR.  This inconsistency in the use of the opponent’s trade mark is also incidentally inconsistent with the comments in Kiel that, “a brand only becomes credible through endurance and consistency.” 

10. Professor Kiel refers only to the opponent’s trade mark MILKYBAR in his declaration and it is not obvious how his comments would have changed if he had been briefed to consider both of the opponent’s trade marks.  Certainly, the conjoining of the two words appears to have been a relatively late development (the 150 gram blocks on which the conjoined word MILKYBAR is used as a trade mark were introduced in 1999), so it is not clear whether his opinion of the reputation of the MILKYBAR trade mark should be read as also applying to the MILKY BAR trade mark.

11. The fact that the applicant uses the trade marks in these two differing ways thus introduces some uncertainty about how I should assess the reputation of the opponent’s trade marks.  The ‘credibility’ and ‘reputation’ referred to in Kiel are not, of course, the same things, although the former might be a component of the latter.  It will therefore also be necessary to decide whether use of the trade mark MILKY BAR (two words) and the use of the trade mark MILKYBAR (one word) are necessarily one and the same in considering the reputation of the opponent’s trade marks should that become necessary.

12. It is thus of some concern to me that in the process of opposing the trade mark Milkbears, which is one word, the opponent places a heavy reliance on its own perceptions that it invariably uses (and has registered) its trade mark MILKYBAR as one word, when, in reality, the use of conjoined word by the opponent appears to be rather more limited.

13. The opponent states that the law surrounding the decisions of the New Zealand and Singapore Registrars occurred in relation to oppositions filed in different jurisdictions.  However, I note that the New Zealand decision occurred where the use and registration of the opponent’s trade marks are in a similar market environment to Australia’s with apparently equivalent amounts of use and promotion of its trade marks.  The New Zealand decision also occurred under the equivalent of the Australian Trade Marks Act 1955 (‘the old Act’) where the onus was on the applicant to establish that its trade mark would not confuse or deceive[2]; however under the Australian Trade Marks Act 1995, the onus is on the opponent to show that the applicant’s trade mark would be likely to confuse or deceive.  Thus, the New Zealand opposition was unsuccessful in an environment where the ‘high bar’ as regards registration for the applicant’s trade mark was higher than it is in Australia.  The decision is thus at least suggestive but not binding.

    [2] Eno v Dunn (1990) 7 RPC 311

    Rationale

14. I will approach this decision from the point of view that, as the opponent has trade mark registrations which are non-identical to the opposed trade mark which predate the filing date of this application and the goods are to all purposes identical, all that I am to consider within section 44 is whether the trade marks are deceptively similar. This involves the comparison of both the opponent’s MILKY BAR and MILKYBAR trade marks to that of the opponent.

15. The initial hurdle for the opponent in terms of section 60 is to establish that its trade marks have a reputation. The situation is exacerbated by the fact that the opponent has two different trade marks MILKYBAR and MILKY BAR which it uses. The opponent’s written evidence uniformly refers to its trade mark as being MILKYBAR. However, the evidence viewed as a whole shows that the use of the trade mark MILKYBAR is a relatively recent innovation and that the majority of the use of a trade mark in relation to white chocolate confectionery by the opponent has been on 50 gram bars where the trade mark is MILKY BAR shown in the orientation:

    MILKY

    BAR

16. If the difference between these trade marks of the opponent is a substantial one, any reputation which has been acquired by a trade mark has been acquired by the two words MILKY BAR.

17. Mr Kneebone, for the opponent, throughout his submissions, including those that related to section 60, refers to the opponent’s trade mark MILKYBAR and submitted that, “The trade marks comprise single words.” And, “The respective trade marks should not be broken down into composite parts, but considered as a whole.” It is thus apparent that the opponent itself believes that the difference is a significant one and if I follow the course suggested by the opponent, I must come to the conclusion in terms of section 60 that the opponent’s MILKYBAR trade mark on which it exclusively relies, does not have a reputation.

18. The above observations also, obviously, feed into the comparison of trade marks as regards section 60. If reputation exists only within the MILKY BAR trade mark, that is the one which should be compared to the applicant’s trade mark.

