South Cone Inc v Stockline Pty Ltd

[2001] ATMO 37

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 751728(25) - Reef Clothing Company- filed in the name of Stockline Pty Ltd.

Background

Stockline Pty Ltd ('Stockline') filed application 751728 on 23 December 1997.  The application sought to register the trade mark appearing below in respect of “Clothing, excluding water sportswear and wetsuits” in Class 25 of the International (Nice) Classification of Goods and Services.

 

On 21 January 1998, the examiner reported on the application citing, in terms of section 44 of the Trade Marks Act 1995 (‘the Act’), inter alia, application 651542 in the name of South Cone, Inc (‘South Cone’).  651542 has subsequently been registered.  The attorneys for Stockline responded to the examiner’s report stating that Stockline had filed this application (751728) because registration 573947 owned by Stockline for the identical trade mark had been removed from the register.  I note that this number is an error and the attorney apparently meant to refer to 573949.

I will briefly recount the history of the circumstances of this removal now.  In March 1995 Ian Knight, a director of Stockline, purchased registration 573949 from Rawhides International Pty Ltd.  The details of this registration were:

Reg Number:   573949
Owner:  Rawhides International Pty Ltd (subsequently Ian Raymond Knight)
Priority Date:  10 March 1992
Goods:           Clothing, excluding footwear, water sports wear, and wetsuits.
Trade Mark:   

In a statutory declaration, made on 25 February 1999, Mr Knight explained that after South Cone filed its application to remove registration 573949, neither he nor his staff received any correspondence concerning the removal application because his organization had moved premises.  (I would infer that Mr Knight had not notified the Trade Marks Office of his change of address).  Mr Knight states in the declaration that, after the registration was removed from the register, South Cone contacted him concerning his use of the trade mark; he contacted Pizzeys, who are trade mark attorneys, and subsequently this application was filed. 

After considering the declaration and the facts that Mr Knight attested to, the examiner and attorney negotiated a restriction to the specification of goods of this application to “T-shirts (with or without collars) and singlets”. The application was then accepted under the provisions of section 44(3)(a) and advertised as such in the Australian Official Journal of Trade Marks on 20 May 1999.

On 16 August 1999, within the time allowed to do so, South Cone filed Notice of Opposition to the registration of the trade mark.  The Notice claims many grounds – I will not detail them all now but will discuss those that were relied on in submissions later in these reasons.

The Evidence

South Cone’s evidence in support of its opposition comprises:

Declarant	Referred to as	Date Made	Exhibits
Robert Gordon Bain	Bain	11 May 2000	Annexure A
Paul Gregory Neilson	Neilson	16 May 2000	Annexure A
Dougal Walker	Walker	19 May 2000	Annexure A
Philip Osborn	Osborn	19 May 2000	Annexure A
Douglas Lees	Lees	22 May 2000	Annexure A
Alan Peter Atkins	Atkins	25 May 2000	Annexure A
Ian Rodney Adams	Adams	29 May 2000	Annexure A
David Mead Sutton	Sutton	10 August 2000	Annexure A
Rowan Leslie Dent	Dent	12 August 2000	Annexure A
Peter Kendall John Donkin	Donkin	12 July 2000	Annexure A
Paloma Del Campo	Campo	11 July 2000	Exhibit PDC 1
Roderick John Barr	Barr	26 June 2000	Exhibits RJB1-RJB51

Stockline has not led any evidence in answer – there is, however, the declaration by Mr Knight (with annexures A to G) to which I have previously referred and to which South Cone has had access via an application under the Freedom of Information Act 1982.  South Cone has comprehensively addressed the detail of the Knight declaration in its written submissions and I am therefore satisfied that it is procedurally fair to rely on it in my considerations.

I consider the evidence filed in support of the opposition to be confused, occasionally lacking in coherence, self-contradictory and ambiguously incomplete in its information.  The evidence leaves much unanswered.

The Bain, Neilson, Walker, Donkin and Lees declarations do not comply with the regulations to the Act as they do not state the name of the person before whom they were made. Accordingly, while I do not disregard them, I do not place the same reliance on them as I would have if they had been properly made.

The declarations, apart from Campo and Barr are from persons other than principals of South Cone, or its distributors, who are connected with the surfing industry in Australia.  Ms Campo is a vice president, legal affairs, of South Cone.  She says that in late 1984 Fernando and Santiago Aguerre, who are brothers, entered the sandal industry.  This sandal, avers Ms Campo, has been sold since then under the trade marks REEF and REEF BRAZIL.  It is not clear from Ms Campo’s declaration whether both of these trade marks were adopted in 1984 or one was adopted at some subsequent date.  It is not clear whether the trade marks were adopted at the same time or whether the REEF BRAZIL trade mark was adopted first and the REEF trade mark was adopted later, or vice versa.  It is my view, having considered the evidence as a whole, that the REEF trade mark was introduced at a later date – however, I cannot be sure when.

