South Cone, Inc v J and S Shi Trading Co Pty Limited

[1999] ATMO 122

TRADE MARKS ACT 1995

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

RE:Opposition by South Cone Inc. to registration of trade mark application number 735300(25) - REEF ISLAND and device - in the name of J and D Shi Trading Co Pty Limited.

Background

J and D Shi Trading Co Pty Limited (the applicant) filed the above numbered application, as represented below, in respect of, 'Clothing, T-shirt, polo-shirt, windcheater' on 27 May 1997.

Following some clarification of the applicant's goods of interest during the process of examination of the application, it was advertised as accepted in the Australian Official Journal of Trade Marks of 11 December 1997, in respect of 'Clothing, T-shirts, polo-neck shirts, close-fitting garments for wind protection' in class 25.

South Cone Inc. (the opponent) filed a notice of opposition on 10 March 1998. This notice specified grounds relating to s.41, s.42(b), s.44, s.58, s.59, s.60, s.42(a), s.43, s.62(b), s.62(a), s.61 and s.39 of the Trade Marks Act 1995.

The evidence in support, answer and reply was filed and served by 8 June 1999. The opponent then requested to be heard in the matter. The applicant, through its agent, informed this Office that it intended to rely on the written material held within the Trade Marks Office, whilst the opponent chose to appear by telephone. The matter came before me, as a delegate of the Registrar, on 23 September 1999. Ms Anne Makrigiorgos of the Melbourne Office of Griffith Hack, Patent and Trade Mark Attorneys, appeared via telephone for the opponent.

The Evidence

The evidence in support of the notice of opposition consisted of a single Statutory Declaration. This declaration from Fernando Aguerre (the Aguerre declaration) was made on 15 June 1998, with attachments 'FA-1' to 'FA-34' inclusive. Mr Aguerre is President of the opponent company. In his declaration, Mr Aguerre attests to the opponent's use of both REEF and REEF BRAZIL trade marks, providing detail of the goods involved, the scope of the advertising undertaken, participation in trade shows and involvement in sponsorships. The Aguerre declaration also includes details of the opponent's trade mark registrations, sales figures and advertising expenditure for goods sold under the REEF mark in Australia and samples of promotional and advertising material for both REEF and REEF BRAZIL marks. This declaration concludes with a listing of the opponent's Australian distributors, worldwide sales figures under the REEF mark, a list of countries where the opponent carries on business, and a worldwide list of the opponent's REEF and REEF BRAZIL trade marks.

The evidence in answer also consisted of a single Statutory Declaration. This declaration from Richard Frank Agnew Wills (the Wills declaration) was dated 8 February 1999. Mr Wills is employed by Moody Rossi & Co, solicitors for the applicant. Mr Wills declares as to the history of the applicant company, including information concerning the present trade mark and their goods of interest. He then goes on to detail his investigations into the opponent's business via trade outlets in the Adelaide area, including use of both of the opponent's REEF and REEF BRAZIL trade marks and the goods for which those marks were used. Mr Wills claims that he could not find use of the opponent's marks on any goods other than footwear. He also argues that REEF is not a registrable mark in terms of s.41 of the Act.

The opponent's evidence in reply consisted of three Statutory Declarations. The first of these documents, together with exhibit 'DNM 1', was from David N Makous, world trade mark counsel for the opponent, declared on 5 May 1999 (the Makous declaration). The substance of this declaration sought to counter the Wills declaration, particularly with information on the registration of the REEF trade mark, in Australia, in classes 18, 25 and 28 from 1995.

The second declaration in the opponent's evidence in reply was made by Roderick John Barr, a Director of Reef Brazil (Australia) on 5 May 1999 to which were exhibited 13 attachments (the Barr declaration). This declaration lists the trade mark registrations for the opponent, and provides great detail regarding the use of the opponent's marks, including sales figures in Australia for the use of the opponent's REEF trade mark on t-shirts, rash vests, socks, refrigerator magnets, stickers, backpacks, key rings and caps.

Ms Anne H. Makrigiorgos, attorney for the opponent, attested the final declaration from the opponent in the evidence in reply, on 2 June 1999 (the Makrigiorgos declaration). This declaration, together with its five exhibits, details the definition of the word 'REEF' in various dictionaries in order to counter the applicant's argument that the word, alone, is descriptive of a geographical location and is not registrable in terms of s.41 of the Act.

