South Cone Inv v Reg Barton Spencer

[2007] ATMO 43

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 1010666(25) - REEF HUNTER - filed in the name of Spencer Reg Barton.

Delegate:

Rachel Dunn

Representation:

Opponent

Robin Kelly of Fisher Adams Kelly.

Decision:

S52 Opposition – sections 44 and 60 established, registration refused.

Background

1. Mr Spencer Reg Barton (the applicant) applied on 13 July 2004 for the plain word trade mark “REEF Hunter” for the goods of clothing in Class 25.  On 25 November 2004 the application was advertised as accepted without an objection being raised by the Trade Marks Office (TMO).

2. South Cone Inc (the opponent) filed a notice of opposition to this application on 25 May 2005 after an extension of time was granted for the purposes of negotiation and research.  The negotiations appear to have consisted of a suggestion by the opponent’s representatives that the applicant withdraw his application.  As this suggestion was unsuccessful, the notice was filed listing the following grounds under the Trade Marks Act 1995 (the Act): sections 58, 59, 60, 41, 42, 43 and 44.  In regards to the section 44 ground of opposition, there were nine trade marks incorporating the word REEF and owned by the opponent listed in the notice.  Once the notice of opposition was formally filed and served the applicant chose to obtain legal representation.

3. Evidence in support of the opposition was served and filed in several parts, requiring an extension of time.  Shortly after the evidence in support had been served, the applicant’s representatives noted that one of the opponent’s statutory declarations was headed with an incorrect trade mark number – 947859 instead of 1010666; and referred to an applicant who was not the applicant in this matter.  The opponent’s representatives argued that these were merely typographical errors, not of great factual substance, as the body of the statutory declaration clearly referred to the correct details, including the trade mark number, trade mark itself and the correct applicant.  A senior examiner working in the hearings section assessed this matter and concluded that the statutory declaration could be relied upon in this opposition as the errors were not of a substantial nature.  Very shortly after this conclusion the applicant’s representatives advised the TMO and the opponent that they no longer acted for the applicant.  They provided a PO Box in the name of the applicant as the applicant’s new address for service in this matter.

4. The time for service of the applicant’s own evidence, in answer to the evidence in support and the notice of opposition, passed with no correspondence from the applicant.  The TMO sent notices regarding the overdue evidence, and what the applicant would need to do if he wished to serve evidence.  Unfortunately, these notices were sent to the applicant’s previous representatives, and there is no evidence or information to suggest that this material ever reached the applicant.  No evidence in answer was filed and served.

5. The opponent chose not to file and serve any additional information and simply requested a hearing into the matter.  The notices from the TMO regarding the hearing – both the informal and the formal information – were sent to the applicant’s correct address for service.  No correspondence of any type was received from the applicant or the applicant’s previous representatives between 6 March 2006 and 6 September 2006.  On 6 September 2006 the applicant rang the TMO and spoke to the senior hearings support officer regarding the application and his address for service.  A facsimile received the following day requested an amendment of the address for service to an address, email, and facsimile number in China.  A mobile telephone number was also provided.  Section 215(5) of the Act states that an address for service must be an address in Australia.  As these details provided did not constitute an address for service in Australia, the previous PO Box was retained by the TMO.

6. The senior hearings support officer responded to the applicant on 8 September 2006, noting that: the substantive matter had already been heard; the applicant’s agent had provided the TMO with a PO Box number in Australia which was now recorded as the address for service; no evidence had been received to support the applicant; and provided details about appealing to the Federal Court.  The applicant responded via email on 11 September 2006 stating that the PO Box currently being used was his only address in Australia, and as such needs to be the address for service in this matter, despite it proving to be unreliable.  The applicant seemingly made no attempt to secure an alternative address for service in Australia and the ‘unreliable’ PO Box is still listed on the TMO database.

7. This matter came before me, as a delegate of the Registrar, on August 24 2006.  Robin Kelly of Fisher Adams Kelly represented the opponent, the applicant was unrepresented and no submissions were received to support its application.  The opponent decided not to pursue grounds of opposition under sections 41, 42 and 43, however submissions on sections 44, 58, 59 and 60 were filed and heard.