Ms Campo attests that “South Cone has been using the trade marks on and in connection with footwear including thongs, sandals and shoes, clothing including T-shirts, sweatshirts, rash vests, windcheaters, caps, hats and socks, bikinis, bags including backpacks, key rings, doormats, posters, refrigerator magnets, patches, pens, marquee shelters, light boxes, videos and CDs.”  It is not clear when the use of the trade mark extended to the goods above as stated by Ms Campo, whether the goods were ever sold in Australia, or, indeed, that the above goods were ever in trade.  It would appear to be quite unlikely, to judge by the other evidence, that South Cone has been selling light boxes, door mats or marquees under either of the above trade marks.  It could be that the declarant means that the trade mark has appeared on marquees, door mats and on illuminated signs for promotional purposes: if this is so, the breadth and generality of the these particular claims must throw some doubt on the balance of the declarant's claims – it could be, for example, that the use of the trade mark on most of the goods mentioned by Ms Campo has been on promotional or signage material which is given away or displayed rather than sold in trade.  In the absence of explicit statements by Ms Campo and clear distinctions between promotional items and goods in trade, it is difficult to place any reliance on her declaration where these statements and distinctions are relevant..

I find similar problems with the Barr declaration.  Mr Barr is a director of Reef Brazil (Australia) Pty Ltd, the distributor of the South Cone goods in Australia.  He confirms that in 1991 and 1992 South Cone sent t-shirts to Australia for promotional purposes.  Mr Barr does not state whether any of these t-shirts were actually sold or whether they were given away to retailers and others for promotional purposes or whether they were to be worn by competitors or his own staff at surfing events for promotional purposes.  My perception of confusion, or lack of precision, in the declaration is confirmed by Mr Barr also alluding to, and including photographs of, inter alia, such items as coat hanger supports, doormats, a marquee shelter and fridge magnets and video as having been supplied by South Cone under the trade mark.  Confusingly, the marquee and video cover also carry the trade marks of other traders in such a way that would suggest that South Cone did not supply these goods in trade but were co-sponsors of the video production and of the sporting event at which the tent was used.  I doubt that these items were sold in trade in Australia by South Cone or its distributor, yet Mr Barr refers to them as being “supplied under the trade marks” and does not distinguish between these items and any non-promotional goods which were dealt with in trade by the opponent.  Thus, I do not know what to make of Mr Barr’s statement that “…since that date [1991-1992] the usage on t-shirts has expanded continuously …”  Mr Barr illustrates the “ever expanding use of the trade mark REEF on t-shirts [with] tables comparing the number of items supplied at the end of 1998 and 1999.”  There is no express statement by Mr Barr that the items mentioned were sold in trade.  Also the figures supplied relate to years which are after the relevant date of 23 December 1997 – the date on which this application was made – and thus lack significance.

Mr Barr gives sales figures that are the “retail value of sales (in Australian dollars) in Australia of the goods sold under or be reference to the trade marks since 1990.”  Here, unfortunately, Mr Barr has given me no indication of the goods to which each year’s sales value relates.  Thus, while the retail value appears to be very respectable, I can form no conclusions as to which goods these figures apply.  I have no way of knowing whether these figures relate only to sandals or to some or all of the goods that Mr Barr says are “supplied” under the trade marks which include footwear, caps, t-shirts, bags, coats hanger supports, socks, backpacks, doormats, marquees, refrigerator magnets and videos. Mr Barr does not state when use of the trade marks in Australia on the goods other than sandals started.  I gather from the declarations, taken as a whole, that South Cone’s goods are primarily sandals.  It is apparent from the totality of the evidence that South Cone, possibly as recently as 1998 or 1999, started to diversify into other wear – mainly aimed at the surf-wear market. 

I am led to believe from the imprecision in the evidence that the difficulty I find in interpreting the evidence results from a blurring or telescoping of the use of the trade mark in relation to some of the goods backwards in time. 

The evidence also merges the use of the two South Cone trade marks (REEF and REEF BRAZIL) which further confuses deliberation of the issues as the considerations surrounding both trade marks are not the same.  Not that I find anything reprehensible in this – it is natural that some opponents will attempt to guild the lily or present their evidence in the best possible light – it must be accepted, however, that when this leads to vagueness and lack of clarity such that no safe conclusion can be drawn from it, no heavy reliance can be placed on the evidence and it may call the reliability of the declaration as a whole into question.

Mr Bain was a professional surfer for twelve years, worked for Hot Tuna Surf Wear for eighteen months, he then worked for Morrison Media for eighteen months and then for Peak Wetsuits in 1998; at the time he made his declaration in May 2000 he was employed by O’Neill Wetsuits.  Mr Bain gives his opinions as to the demographics of surf-wear buyers.  He goes on to say that he first became aware of the REEF brand in 1984 when he was “on a surf trip off an island off Mexico” and he met the American owner of REEF.  He says that he has had knowledge of the use of the REEF trade marks in Australia since 1989 when he recollects, the footwear range was launched in Australia.  (This concurs approximately with the Barr declaration which states that the trade mark was first used in Australia in 1990). Mr Bain states that he knows of REEF as a footwear supplier but that he is aware that “there is a new range of clothing which has been recently brought out under the REEF trade marks.”  I am not sure what the term “recently” denotes in the context of a declaration made in 2000, but ity could be that Mr Bain means some date in the last two years – I will assume that he, in fact, is referring to a range of clothing bearing the trade mark REEF made by (or marketed under the auspices of) South Cone and not somebody else.