Submissions

As I mentioned earlier, the applicant chose to rely on the evidence submitted and was not represented at the hearing.

Ms Makrigiorgos opened her submissions with a statement that the opponent only intended to pursue two grounds, those under s.44 and s.60 of the Act, as outlined in the notice of opposition. She then discussed the evidence of both parties, attacking the applicant's evidence in answer, and asserting that paragraphs 9-14 inclusive of the Wills declaration was merely hearsay evidence.

In terms of s.44, Ms Makrigiorgos argued, by reference to previously decided cases, that the applicant's goods were similar to the goods of the opponent's registrations, and that, because the opponent had the earlier priority date, the only matter to be determined hinged on the similarity of the respective trade marks. She then looked at the standard tests for determining the similarity of trade marks and some further decided cases to support her contention that the applicant's mark and the opponent's marks were deceptively similar. Ms Makrigiorgos also stated that the burden of proof lay with the applicant to satisfy the Registrar that deception or confusion would not occur if the application gained registration. A further submission from the attorney involved comments that the word REEF is not 'common to the trade' for classes 18, 25 and 28, and thus the opponent had legitimate rights in the use of the word that the present application, if registered, would disturb. She concluded her comments under s.44, pointing out that the device element in the applicant's mark was not a significant distinguishing feature between the marks because of the opponent's eight registrations - only one had a rectangular border device whilst the other seven were for words only.

In terms of s.60, Ms Makrigiorgos firstly pointed to the opponent's substantial reputation. She followed this up with the comment that, if the public could have even a vague impression that the opponent has sanctioned use of the mark by the applicant, or licensed it in some way, then this would be sufficient to keep the mark off the Register. To support this contention, the attorney directed me to the following words of Dixon J in the High Court judgement for RadioCorporation Pty Ltd v Disney and Others (1937) 57 CLR 448 at 457.

The reason for using the names is to attract the attention of members of a public that has found pleasure and amusement in the grotesque forms and absurd antics of Disney's creatures, and at the same time to give to the goods a name or means of description at once familiar and pleasing or interesting to the possible buyer. No doubt this means that the trader makes use of elements which belong to the reputation and fame of Disney's creations and it may be that in some vague way the buyer supposes that Disney must have sanctioned it.

Ms Makrigiorgos concluded her submissions with a request for costs.

Discussion

As I mentioned in the Background section on page one of these reasons, the notice of opposition claimed 12 separate grounds under the Act. Only two of these grounds, those under s.44 and s.60, however, were argued at the hearing. There being no evidence or submissions before me concerning the other ten grounds listed in the notice of opposition, I find that, in respect of those grounds, the opposition is not successful. I now turn to the two sections under the Act for which submissions were made at the hearing.

(a) Section 44 - Identical etc. trade marks

The legislation concerning this ground of opposition, insofar as it is relevant here (the present application being in respect of goods rather than services), reads as follows:

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 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.

To succeed with opposition action under s.44, in the present instance, the opponent would need to show that it had an earlier registration or application for a trade mark, which is either substantially identical or deceptively similar to the applicant's mark, in respect of either similar goods or closely related services to the present application.

The opponent, at the hearing, contended that the onus lay with the applicant to satisfy the Registrar that the mark ought to be put on the Register.

On this claim concerning the onus, some changes have emerged in the application of standard tests concerning suitability for a mark to be placed on the Register when comparing marks in terms of s.44. As outlined by French and Tamberlin JJ, in Registrar of Trade Marks v Woolworths, [1999] FCA 1020 at 45, the onus under the present Act does not mirror the onus under the 1955 legislation. Justice French comments at 45:

Somewhat surprisingly the submissions made by the Registrar before this Court posited a test which imported the old law as to onus.

He then outlined the well known test for deception or confusion, as applied when considering s.44, from Smith Hayden& Co Ltd's Application (1946) 63 RPC 97 and added the following commentary:

So far as this passage, reflected in oral submissions, suggests that an applicant must satisfy the Registrar or the Court that there will be no reasonable likelihood of deception or confusion it does not represent the law as it stands under the 1995 Act. The position now is that the Registrar and the Court at first instance would need to be satisfied that there was a reasonable likelihood of deception or confusion before denying acceptance of the application for registration.