    Reasons

19. Relevant to this matter, sections 44 and 60 respectively provide:

    Identical etc. trade marks

    44.(1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of goods (applicant's goods) must be rejected if:

    (a) the applicant's trade mark is substantially identical with, or deceptively similar to:

    (i) a trade mark registered by another person in respect of similar goods or closely related services; or
    (ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

    (b) the priority date for the registration of the applicant's trade mark in respect of the applicant's goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

    Note 1:  For deceptively similar see section 10.

    Note 2:  For similar goods see subsection 14(1).
    Note 3:  For priority date see section 12.

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

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

    (a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had 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 1:  For deceptively similar see section 10.

    Note 2:  For priority date see section 12.

20. Sections 44 and 60 both provide for consideration of whether the trade marks in question are deceptively similar. ‘Deceptive similarity’ is defined with section 10 of the Act:

    10  Definition of deceptively similar

    For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

21. The expression ‘deceive or cause confusion’, used within section 10, was discussed in Registrar of Trade Marks v Woolworths [1999] FCA by French J. At paragraph 50 he said:

    In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-5, which concerned the 1905 Act, Kitto J set out a number of propositions which have frequently been quoted and applied to the 1955 Act. The essential elements of those propositions continue to apply to the issue of deceptive similarity under the 1995 Act. Applied also to service marks and absent the imposition of an onus upon the applicant they may be restated as follows:

    (i) To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring. A mere possibility is not sufficient.

    (ii) A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.

    It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.

    (iii) In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.

    (iv) The rights of the parties are to be determined as at the date of the application.

    (v) The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained.

    In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v The Bali Company Inc (1973) 129 CLR 353 at 362:

    "...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion."

22. Concerning the comparison of trade marks, Dixon and McTiernan JJ in Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641, at page 658, say:

    In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same. The effect of spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part. The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected.

23. The “impression or recollection which is carried away and retained”, referred to above, include the effects of any ‘imperfect recollection’ of the trade mark: Aristoc Ltd v Rysta Ltd [1945] AC 68.

24. And the comparisons take place within the context of the marketplace for the goods in question: Lord Parker (then Parker J) in Re Application by the Pianotist Co Ltd (1906) 1A IPR 379 at 380; 23 RPC 774 at 777, said:

    You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion -- that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods -- then you may refuse the registration, or, rather, you must refuse the registration in that case.

25. And Windeyer J in Shell Company of Australia Co Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407, 414 (reversed on appeal but not on this principle) said:

    In considering whether marks are substantially identical they should, I think, be compared side by side their similarities and differences noted and the importance of these assets having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison.

26. Mr Kneebone submitted that the perceived similarities between trade marks of the parties are greater when the trade marks are rendered in the same fonts and provides examples in his submissions.  However, what I am consider is the likely effects if the trade marks are used in a ‘normal way’ as per Pianotist, above, or ‘in a fair and normal manner’ as per the following from Re Smith Hayden and Co's Application (1946) 63 RPC 97 at 101.8:

    Assuming a use by the proprietor of each of the cited trade marks in a normal and fair manner in respect of any of the goods and services covered by those registrations, is the court satisfied that there will be no reasonable likelihood of deception and confusion amongst a substantial number of persons if the applicant for registration (the respondent to this application) also uses its mark normally and fairly in respect of services covered by the proposed registration.

1. The use of an imitative script by the applicant quite obviously would be beyond the bounds of what constitutes ‘fair and normal’ use.

2. I am therefore to consider:

   ·The trade marks not side by side

   ·Used in a fair and normal manner

   ·Whether they have an essential feature

   ·The idea of the trade marks

   ·The trade marks as wholes

   ·The effects of imperfect recollection

   ·Within the relevant market

   ·Taking account of the surrounding circumstances

3. Mr Kneebone submitted that a large part of the market for the opponent’s goods are children.  The point being that children are unevolved consumers and might be more readily confused or deceived.  However, the opponent’s trade marks here are simple words which are readily understood, whether they be one word or two: MILKYBARS or MILKY BARS.  I am certain that by the time most ordinary children are old enough to have become ‘consumers’ they are aware of the difference between ‘bars’ and ‘bears’.  Bears appear to feature prominently in nursery rhymes and stories, teddy bears are common nursery accoutrements and indeed feature in the learning of language in ABC books, “A is for Apple, B is for Bear, etc”.  Children are well acquainted with the concept of ‘bear’.  Thus, while I take into account the fact that a part of the market for the goods in question is children, I place no great weight on this.