Mr Bain then states, “When I saw the trade mark REEF in the form of the words "Reef Clothing Company" as shown in annexure ‘~A’ and used on clothing for example, I thought that the words were part of a new or different product range by the owners of the Reef/Reef Brazil trade marks or that who ever was using the words Reef Clothing Company had some form of sponsorship, approval or affiliation from the owners of the Reef/Reef Brazil trade marks.” 

The annexure to which he refers is reproduced below:

This statement occurs in all of the declarations apart from the Barr and Campo declarations.  It is, perhaps, remarkable that, despite other differences, all of the declarants have chosen precisely the same words to express their own, freely made, opinions about the confusion that might arise from the use of the opposed trade mark.  However, leaving that issue to one side, I am not sure whether the declarants are saying that they had been shown the clothing with the mark on it; whether they had been shown the annexure and had been asked to suppose that it was affixed to clothing; whether they were told that it was to be affixed to surf-wear; whether they have been told that the goods in question are t-shirts; whether they, in fact, mean that the opposed trade mark would be confusing if applied to surf-wear but not, for example, formal-wear.  The statement appears to lack coherence, precision or obvious meaning and it has identically occurred across all of the declarations apart from the Campo and Barr declarations.

Mr Neilson is managing director of a chain of retail outlets that specialise in surf-wear.  The Nielsen declaration is vague as to his knowledge of when South Cone commenced use of its trade marks in Australia but confirms (without stating when use of the trade marks on surfing-wear started) that the trade marks’ use on “footwear is an important brand [sic] sold in all 25 of my retail outlets.”

Mr Walker is the general manager for GSM Operations Pty Ltd which markets BILLABONG surf-wear. Mr Walker states that, “From my experience, although REEF/REEF BRAZIL is primarily used in relation to shoes and sandals, because of its prominent advertising campaigns it is associated with surf wear generally.”

Mr Lees is the publisher of the magazine Surfing World.   Mr Lees says, “Although REEF is particularly prominent in footwear, in my opinion, it is a trade mark which is prominent in surfwear generally.”

Mr Atkins is National Executive Director of Surfing Australia Inc (‘SAI’).  SAI is the peak surfing body in Australia and guides and promotes the development of surfing in Australia.  Speaking of the sales demographic of surf wear he says that he believes that “surf wear was originally the target of the youth market.”  He avers that he has “knowledge of the REEF trade marks as applied to clothing, including t-shirts, in a promotional sense.  I am aware of the REEF trade marks having been used in relation to promotional clothing of Reef Brazil (Australia) Pty Ltd.”

Mr Adams is General Manager Finance and Operations of Ripcurl – an Australian company that specialises in surfwear and surfing accessories.  His declaration was made in May 2000 and he says that he has been aware of the REEF/REEF BRAZIL trade marks for at least the last 9 years.”  He also avers that he first became aware of the REEF trade marks in approximately 1988.  This three year discrepancy is not explained. Like several of the other deponents, he states that he is not aware of other clothing that competes in the surfwear market which has applied to it the mark or name REEF.

Mr Sutton is the owner of a surf-wear shop.  He says that he has “known of the use of the trade marks REEF/REEF BRAZIL in Australia for the past 9 years in relation to surf wear and in particular in relation to REEF shoes and sandals.”  He also avers “Although I am not aware of the REEF trade marks in relation to clothing specifically, I am aware of the Reef trade marks as a brand which have a significant reputation in the surf wear industry generally.”

Mr Dent is advertising and marketing manager for a retail surf-wear outlet Surf, Dive ‘n’ Ski.  He attests that he had, in August 2000, been aware of the REEF trade marks for approximately 8 years.  He says that it is his recollection that “everyone used to wear thongs and then there was a change to wearing sandals and it was the REEF brand that was at the forefront of this change to the wearing of sandals.”  Mr Dent also says that he owns a REEF t-shirt, as does his girlfriend and his girlfriend’s younger sister.  He does not however state that these were bought by him, and, in view of the statements of other declarants, it would appear to be likely that these t-shirts are promotional items, rather than goods in trade.

Mr Donkin is the general manager of Surfing Western Australia Inc who are a representative body for surfers in Western Australia.  He says that, in his experience, consumers are very brand conscious in their choice of surf wear and can distinguish between different brands of clothing and different trade marks which are used in relation to those brands of clothes.  Mr Donkin says that he is not specifically aware of the REEF trademarks on t-shirts apart from promotional t-shirts.