French and Tamberlin JJ concerning s.44 seem to be saying that this likelihood needs to be shown prior to acceptance of an application. Clearly, this position indicates that the Registrar would need to be convinced that it was reasonably likely that deception or confusion would occur rather than place an onus on the applicant to explain why it would not occur. This is consistent with the so called 'presumption of registrability' outlined in s.33(1) of the Act. From this background it would be quite inconsistent to then apply a reverse onus after acceptance in an opposition matter.

In opposition, the issue of onus is impacted by s.55 of the Act. This section reads:

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.

From this section, it is clear that in opposition matters a ground must, logically, first be established by the opponent before the onus shifts to the applicant to provide a counter to the objection. Accordingly, I must first consider the opponent's evidence and submissions to see if a ground is established, before I need to consider the applicant's evidence or submissions.

The opponent sought to rely on several of its own registrations to support the opposition under s.44. These are two families of marks featuring the words REEF and REEF BRAZIL. The REEF trade marks are numbered 651542(25), 663507(18) and 663508(28). The REEF BRAZIL family of marks is numbered 484626(25), 565847(25), 643028(25), 663509(18) and 663510(28).

The present application was filed on 27 May 1997. All of the eight above marks enjoy a date prior to this for their registrations, the latest one being 9 June 1995. They therefore satisfy the criterion of priority listed in s.44(1)(b).

The goods claimed for the present class 25 application are 'clothing, t-shirts, polo-neck shirts, close fitting garments for wind protection'. Four of the opponent's registered marks above are also in this class covering the listed goods as follows.

NUMBER	TRADE MARK	REGISTERED GOODS
484626	REEF BRAZIL	Footwear, including sandals.
565847	REEF BRAZIL and device series mark (depicted below).	Clothing in this class.
643028	REEF BRAZIL	Clothing in this class excluding hosiery.
651542	REEF	Clothing excluding wetsuits; footwear and headgear.

Given that the present application claims 'clothing' and the opponent's registrations 643028 for the mark REEF BRAZIL and 651542 for the mark REEF both claim a sub-set of clothing, some of the goods claimed by both parties are identical.

As the opponent's REEF and REEF BRAZIL marks, numbered 651542 and 643028 respectively, have a priority date before the date of the present application and also contain some identical goods as those claimed by the applicant, viz. 'clothing', two of the three legs of s.44 have been met. The remaining consideration centres on the similarity of the respective trade marks.

In her submissions on behalf of the opponent, Ms Makrigiorgos asserted that the applicant's mark and the opponent's marks were deceptively similar. She provided a number of decided cases to support her arguments and several further points of reasoning to assist the opponent's case.

In relation to confusion or deception produced by deceptive similarity of trade marks, Ms Makrigiorgos identified the standard tests[1] by which assessment should be made, argued that a prospective purchaser's imperfect recollection[2] of one of the marks to be compared must be considered, submitted that the confusion or deception may be produced by any means and need not be considerable,[3] and asserted that greater emphasis of comparison should be placed on the first part[4] of a word.

To decide the question of deceptive similarity of two competing trade marks, the starting point rests in the definition from the Act, at s.10. This definition reads:

[1] Smith Hayden & Co Ltd's Application (supra), Australian Woollen Mills Ltd v F S Walton &Co Ltd (1937) 58 CLR 641, Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407.

[2] Rysta Ltd's Application (1943) 60 RPC 87

[3] John Fitton & Co Ltd's Application (1949) 66 RPC 110

[4] London Lubricants (1920) Ltd's Application (1925) 42 RPC 264

10. 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.

The comparisons that I must make to test if deception or confusion is likely are in respect of: (i) the applicant's REEF ISLAND and DEVICE v the opponent's REEF trade mark, and (ii) the applicant's REEF ISLAND and DEVICE v the opponent's REEF BRAZIL trade mark.

I will again reproduce the present application for ease of comparison.

(i) REEF ISLAND and DEVICE v REEF

The opponent did not argue that the respective marks of the applicant and opponent were substantially identical, merely that they were deceptively similar. I am in agreement with Ms Makrigiorgos that the familiar test for deceptive similarity is outlined in Shell Co. (Aust) Ltd, supra, at 415:

On the question of deceptive similarity a different comparison must be made from that which is necessary when substantial identity is in question. The marks are not now to be looked at side by side. The issue is not abstract similarity, but deceptive similarity. Therefore the comparison is the familiar one of trade mark law. It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's television exhibitions.