Evidence and submissions

1. Mr Kelly began his submissions by explaining the background of the opponent and pointing out the important passages of the extensive evidence, including statutory declarations by several people actively employed in the surfwear industry.  The evidence shows that the opponent uses several trade marks incorporating the word REEF, including REEF solus and REEF BRAZIL.  These trade marks are used on goods including footwear, headgear, shirts, T-shirts, trousers, backpacks and socks.  This use began in 1988 however such early use is restricted to the goods of footwear only.  The retail value of REEF and REEF BRAZIL products sold in Australia runs to several million dollars per year, and the worldwide sales of these products reached over $80 million in 2004.  The statutory declarations also go towards the impressive reputation of the brand REEF, how well-known in Australia it is in the surfwear industry, and detail the belief that customers would perceive the word REEF in composite trade marks containing other words, such as the applicant's REEF Hunter, as belonging to the opponent or having a connection or an affiliation with the opponent.

Discussion

Section 44

1. The opponent has cited nine trade marks to which it believes section 44 of the Act applies, these are as follows:

Trade Mark No.	Priority Date	Class of goods/services
484626 “REEF BRAZIL”	5 April 1988	Class 25: “Footwear, including sandals:
565847 “REEF BRAZIL” and device	23 October 1991	Class 25: “Clothing in this class”.
643028	12 October 1994	Class 25: “Clothing in this class excluding hosiery”
663509 “REEF BRAZIL”	9 June 1995	Class 18: “Leather and imitations of leather, and goods made of these materials, including bags, animal skins, hides; trunks and travelling bags; umbrellas”
663510 “REEF BRAZIL”	9 June 1995	Class 28: “Games and playthings; gymnastic and sporting articles including surfboards and body boards”
651542 “REEF”	30 January 1995	Class 25: “Clothing excluding wetsuits; footwear and headgear”
663507 “REEF”	9 June 1995	Class 18: “Leather and imitations of leather, and goods made of these materials, including bags, animal skins, hides; trunks and travelling bags; umbrellas”
663508 “REEF”	9 June 1995	Class 28: “Games and playthings; gymnastic and sporting articles including surfboards and body boards”
774420 “REEF” and device	30 September 1998	Class 25: “Clothing and footwear”

The application’s details, and two other registered trade marks owned by the applicant are as follows:

Trade Mark No.	Priority Date	Class of goods/services
1010666 “REEF Hunter”	13 July 2004	Class 25: “Clothing”
940072 “REEF HUNTER OCEAN BINOCULARS”	15 January 2003	Class 9: “Binoculars”
940073 “REEF Hunter Sunglasses”	15 January 2003	Class 9: “Sunglasses”

1. Under section 44(1), in order to establish the ground of opposition, it must be demonstrated that:

   1.at the priority date;

   2.there was a substantially identical or deceptively similar trade mark;

   3.in respect of similar goods;

   4.registered in the name of a person other than the opponent.[1]

   [1] Davison, M., Johnston, K and Kennedy, P, Shanahan’s Australian Law of Trade Marks & Passing Off  3^rd Ed., p.283

1. I note that all nine trade marks cited by the opponent satisfy the first and fourth requirement.  I further note that at least trade mark Nos. 565847, 643028, 651542 and 774420 are clearly in respect of similar goods to those of the application.  With regard to the second requirement, I note that the “REEF” trade marks bear a closer resemblance to the opposed “REEF Hunter” trade mark than the “REEF BRAZIL” trade marks.  The requirement of substantial identity or deceptive similarity need only be examined with respect to trade mark 651542.  This registration satisfies the other three requirements of the section 44(1) ground of opposition.  If the opposed trade mark cannot be shown to be either substantially identical or deceptively similar to this registration, then this requirement cannot be satisfied with respect to any of the other trade marks cited.  A finding of substantial identity or deceptive similarity with respect to 651542 will suffice to establish the ground of opposition.

Substantially Identical

1. The test to be applied in determining whether the trade marks are substantially identical is that formulated by Windeyer J in Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407, at 658, where it was stated:

   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.[2]

A side by side comparison of the “REEF” and “REEF Hunter” trade marks illustrates that the most relevant point of distinction is the inclusion of the word ‘Hunter’ in the opposed trade mark. The opponent submits:

The rendition of the trade mark where the first component REEF is in capitals and the second component Hunter is in lower case … means that the focus to all intents and purposes will be on the REEF component of the mark and that focus on the second component Hunter will not be so apparent. It therefore follows that the mark REEF Hunter is substantially identical to the Applicant’s [sic] Registered Trade Mark REEF and thus the Applicant is not the owner of the trade mark REEF Hunter.