The impression I gain from the evidence is that t-shirts might only have been sold recently in Australia by South Cone, if at all.  There is no doubt that South Cone has at least a modicum of reputation in Australia for sandals which are sold to the surfing fraternity, but South Cone’s inflated claims concerning that reputation and that its reputation extends to the sale of such diverse goods as watches, doormats, marquees and key-rings introduces real doubt in my mind about the nature and extent of that reputation in relation to sandals – those inflated claims to which I have referred, blur, rather than add any definition to the question.  Thus, I cannot regard the evidence as being of very high probative value.  The principal declarations are quite vague, as I have discussed above and do not distinguish between use in trade and use on promotional items: Top Heavy Pty Ltd v Killin (1996) 34 IPR 282.. The apparent claims evident in these declarations evaporate in the light of close scrutiny and the statements made by the other declarants. However, the supporting declarations also contain statements in common that appear to defy rational analysis.

Other

I will also remark on the table of events shown below.

Date	Event
05 April 1988	Trade mark 484626(25) REEF BRAZIL lodged by South Cone. (Subsequently registered)
23 October 1991	Trade mark 565847(25) REEF BRAZIL lodged by South Cone. (Subsequently registered).
10 March 1992	Trade mark 573949(25) REEF CLOTHING COMPANY lodged by Rawhide Pty Ltd. (Subsequently registered).
19 January 1995	Trade mark 573949(25) REEF CLOTHING COMPANY assigned to Ian Knight
12 June 1997	Advertisement of removal application against 573949(25) filed by South Cone.
16 October 1997	573949(25) advertised as removed.

It is apparent, therefore, that contrary to the opinions expressed in the supporting declarations, the trade marks REEF BRAZIL and REEF CLOTHING COMPANY not only co-existed in the Australian market-place (according to the Knight declaration) but also co-existed on the Register of trade marks for some five years.

The submissions

Neither party requested a hearing.  South Cone relies on written submissions by its attorney, Robin T Kelly of the firm Fisher Adams Kelly of Brisbane.  Appended to Mr Kelly’s submissions, and addressed within his submissions, are numerous documents which include a CITEC ASIC printout; a copy of a Queensland Business Names Extract; and, copies of Yellow Pages^® Online.  These documents purport to show that the applicant has ceased business.  I have decided that these ‘submissions’ constitute evidence.  As such, neither Stockline nor its legal advisors has had access to this evidence and it is not apparent that Mr Kelly forwarded a copy of this evidence to Stockline or its legal advisors.  I have therefore further decided that it would not be procedurally fair for me to consider this evidence without Stockline being able to respond to it.  It could be, for example, that, presented with this evidence, Stockline would have been able (and wanted) to present evidence in answer that would have addressed the concerns that it purports to raise.  The material was apparently available prior to the forwarding of the submissions to this Office and there is no explanation of why this evidence was not served and filed earlier.  Further, the material is un-sworn.  It would also appear that most of this material lacks weight since the searches were made, and refer to the status quo, well after the relevant date of 23 December 1997 – the date that this opposed application was made.

Similarly, Mr Kelly refers me to the evidence filed in relation to an opposition by South Cone to application 727395.  Again, I have not been shown that Mr Knight or his legal representatives have had access to this material and it would not be procedurally fair for me to refer to it in the absence of their capacity to respond to it.

In his written submissions, Mr Kelly referred to the provisions of section 44 – in particular the concurrent user provisions of subsection 44(3). For the sake of completeness, I will also discuss how Kenny J’s decision in McCormick & Company Inc v McCormick [2000] FCA 1335 impacts on these reasons.

Reasons

Section 44 of the Act provides:

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.

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

(a) it is substantially identical with, or deceptively similar to:

(i) a trade mark registered by another person in respect of similar services or closely related goods; or
(ii) a trade mark whose registration in respect of similar services or closely related goods 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 services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

Note 1: For deceptively similar see section 10.

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

(3) If the Registrar in either case is satisfied:

(a) that there has been honest concurrent use of the 2 trade marks; or
(b) that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.

Note:  For limitations see section 6.

(4) If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant's trade mark for a period:

(a) beginning before the priority date for the registration of the other trade mark in respect of:

(i) the similar goods or closely related services; or
(ii) the similar services or closely related goods; and

(b) ending on the priority date for the registration of the applicant's trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

Note 1:  An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).

Note 2:  For predecessor in title see section 6.
Note 3:  For priority date see section 12.

South Cone has a number of registered trade marks on which it relies and which are mentioned in Mr Barr’s declaration.  These include as much as are relevant:

Reg Number:   484626
Owner:  South Cone
Priority Date:  5 April 1988
Goods:           Footwear, including sandals
Trade Mark:    REEF BRAZIL

Endorsement:  Registration of this trade mark shall give no right to the exclusive use of the word BRAZIL*

It is a condition of registration that when the mark is used in relation to goods not produced in Brazil the place of manufacture will be shown prominently within or in proximity to the mark*
The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.*

Reg Number:   565847
Owner:  South Cone
Priority Date:  23 October 1991
Goods:           Clothing in this Class
Trade Mark:    REEF BRAZIL

Endorsement: Registration of this trade mark shall give no right to the exclusive use of the word BRAZIL*

