Southcorp Limited v Morris McKeeman

[2006] ATMO 48

TRADE MARKS ACT 1995

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

Re:Opposition by Southcorp Limited to registration of trade mark application 1018749(33) Tenfolds Grunge proceeding in the name of Morris McKeeman.

Delegate:

Iain Thompson

Representation:

Opponent

Alan Tilley of Southcorp Limited

Applicant

Christopher Bolden of Bolden, Lawyers and the applicant

Decision:

1. s52 opposition, ss 42, 44 and 60 – parody discussed - grounds not established.
2. Costs ordered against opponent.

Background

1.    Morris McKeeman, ('the applicant') of Tallandoon, in Victoria, has filed applications to register a trade mark, current details of which are:

App No:  1018749

Filing Date:  3 September 2004

Acceptance Advert:  13 January 2005

Services:Class: 33:  Wine

Trade Mark:  

2.    On 16 February 2005, Southcorp Limited, ('the opponent') filed Notice of Opposition (‘the Notices’) to the registration of the trade marks.  The Notice cites most of the available grounds under the Trade Marks Act 1995 (‘the Act’).

3. Evidence in support and evidence in answer, and the opponent’s further evidence, was duly served and filed in accordance with the Act and regulations thereto.

4.    As a delegate of the Registrar of Trade Marks, I heard the arguments of the parties, made by Christopher Bolden of Bolden, Lawyers (for the applicant) and Alan Tilley of Southcorp Limited, at a hearing in Melbourne on 6 June 2006. 

Evidence

5.    The evidence shows that the opponent is the owner of, arguably, the best known and most prestigious trade mark for wine that is made in Australia – PENFOLDS GRANGE.  The PENFOLDS GRANGE trade mark is registered under (inter alia) 814667(33).

6.    The iconic, or ‘bench mark’, status of the PENFOLDS GRANGE trade mark and wine has been referred to in the Courts, see for example, Merewyn Pty Limited & Ors v Simeon Wines Limited [2002] NSWSC 207; C A Henschke & Co v Rosemount Estates Pty Ltd [1999] FCA 1561; or, Terry Donald Hill v David Anthony James & Ors [2004] NSWSC 55.

7.    The point is not in dispute between the parties and I will not labour it: the wine sold under the trade mark PENFOLDS GRANGE has an extremely good reputation; as a consequence, so does the trade mark, to the extent that it is a commodity – many people buy it as an investment or collectible rather than to drink.

8.    The applicant, to my understanding, although he has established a vineyard or vineyards, has not, as yet, any product on the market.  The applicant intends to use the trade mark TENFOLDS GRUNGE in relation to the wines that he will produce.

Submissions

9.    .The opponent argues that the opposed trade mark obviously refers to its well-known trade mark and is deceptively similar to it or that its use will mislead and deceive.

10.   The applicant (although it did argue very faintly that the opposed trade mark made no reference to the opponent’s PENFOLDS GRANGE) states that, if the applicant’s trade mark does refer to the opponent’s trade mark, it is no more than a ‘cheeky reference’ and the differences between the trade marks are such that they are not deceptively similar or such that the concurrent use of the trade marks would not mislead or deceive.

11.   The opponent’s grounds are under sections 42 of the various States Fair Trading Acts via section 42 of Trade Marks Act 1995[1], and sections 44 and 60 of the Trade Marks Act 1995.

[1] Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683

Discussion

12.   This matter can be conveniently disposed of by first discussing the general principles which are involved and then considering whether the opponent has established its opposition under the three grounds on which it was argued.

13. Given the preceding registration and reputation of the opponent’s trade mark, and the identity of the goods, the opponent must (in terms of sections 44 and 60) establish to my satisfaction that the notional or actual use of the opposed trade mark would be likely to confuse or deceive.

14.   As regards ‘deceptive similarity’, in Registrar of Trade Marks v Woolworths (1999) 45 IPR 411, French J, with Tamberlin J agreeing, made the following propositions:

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

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

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

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

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

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

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

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

1. As regards whether the use of the opposed trade mark would mislead or deceive in terms of the Fair Trading Acts, in Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431 at 440-442, Hill J set out the following principles, concerning section 52 of the Trade Practices Act 1974 (which are also applicable to section 42 of the Fair Trading Acts as they may apply to individuals, rather than companies):

   1.  For conduct to be misleading or deceptive the conduct must convey in all the circumstances of the case a misrepresentation: 

   2. There will however be no contravention of s.52(1) of the Act unless error or misconception results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible:

   3.  Conduct will be likely to mislead or deceive if there is a "real or not remote chance or possibility" of misleading or deception regardless of whether it is less or more than 50%.  The question of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective question which the Court must determine for itself.  Hence evidence that persons in the relevant class have been misled will, although admissible, not be determinative.  In some cases however such evidence will be very persuasive.