I also agree that the doctrine of imperfect recollection must be considered as referenced in Rysta Limited's Application, supra, 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.

From this material, I must consider whether the production of any deception or confusion is not a mere vague possibility but has some real, tangible probability. Where one trade mark is entirely subsumed within another, the surrounding circumstances must be weighed in each case. No single 'rule' will cover all possible variations. In such circumstances, sometimes the situation will lead to the production of deception or confusion quite obviously and sometimes the situation will lead to only a remote possibility of deception or confusion.

One submission from Ms Makrigiorgos centred on the device element in the applicant's mark. She claimed that the device element in the applicant's mark was of little assistance in separating the marks, because the opponent's registrations lacked any device element by which the marks could be compared and differentiated.

I find that I am in some agreement with Ms Makrigiorgos on this point. Where one mark contains both a word and device, and another mark contains a word only, the comparison of the respective words must form the critical part of the test for similarity. It is common for traders to use trade marks that contain a word, both with, and without a device element. The general public has become used to such an approach by manufacturers and, in these times, readily expects it. Thus, where only one mark to be compared has a device element, that element is of some assistance to differentiate the marks but such ability is limited.

Ms Makrigiorgos submitted that, in dealing with deception or confusion, it could occur by any means - visual, phonetic, contextual, or even by deception or confusion as to the trade provenance of the goods, as referenced in John Fitton, supra, at 113. Visually, I believe that the marks are quite different. One is a single word REEF, whilst the other is two words, REEF ISLAND and a device of the sun behind a lagoon with a palm tree in the foreground.

Phonetically, too, the marks are quite different. I cannot readily imagine a situation where the single word REEF or the two words REEF ISLAND could be so badly misheard or mispronounced that one could be mistaken for the other.

For contextual confusion the principle is described in John Fitton, supra, at 113 where Mr S. E. Chisholm, the Assistant-Comptroller, commented:

With reference to the nature of the confusion alleged the evidence furnished on behalf of the Opponents by their trade declarants is directed not so much towards showing that the two marks 'Jests' and 'Easyjests' might themselves be confused either visually or orally, as towards establishing that confusion would result, owing to the presence of the common element 'Jest' in each mark, in traders and the public being induced to believe that the two sets of goods sold under the marks emanated from one and the same trade source.

This type of confusion is easy to imagine where the mark that subsumes the other is a mere 'extension' of the initial mark. Where one mark could be formed by adding a part word which has a descriptive connotation for the goods (for example, REEF and REEFKIDS), or by adding a part word which merely suggests a particular line of the same goods (for example, REEF and REEF20'S). This same concept may produce a difficulty for word trade marks that lack a direct dictionary meaning (for example ZETA and ZETARO). However, where the respective dictionary meanings enable an 'idea' to be associated with the marks to be compared, then that has the effect of distinguishing them more readily in the minds of prospective purchasers.

The opponent submitted that the present opposition matter was similar to that where Senior Assistant Registrar Hancock refused registration of PERMALUX in the face of PERMA, Expanded Metal Co Ltd v Finn Blinds (1986) AIPC ¶90-305. However, I would distinguish that decision from the present case. Firstly, both of the marks PERMA and PERMALUX consist of only one word whereas the present opposition requires a comparison of one word, REEF, with a composite trade mark containing two words REEF ISLAND. Secondly, the word PERMALUX does not have a dictionary meaning, and even PERMA only arguably has a meaning via its use as a recognisable prefix, whereas both REEF and REEF ISLAND provide clear meanings from common language use and the dictionary definitions of the words involved.

PERMA and PERMALUX are marks that carry very little associated meaning with them, in relation to the goods on which they were used or were to be used. The goods of both parties were blinds, differentiated only by the materials from which they were made. In such a circumstance, where there is little by way of concept or idea in the marks, then in my opinion, it is more likely that the marks will be imperfectly recollected and confused. In the present circumstances, the word REEF has many meanings. These include use as a noun as portion of a sail, a narrow ridge or chain of rocks or sand lying at or near the surface of the water and a lode or vein of auriferous quartz. The word is also used as a verb with several meanings. All of these meanings will conjure up an idea or concept in the minds of those who see the trade mark. The most likely picture, in my opinion would be in relation to 'a narrow ridge or chain of rocks or sand lying close to the surface of water'. However, for those nautically inclined, the portion of a sail may have more meaning. The various concepts that lie in the minds of individuals who observe the mark REEF must be measured against the REEF ISLAND mark.