While I agree that the capitalisation of REEF in the opposed trade mark does place the focus upon ‘reef’ rather than ‘hunter’, the inclusion of the word ‘hunter’ cannot be ignored.  In determining whether two trade marks are substantially identical, it is important to consider the general effect of the respective wholes.[3]  The addition of the word ‘Hunter’ – capitalised or not – creates dissimilarity between the two trade marks.  Any effect the capitalisation of this word has upon the ‘focus’ of the trade mark is better considered in assessing whether the marks in question are deceptively similar.  A side by side comparison of “REEF” and “REEF Hunter” does not elicit the level of overall resemblance for the marks to be said to be substantially identical.

[2] Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407, per Windeyer J at 658.

[3] Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326, per Bennett J at 335

Deceptively Similar

1. Section 10 of the Act states:

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.

A different test is applied in determining deceptive similarity than that applied in demonstrating substantial identity.  In determining deceptive similarity:

[T]he marks ought not … 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 … 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 usual manner in which ordinary people behave must be the test of what confusion or deception may be expected. Potential buyers of goods are not to be credited with any high perception or habitual caution. On the other hand, exceptional carelessness or stupidity may be disregarded.[4]

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

In Registrar of Trade Marks v Woolworths French J restated the propositions of Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 regarding deceptive similarity. These are:

(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 … 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 … the trade mark is likely to cause confusion if there is a real likelihood 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.[5]

[5] Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365, per French J at 382-383

1. It is apparent from the opponent’s submissions that it is contextual – rather than visual or aural – confusion which is of particular concern.  The concern is that:

Customers on perceiving the word REEF as part of a composite trade mark in relation to surfwear would obtain an impression that such a trade mark has some common affiliation with South Cone Inc or Reef Australia.[6]

The opponent presents evidence regarding the importance of brand consciousness in the surfwear industry.  I note two relevant points which must be considered in determining whether there is deceptive similarity in this case:

oCustomers in this particular industry are ‘brand conscious’ – in the sense that “they will assess the image of a product by reference to its brand or trade mark as part of their reason for its purchase.” (Statutory Declaration of Roderick John Barr, para.83);

oBrand extension (by which a brand such as REEF is extended beyond its core product) is commonplace in the surfwear industry. (Statutory Declaration of Roderick John Barr, paras 81, 82 and 86)

Noting these relevant considerations which relate to the nature of the customer and the circumstances in which the goods are sold, there does appear a real danger that customers would believe “REEF Hunter” to be a brand extension of the opponent’s “REEF” products.[7]

[6] See page 2 of the opponent’s submissions and the statutory declarations of Andrew Flitton, Steven Kay and Cameron Williams.

[7] See Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd (1993) 42 FCR 227 at 232 for a similar case.

1. The independent evidence lodged by the opponent supports this conclusion.  Specifically the statutory declarations of Andrew Flitton (para.3), Steven Kay (para.3) and Cameron Williams (para.3) attest that persons involved in the industry would mistakenly believe “REEF Hunter” products shared the same trade source as “REEF” products.  This evidence illustrates that an ordinary person may entertain reasonable doubt about whether the two trade marks share a common origin.  This conclusion is supported by the manner in which the “REEF Hunter” trade mark is presented.  The capitalisation of ‘REEF’ but not ‘Hunter’ focuses attention on ‘REEF’.  With the primary emphasis of the trade mark upon the word ‘REEF’, consumers are more likely to mistakenly believe the product in question is a composite trade mark associated with the “REEF” surfwear products of the opponent.

2. The declaration of Cameron Williams also notes (para.4) that “REEF” products are sold in trade channels beyond ‘surfwear outlets’.  If the application were registered as applied for, the applicant would be entitled to use it with respect to any goods falling within the broadly specified category ‘clothing’.  Without any evidence regarding the potential trade channels through which “REEF Hunter” products may be distributed, it must be concluded that there will be an element of overlap in the distribution of the products.  The evidence establishes that “REEF” products are distributed in both a niche market, and more widely through general clothing retailers.  The general nature of the distribution increases the likelihood of deception or confusion regarding the “REEF Hunter” trade mark.