It is a condition of registration that when the mark is used in relation to goods not produced in Brazil the place of manufacture will be shown prominently within or in proximity to the mark*
The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.*

Reg Number:   643028
Owner:  South Cone
Priority Date:  12 October 1994
Goods:           Clothing in this class excluding hosiery
Trade Mark:    REEF BRAZIL

Endorsement:  Registration of this trade mark shall give no right to the exclusive use of the word BRAZIL*

It is a condition of registration that when the mark is used in relation to goods not produced in Brazil the place of manufacture will be shown prominently within or in proximity to the mark*
The preceding endorsement(s) were recorded prior to commencement of the Trade Marks Act 1995.*

Reg Number:   651542
Owner:  South Cone
Priority Date:  30 Jan 1995
Goods:           Clothing excluding wetsuits; footwear and headgear.
Trade Mark:    REEF

I will assume, in respect of the first three registrations, above, on which South Cone relies, that its goods are being produced in Brazil since the evidence shows that South Cone does not otherwise notify the country of origin of the product in proximity to the trade mark or within it.  If the country of origin of the goods was other than Brazil, South Cone could not rely the trade marks in this matter.  Certainly, confirmation via Exhibit RJB12 to the Barr declaration that some of South Cone’s promotional t-shirts that bore the trade mark REEF BRAZIL were ordered and printed with the trade mark within Australia, adds an element of uncertainty to these proceedings.

As observed by French J in Registrar of Trade Marks v Woolworths [1999] FCA 1020 (29 July 1999) at para 39, the question of whether goods, goods and services or services are closely related, rationally precedes a consideration of the similarity of the trade marks in question:

The logic of subs 44(2) suggests that the determination whether goods are closely related to the services in question is logically antecedent to the determination whether the trade mark in respect of the services is deceptively similar to that in respect of the goods.

In considering whether the goods are closely related, I am to consider the goods as registered by the opponent and as claimed by the applicant.  Any regard to what the goods of the parties actually are has no place in this consideration - Re Smith Hayden and Co's Application (1946) 63 RPC 97 at 101:

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.

The above quotation is subject to French J’s caveat in Woolworth’s, above, at para 45:

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 and 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.

There is no doubt here that the goods of the application fall within the general descriptions of the goods of registrations 565847, 643028 and 651542, above.

Mr Kelly, in his written submissions, did not directly address the issue of whether the trade marks in question are substantially identical or deceptively similar – he did, however, submit in relation to the honest concurrent user of the trade marks that they share a ‘triple identity’.  By this I take it that he means that the trade marks in question are substantially identical, so I will first address this point.

Substantial identity is to be assessed with reference to the well known test set out by Windeyer J in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414–15:

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 assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison …

Hence, I consider the differences between the trade marks in question to be such that the trade marks are not substantially identical.

The classic statement of the test for deceptive similarity is by Windeyer J in The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1961) 109 CLR 407 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.

Further, all of the circumstances surrounding the comparison that are relevant are to be considered.  On the question of deceptive similarity, Justice Parker in Re Application by the Pianotist Co Ltd 1A IPR 379 at 380; (1906) 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.

The context of this comparison is the clothing and footwear industries generally and most particularly the circumstances which prevail in the projection of those goods into the surfing and beachwear markets. However, in the context of section 44, it is the former, the general situation, which I must consider. In seeking to acquaint myself with this market, as well as taking the declarations in evidence into account, I have reviewed the examiner’s search of the register on the application file and the state of the register more generally. Although I do not suppose that all of the trade marks I have found are in use, it must be assumed that many of them are. Further, it is against the background of these trade marks that the dispute between these parties exists and that the parties, themselves, have registered, or attempted to register, their trade marks.

The most obvious of these examples which are registered include: 408248(25) SUNREEF; 409721(25) REEF WETSUITS; 476741(25) PACIFIC REEF; 537809(25) CORAL REEF; 632088(25) OCEAN REEF SURF WEAR AUSTRALIA; 749095(25) G.W. REEF RESORT; 800629(25) OUTEREEF.  The above list grows when Classes 18 (luggage etc) and 28 (sports equipment) are also included.

If one places the above instances of the word REEF in trade marks (and the instances currently under consideration) into the context that, in surfing parlance, a ‘reef wave’ is a perfect wave that breaks over a coral reef (Bain, Osborn and, Lees declarations), the use by traders (other than the parties) of the word in relation to surf-wear becomes understandable.  The declarants attest that the purchasers of surfing wear are discriminating, fashion conscious and seek out their purchase by reference to trade marks.  I believe that, against this background, one can view the purchasers of surf-wear as being quite perceptive and viewing what might be considered in another market to be quite minor differences between trade marks as being major differences.

I do not consider the trade marks REEF BRAZIL and REEF CLOTHING COMPANY, as applied for, to be deceptively similar.  The get-up of the opposed trade mark is idiosyncratic and while not rendered in a ‘special or particular manner’ has a peculiar get-up. 

Therefore, while it is possible that the concurrent use of these trade marks might confuse or deceive, I am not satisfied that there is a reasonable likelihood that such use of the trade marks will confuse or deceive.