4. The word ‘milk’ or ‘milky’ has some utility in relation to the goods of the parties.  ‘Milk’ chocolate is made by many traders and the applicant’s evidence shows that this is reflected on the Register of Trade Marks.  The point being that consumers do not view descriptive matter as distinguishing between goods and look for other factors which do distinguish when making their purchases.  Additionally, the applicant’s evidence shows that the word ‘bar’ also occurs frequently on the Register of Trade Marks.  The words ‘bar’ and ‘block’ appear (in my observations of the world) to be used more or less interchangeably to describe the oblong shape in which some confectionery is sold. 

5. Thus, when one looks for an essential feature within the opponent’s trade mark, one is forced to the conclusion that there is none.  The trade mark is composed of comparatively weak trade mark matter and derives its strength only through use and acquired distinctiveness of the whole.  This is the source of the ‘endorsement’ on the opponent’s first registration of the trade mark MILKY BAR: the trade mark was registered on evidence of use by the authorised user of the trade mark.  One the other hand, the world ‘bear’ appears to have no immediate facility in relation to the applicant’s goods, any more than would the words ‘moon’ or ‘unicorn’.

6. Thus in the comparison of the trade marks, the opponent’s trade marks must be considered as wholes, whether as MILKYBAR or MILKY BAR: they form a corporate identity where the purchaser relies exclusively on the recognition of the whole.  On the other hand, the applicant’s trade marks has an immediately recognisable and distinctive essential feature, the word ‘bears’.

7. Thus, I think, it immediately follows from the above conclusion that the ideas of the trade marks are quite different.  The opponent’s trade marks, taken literally, in relation to the goods, immediately conjure up an idea of a bar or block which is milky.  The applicant’s trade mark, similarly considered, conjures up an image of a confectionery bear comprised of milk.  It is an incongruous image and entirely unalike that brought to mind by the opponent’s trade marks.

8. These above factors do, I think, dispel any concerns that the trade marks of the parties might be imperfectly recalled and be mistaken for each other. 

9. The trade marks MILKY BAR and MILKYBAR are not deceptively similar to the trade mark Milkbear and the opposition, founded as it is on section 44 and 60, cannot therefore be established.

10. It is not necessary, therefore, for me to determine whether the opponent’s trade mark MILKY BAR or MILKYBAR has, or have, a reputation and whether this trade mark lies in both or either.  Whatever the reputation that resides in the trade mark(s) of the opponent, the trade marks of the parties are not deceptively similar.

11. I will further note that it is apparent from the opponent’s evidence and submissions that it has concerns that arise from its perceptions that the applicant might engage in either imitative marketing or copy-packaging of its goods – these factors combined with the superficial similarities of the trade marks would, in the opponent’s hypothesis, give rise to confusion or deception.  Imitative marketing, per se, is not necessarily misleading or deceptive: Cadbury Schweppes Pty Ltd v Pub Squash Pty Ltd [1980] 2 NSWLR 851 although imitative packaging may well be: Red Bull Australia Pty Limited v Sydneywide Distributors Pty Limited [2001] FCA 1228. However, these factors are outside the ambit of my considerations, these being limited to the trade marks as registered and filed for registration, used in a fair and normal manner.

    Decision

12. Section 55 of the Act provides:

    55. Unless the proceedings are discontinued or dismissed, 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.

13. The opponent has not established either of its grounds of opposition.

14. Subject to the opponent notifying the Registrar of filing an appeal against my decision within one month of the date of this decision, the application may proceed to registration.  If such appeal is notified and not withdrawn, the application should be dealt with as the Court directs.

    Costs

15. The parties sought their costs should they be successful in these proceedings.  Costs may follow the event and I order costs against the opponent at the official scale.

    Ian Thompson
    Hearing Officer
    Trade Marks Hearings
    30 August 2004