The applicant's mark, to my mind, produces a quite different idea. The concept conjured up is that of an island, a reef island. This is reinforced visually by the device and by the lettering of the word ISLAND being in a considerably larger font than the word REEF in the mark. The device of the PALM TREE on dry land in the foreground, with water in the middle ground, adds to the 'island' theme of the mark.

In general, the different ideas produced by these marks, to my mind, is sufficient for the wider population to recognise that the respective marks originate from different entities.

Even if the marks are simply compared phonetically, I am of the opinion that they are not going to be confused. The opponent submitted that the principle from London Lubricants, supra, should be considered. At 279 of that judgment, Sargent LJ states:

But the tendency of persons using the English language to slur the termination of words also has the effect necessarily that the beginning of words is accentuated in comparison, and, in my judgment, the first syllable of a word is, as a rule, far the most important for the purpose of distinction.

In the present instance, the applicant's mark contains two words whereas the opponent's REEF mark consists of just one word and the above passage would not literally be applicable. However, I am of the opinion that even if I did think that the slurring of the words could produce a problem, that any individual would be aware that something more than simply the word REEF was heard if, in fact, REEF ISLAND was mentioned.

This particular argument, on the slurring of suffixes of words, may have greater credence in relation to the opponent's REEF BRAZIL trade mark where both the applicant's mark and the opponent's mark contain or consist of two words.

In summary, I find that the applicant's REEF ISLAND with device mark and the opponent's REEF mark are not deceptively similar.

(ii) REEF ISLAND and DEVICE v REEF BRAZIL

Even given the situation involving the slurring of suffixes of words, I do not accept that the words REEF ISLAND and the words REEF BRAZIL are sufficiently similar to be misheard one for the other. In my view, the first part of the phonetics for 'island' and for 'Brazil' are so different that it is difficult to imagine how confusion between the words could occur unless a speaker set out to deliberately mislead by lowering his or her voice, or by similar means.

The material discussed above, concerning the differences between the opponent's REEF trade mark and the present application, are even more marked when considering the differences between REEF BRAZIL and the present mark. I do not believe that the prospect of deception or confusion between the marks REEF ISLAND and REEF BRAZIL, whether visual, phonetic or contextual is of a sufficient likelihood to accept that it is a real, tangible risk.

Thus, I find that the presently applied for mark is not deceptively similar to the opponent's mark, REEF BRAZIL.

As I have found that the applicant's mark is not deceptively similar to the opponent's REEF and REEF BRAZIL marks, the opposition, in terms of s.44, is not successful.

(b) Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

The remaining ground argued by the opponent falls under s.60 of the Act.

Section 60 of the Act reads:

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.

This section of the Act begins with a statement concerning the trade mark application. It says that the registration of such an application may be opposed. A ground for such opposition may be that the mark applied for is either substantially identical with, or deceptively similar to, another trade mark.

I have found above, under s.44, that the applicant's mark and the opponent's marks are not deceptively similar. This reasoning is equally valid in relation to s.60. This being the case, I find that the opposition is also not successful in terms of s.60.

(c) Some other Issues

Although not crucial to this opposition, I observe in passing that the word 'Reef' is not a recognised synonym for the geographical location, The Great Barrier Reef located off the Queensland coast in the Coral Sea. I find that, as such, 'Reef' has no currency as indicating or connoting a geographical area. I also accept that 'Reef' is not a term of description within the clothing trade. The mark is one that is capable of distinguishing the opponent's goods.

Equally, however, I also find that the rights that the opponent has gained through registration of the single word REEF do not automatically extend to preclude rights that owners might have in other marks containing the word REEF as had been argued by the opponent.

Conclusion

From the foregoing, I have found that the opposition fails under s.44 and s.60 of the Act because the respective trade marks are not deceptively similar, and under the other ten grounds claimed in the notice of opposition but not further pursued by the opponent. Therefore, as a delegate of the Registrar, and subject to an appeal from this decision, I find that, on payment of the registration fee, this trade mark may proceed to registration.

As I having nothing before me to suggest that costs should not follow the decision, I award costs in this matter to the trade mark applicant.

Don Nancarrow

Acting Hearing Officer
3 December 1999