However, I consider the trade mark as applied for to be deceptively similar to the trade mark REEF and, to paraphrase the words of French J that I have quoted from Woolworth’s, above, I am satisfied that there is here a reasonable likelihood of deception or confusion.  If Stockline uses the trade mark REEF CLOTHING COMPANY for the goods for which registration is sought, the words “clothing company” will, I believe, be to an extent discounted by the public in their contemplation of the trade mark.  The memorable part of the applicant’s trade mark is the word REEF and, in my opinion, it is thus quite likely that people with a memory of South Cone’s REEF trade mark will imperfectly recollect it when seeing the trade mark REEF CLOTHING COMPANY in the form for which registration is sought.  As Luxmoore LJ said in Re Application by Rysta Ltd (1943) 60 RPC 87 at 108:

The answer to the question whether the sound of one word resembles too nearly the sound of another so as to bring the former within the limits of s 12 of the Trade Marks Act 1938, must nearly always depend on first impression, for obviously a person who is familiar with both words will neither be deceived nor confused. 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.

The juxtaposition of the words REEF and CLOTHING COMPANY as they occur in the trade mark also point to a likelihood that a person, having a knowledge of South Cone’s REEF trade mark will view the opposed trade mark as being a variant of South Cone’s trademark and thus be deceived as to the trade source of the goods.  In John Fitton & Co Ltd's Appn (1949) 66 RPC 110, at 113, in considering the trade mark EASYJEST in face of the registered trade mark JEST, the Assistant Comptroller said that no limitation was to be placed "upon the nature of the confusion or deception so envisaged, whether it be visual or phonetic confusion of the marks themselves, or what is termed contextual confusion, or deception as to the trade provenance of the goods".

Thus, I find that the preliminary part of this opposition succeeds in that the opposed trade mark is deceptively similar to the registered trade mark REEF (651542) in the name of South Cone.

The application has been accepted, however, under the provisions of subsection 44(3)(a) which appear above.  This subsection allows for the co-existence on the register of substantially identical or deceptively similar trade marks in the names of different owners if the trade marks have been honestly and concurrently used and if the deception or confusion which actually occurs in trade is minimal.  As recently explained and confirmed by Kenny J in McCormick & Company Inc v McCormick [2000] FCA 1335, at para 30:

Section 44(3) gives the Registrar a discretion to accept an application that would otherwise be rejected under s 44(1) in the case of honest concurrent use or other circumstances making it proper to do so. The authorities establish that the principal criteria for determining whether registration should be permitted pursuant to s 44(3) include:

(1) the honesty of the concurrent use;

(2) the extent of the use in terms of time, geographic area and volume of sales;

(3) the degree of confusion likely to ensue between the marks in question;

(4) whether any instances of confusion have been proved; and

(5) the relevant inconvenience that would ensue to the parties if registration

were to be permitted.

See In Re Alex Pirie & Sons Ltd's Application (1932) 49 RPC 195; (1933) 50 RPC 147 at 159-160; In Re John Fitton & Co Ltd's Application (1949) 66 RPC 110 at 112; and Stingray Surf Co Pty Ltd v Lister (1997) 37 IPR 306 at 310-311. These factors are not necessarily exhaustive of the matters to be considered, but they are a useful guide: see In Re Electrix Ltd's Application [1957] RPC 369 at 379.

The rights of the parties are to be determined as at the date of the application for registration – here this is 23 December 1997: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-95; In Re Simac S p A Macchine Alimentari's Application (1987) 10 IPR 81 at 90-91.

As Kenny J said in McCormick, at para 32:

The honesty of concurrent use refers to "commercial honesty, which differs not from common honesty": see In Re Parkington & Co Ltd's Application (1946) 63 RPC 171 at 182. In that case, Romer J said at 181-182:

[T]he circumstances which attend the adoption of a trade mark in the first   instance are of considerable importance when one comes to consider whether the use of that mark has or has not been a honest user.

The Honesty

In this instance, the evidence shows that application 573949(25) REEF CLOTHING COMPANY was originally filed in the names of GV Fairbairn and PW Pembroke on 10 March 1992.  Registration 573949 was assigned to Rawhides International Pty Ltd which subsequently changed its name to Commercial Technologies Pty Ltd.  Registration 573949 was then assigned to Ian Raymond Knight.  Mr Knight says that since he bought the trade mark REEF CLOTHING COMPANY he, and subsequently the company, Stockline, had (as at 25 February 1999 when his declaration was made) continuously used the trade mark on t-shirts and singlets.  There is no material in evidence which shows why the trade mark REEF CLOTHING COMPANY was selected by GV Fairbairn and PW Pembroke.  However, I feel that it is unlikely that the trade mark was selected because of the reputation of South Cone’s trade mark.  South Cone had not been using its trade marks in Australia for very long at that time – perhaps as much as two years and this use had been on sandals.  The evidence (which, as I have said, is very vague) suggests that South Cone had used its REEF BRAZIL trade mark at that time but had not used its REEF trade mark.  While Mr Kelly, in his submissions on behalf of South Cone says that t-shirts under the REEF trade mark were available for sale since August-December 1992, this is both after the filing of the 573949 trade mark and an apparent mis-statement:  exhibit RJB12 to the Barr declaration shows that the logos on the t-shirts contained the trade mark REEF BRAZIL; further, Mr Barr, in his declaration, unambiguously states that the t-shirts were produced for promotional purposes and there is no express statement that the goods were actually sold – from which I conclude that the t-shirts may have been given away rather than sold in trade.  However, whichever the case, the effect on the honesty of the adoption of the trade mark is not affected – the adoption was prior to the production of the t-shirts by South Cone or Reef Brazil (Australia) Pty Ltd and was at a time when the REEF trade mark was not (apparently) in use.  I therefore conclude that the adoption of the trade mark was most likely to have been honest.