3. Additionally, the opponent has been vigilant in protecting its “REEF” trade marks, filing a number of oppositions to other trade marks involving the word REEF prior to this matter.  In these prior decisions the opponent’s “REEF” and “REEF BRAZIL” trade marks have been held to be either substantially identical or deceptively similar to the following trade marks: ‘reef’; ; and .[8]

   [8] See the following Trade Marks and Designs Office decisions: South Cone Inc v Casio Keisanki

   Kabushiki Kaisha - (2001) 54 IPR 81; South Cone Inc v Stockline Pty Ltd - (2001) 52 IPR 575

4. Taking into account the obvious visual, aural and oral similarities between “REEF” and “REEF Hunter”, and the trade channels involved as discussed above, there is a real likelihood of deception and confusion in the marketplace between these trade marks.  An ordinary person would question whether “REEF Hunter” products are related to “REEF” products, whether simply a brand extension, (common in the clothing and surfwear trades), or as a product line of “REEF” clothing.  The opposed trade mark so nearly resembles the prior “REEF” trade mark that it is likely to cause confusion, and as such is deceptively similar.  This ground of opposition is established.

Section 60

1. This section reads:

   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.

In order to satisfy the onus, the opponent must show:

1.    that it had a reputation;

2.    the reputation was known by a substantial number of persons;

3.    the reputation existed at the date of the filing of the application - here 13 July 2004; and that,

4.    as a result of the reputation, a substantial number of persons likely to be concerned in the purchasing of the particular goods were likely to be deceived or confused if the applicant used the applied for trade mark.[9]

I have already found, in relation to the section44 ground, that the opponent has at least one trade marks deceptively similar to the application.  I must now assess whether elements 1 through 4 (above) have been satisfied.

[9] Southern Cross Refrigerating v Toowoomba Foundry, supra and The Kendall Company v Mulsyn Paint and Chemicals (1963) 109 CLR 300

1. Reputation may be proved by a variety of means including advertising (volume and cost) and sales figures and other forms of promotion.  Sales figures have been provided for the “REEF” marks within Australia for the years of 1991 - 2004, totaling over $115 million of sales for the goods of footwear, t-shirts, rash vests, socks, caps, hats, magnets, stickers, and key rings.  Whilst the advertising expenditure figures seem modest in relation to the sales revenue, many examples of the advertising used in various magazines have been provided.  Advertisements in Australia-wide publications such as “Australian Surfing Life”, “Tracks” and “Waves” magazines have been evidenced, as well as in-store displays, customer mail-outs, pamphlet distribution, attendance at trade-shows and competitions, and banners at public sporting events and surfing contests.  Additionally, the opponent sponsors several athletes to compete and train using REEF branded clothing and footwear, and to display the REEF brand on surf boards and other equipment.  There is a “REEF Team” of riders featuring in many advertisements, and also a group of woman known as the “REEF girls” and a promotion known as “Miss REEF”.

2. For the purposes of section 60 if the products are directed to particular markets, it is the reputation in those markets that needs to be assessed.  In relation to the surfing market I conclude that the opponent’s REEF and REEF Brazil trade marks are very well known by a substantial number of persons.  This reputation is in place well before the priority date in 2004.  The opponent’s marketing through more general publications including the magazines Marie Claire, Vogue, Playboy, and Elle, and major and regional newspapers, and also the distribution of the goods through general trade channels including General Pants Co, Shoe Biz and Stylemaster Mensland, leads to a conclusion that customers outside of the specialized surfing market may also be aware of the REEF brands.  I am satisfied that elements 1 through 3 are established.

3. When assessing the likelihood of deception or confusion for the purposes of section 60 the opponent’s trade mark need not be famous, but the trade marks should be used on similar goods and the chance of deception or confusion in the marketplace be real and tangible.  In this case both trade marks are used on a variety of clothing and there are several statutory declarations attesting to the high likelihood of customers being misled.  The increasing commonness and public awareness of brand extension, I believe, also heightens the opportunity for such confusion in this case.  As a result of the reputation of the REEF trade mark in the surf industry I am satisfied that there exists a high likelihood of deception and confusion if the applicant used the applied for trade mark.  The ground of opposition under section 60 is therefore established.

4. As grounds of opposition under both sections 44 and 60 have now been established with respect to the “REEF” trade mark this opposition as a whole is successful and there is no need to address the other grounds presented at the hearing. 

5. The opponent has established its opposition.  I refuse to register trade mark application 1010666.

Rachel Dunn

Hearing Officer

Trade Marks Hearings

3 August 2007