The Extent

The amounts of revenue generated by use of the opposed trade mark are moderate but the figures given in the Knight declaration are wholesale figures – the amounts generated under the trade mark at retail are likely to have been higher.  Mr Knight, in his declaration, states that his use of the trade mark started in March 1995, has been continuous, has been mainly in Queensland and New South Wales and that small amounts of goods have been sold under the trade mark in other Australian States.  It is of some concern to me, and this was addressed in Mr Kelly’s submissions, that it is not always clear, from Mr Knight’s statements, who was using the REEF CLOTHING COMPANY trade mark; whether it was Mr Knight, the business Stockline Distributors or the company Stockline Pty Ltd.  However, it appears to me that the question of who was using the trade mark does not affect the fundamental issue of whether it was used and the extent and duration of that use.  I believe that it is quite apparent that whoever was using the trade mark was doing so under Mr Knight's control – it would be unfortunate to have to produce an adverse finding because a trade mark owner had not observed some technical nicety in recording all transfers in the ownership of the trade mark or could not produce formal user documents: Paragon Shoes Pty Limited v Paragini Distributors (NSW) Pty Limited (1988), 13 IPR 323.

The Degree of Deception or Confusion

I do not foresee a high degree of confusion and deception between the trade marks REEF and the trade mark REEF CLOTHING COMPANY as applied for.  The declarants in support of the opposition attest that the buyers of surf wear are discriminating and make purchases by reference to, and close scrutiny of, the trade mark.  In much the same way that sporting fans will purchase t-shirts by reference to their team’s names and not be deceived because there might be, for example, a number of teams called the RATTLE SNAKES playing in different codes or sports and each producing t-shirts which incorporate that word in the logo, I consider that surfing aficionados have been very well educated by the various makers of surfing wear about their trade marks.  As I have previously discussed, it is in such markets that small differences between trade marks become major ones – this observation is to some degree supported by the number of trade marks which incorporate the word REEF and co-exist on the register.  Although it is quite likely that most people seeking to buy a t-shirt by reference South Cone’s trade mark would, on observing Stockline’s trade mark, notice the similarity in the trade marks, any confusion is not likely to persist to the point of purchase and become deception.  I therefore consider any risk of deception to be at an acceptable level.

Instances of Deception

Apart from the Barr and Campo declarations, each of the declarations filed in support of the opposition makes a statement to the effect that the deponent finds that the similarities between the trade marks are deceptive.  Leaving aside my observations concerning the coherence of these statements, and concerns about their uniformity, I do not think that these statements could (if they were understandable or independently made) demonstrate or prove confusion or deception in trade.  They are made by persons who have been shown a trade mark record off an official data-base of the Trade Mark Office affixed to a t-shirt; or the declarants have been asked to suppose that it were to be affixed to a t-shirt – the potential deception to which they seemingly attest is not actual deception and does not arise from the use of the trademark in a commercial setting.  Although the declarants have not been deceived or confused, they appear to be stating that they might be.  This does not address the question of “whether any instances of confusion have been proved” per McCormick, above.

The Relative Convenience

South Cone have not demonstrated that they would be inconvenienced if the opposed trade mark were to be registered.  Not only has this issue not been directly addressed in their evidence in support, but the evidence that might have borne on the question indirectly by way of detailed sales and advertising figures and so on is vague and unclear.  The inconvenience to Stockline if a trade mark which, at the date of application, it had been using for some three years failed to achieve registration is obvious.  It would have to cease use of a trade mark which, in its apparent scale of operations, is important to it.

On the above assessment of the factors involved in the consideration of the honest concurrent use of the trade mark, the opposition to the registration of the trade mark under this heading fails.

The above five factors must be addressed in considering the honest concurrent use of a trade mark, but (as is made clear in McCormick and Electrix, above), it is not an exhaustive list.  I think that the circumstances surrounding this application are also relevant.  Here the situation is unusual.  The opposed trade mark was previously registered.  It was removed for non-use after the application for non-use was only successful because the registered owner had not notified the Trade Marks Office of a change in his address.  There is no doubt that the trade mark was being used and the current opponent apparently acknowledged this at the time via a letter of demand sent to the owner of the removed trademark subsequent to the advertisement of the removal in the Official Journal of Trade Marks.  South Cone has no apparent dispute with Mr Knight's statement that he received such a letter from South Cone.  It is curious that it might seem that South Cone was apparently aware of Mr Knight’s change of address (as they could subsequently write a letter of demand to him) and yet did not, during the course of its removal application, inform either Mr Knight or this Office of the fact.  Further, the letter of demand would appear, prima facie, to raise questions about the statements and declaration made in support of the removal application since a letter of demand does not usually indicate a belief in the originator that a trade mark is not used.

These factors (individually or in combination) do, I believe, strengthen Stockline’s position that the application should be registered under the provisions of either subparagraph 44(3)(a) or (b). The latter subparagraph affords the Registrar a discretion to accept an application for registration in the face of a conflicting trade mark if, because of other circumstances, it is proper to do so. If the Stockline evidence as to the quantum, area and duration of its use of the trade mark had been weaker, I would have directed that the application proceed to registration only under the provisions of subparagraph 44(3)(b) but believe that, in all of the circumstances, it is appropriate to apply both provisions of section 44(3).

Reputation

Section 60 of the Act provides:

60  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)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.

Notwithstanding the acceptance of a trade mark under the provisions of section 44(3), an opposition may succeed on the basis of section 60. As explained by Kenny J in McCormick, above, from para 93:

Within Division 2 of Part 4, s 44(1) provides for a ground for rejecting an application before acceptance by the Registrar. Subsection 44(1) expressly states that it is subject to s 44(3), the honest concurrent user provision. The whole of s 44 is expressed as an interlocking series of subsections. Section 60, which is part of a Division specifically setting out the grounds for opposing registration, is directed to the position after acceptance. Section 60 is not expressed to be subject to s 44(3), any analogous limitation, or even the Act generally: contrast s 89(1). On its face, it is a stand-alone provision. Furthermore, s 60 is apparently intended to afford a ground of opposition that is additional to the grounds set out in Part 4. Section 57 expressly states that the grounds of opposition may be "any of the grounds on which an application for the registration of a trade mark may be rejected under Division 2 of Part 4" (which includes s 44). Sections 58 to 62 add further grounds for opposition. On its face, there is no honest concurrent user exception to s 60.

Further, there are pertinent differences between s 44(1) and s 60. Subsection 44(1) requires a comparison of the applicant's mark with the mark of another person and the goods to which they both apply. If the Registrar concludes the marks are deceptively similar and the goods to which they apply are goods of the same description (and par 44(1)(b) is satisfied), then the registration application must be rejected; that is, of course, unless, in an exercise of discretion under s 44(3), the Registrar determines to permit the registration. Section 60 also requires a comparison, this time between the accepted mark and a mark that, before the relevant date, had acquired a reputation in Australia. If the marks are deceptively similar, then the question is whether the use of the mark, which has been accepted, would be likely to deceive or cause confusion, because of that reputation. Under s 60, the new inquiry centres on the reputation of the earlier mark. That reputation is critical to the opposition under s 60: contrast s 28 of the 1955 Act and see Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 at 504 per Gummow J.

The trade mark to which the opposed trade mark is deceptively similar is the South Cone trade mark REEF.  There are real difficulties in assessing the reputation of this trade mark as at the relevant date of 23 December 1997.  I have been given no information as to when the REEF trade mark was first used by South Cone in Australia but a conclusion that it was some time after the first use of the trade mark REEF BRAZIL appears likely to be safe.  If the first use of the trade mark REEF was contemporaneous with the filing of trade mark application 651542, use may have commenced in early 1995.  The South Cone evidence telescopes the use of the two trade marks into each other, does not break down sales figures for the goods it has sold and does not distinguish between goods in trade and promotional items: Top Heavy, above.  There are no separate sales figures for goods sold under this trade mark and considerable doubt as to which goods it has been used on, or in relation to, in trade – apart from sandals.  Neither do I believe that South Cone have demonstrated to me that if the trade mark had a reputation on sandals, people seeing the use of the opposed trade mark on t-shirts would be deceived. 

South Cone’s claims to have used the REEF trade mark on t-shirts as early as 1992 are mistaken as the trade mark it has shown in evidence that the trade mark it did use on t-shirts at that time is REEF BRAZIL – a trade mark that is neither substantially identical not deceptively similar to the opposed trade mark.  Further, it appears possible that these t-shirts were promotional items and were not sold in the course of trade.

I therefore conclude that the evidence does not support the proposition that the South Cone trade mark REEF had sufficient reputation to found an opposition under section 60 at the relevant date.

Decision

I therefore dismiss the opposition and direct that, on the elapse of the period of time allowed from the date of this decision in which an appeal may be filed, the application may proceed to registration if the appropriate fees have been paid.  The applicant should request the amendment of the endorsement to:

Accepted under the provisions of subsections 44(3)(a) and (b).

Costs

There have been no submissions as to costs and I make no award.

Ian Thompson
Hearing Officer

Monday, 14 May 2001