   4.  Conduct of a corporation causing mere confusion or uncertainty in the minds of the public in the sense that they may be caused to wonder whether two products may have come from the same source is not necessarily coextensive with misleading or deceptive conduct: Since actual deception need not be shown the Court must consider whether a reasonably significant number of potential purchasers would be likely to be misled or deceived: The test in passing off cases is usually expressed as being whether a "substantial number of persons likely to become purchasers ... are liable to be deceived by the defendant's use of the name.  On the other hand it is not necessary to show that all, or substantially all, persons in the market associate the name with the plaintiff's goods, if this can be shown of a substantial proportion of persons who are probably purchasers of the goods of the kind in question."

   5.  In a case such as the present the applicant must establish that it has acquired the relevant reputation in the name, that is to say that the name had become distinctive of the applicant's business in a particular country or geographical area.  However at least in some circumstances very slight activities may be found to be sufficient to establish that a name has become distinctive of a person's business in a particular country.

   6. Section 52 is not confined to conduct which is intended to mislead or deceive and a corporation which acts honestly and reasonably may none the less engage in conduct that is likely to mislead or deceive.

   16.   It appears to me to be without doubt that the opposed trade mark TENFOLDS GRUNGE has been coined with the opponent’s trade mark in mind.  There is some suggestion by the applicant, in his evidence, that he has a tenfold appreciation of wine and ‘grunge’ is a name for the sediment that settles around the cork of a bottle.  I don’t place much weight on this explanation:  the word ‘tenfolds’ is a semantic oddity that stands at odds with the rationalisation suggested by the applicant and, for reasons that will become clearer later in these reasons, if the trade mark should be viewed as such by the public, it should not in any event bolster the applicant’s arguments.

   17.   While the applicant has argued that the opposed trade mark, if anything, makes a ‘cheeky reference’ to the trade mark PENFOLDS GRANGE, I think that the correct approach to this matter is that it is a ‘parody case’ – not that I commence by thinking that the applicant has established that the opposed trade mark is a parody or that the opponent has done otherwise, just that the principles enunciated by the Courts in relation to ‘parody cases’, or where parody has been discussed, are applicable here. 

   18.   There is no doubt that the opposed trade mark makes a play on, or reference to, the PENFOLDS GRANGE trade mark.  The semantic oddity in the word ‘tenfolds’ within the opposed trade mark brings it into accord with the same oddity within the opponent’s trade mark.  (It is an oddity because the grammatically correct construction should be ‘Penfold’s’ with a possessive apostrophe after the surname).  The evidence and submissions of the opponent are that the apostrophe was historically present in the opponent’s trade mark but has been dropped due to pressure from the advertising folk who like a ‘clean’ label.

   19. However, the fact that the applied-for trade mark might ape, mimic or parody the opponent’s trade mark does not in itself disbar it from registration. Disentitlement to registration occurs where the applicant’s trade mark is (in terms of section 44) deceptively similar to the opponent’s trade mark in that it is likely to deceive or cause confusion[2]; or that, (in terms of section 60) because of the deceptive similarity of the trade marks and the reputation of the opposed trade mark, the use of the opposed trade mark would deceive or cause confusion; or that, (in terms of the States Fair Trading Acts) the use of the opposed trade mark is likely to mislead or deceive.

   [2] See section 10 of the Act

   20.   The approach of the Courts in cases where parody is claimed is to consider each instance on its facts. 

   21.   In Pacific Dunlop Ltd v Hogan (1989) 14 IPR 398; 87 ALR 14, Burchett J stated at IPR 430:

   The suggestion in the present case, as his Honour found the facts, was of an endorsement of the appellant’s shoes by Mr Hogan’s almost universally appreciated Crocodile Dundee personality, and through that of an association between Mr Hogan and the product so ensorsed. The television audience would accordingly hold the shoes in higher regard. On the evidence, some evocation of Crocodile Dundee was admittedly both intended and achieved; I do not see any basis for disturbing Gummow J’s view of its true effect. That view owed much to the special nature and circumstances of Mr Hogan’s portrayal of a character really indistinguishable from his own public image. It is, too, consistent with the concession made by the advertisement’s author, as noted by his Honour (ALR at 410; IPR at 232), “that the intention of the advertisement was that viewers should get an impression of Crocodile Dundee in connection with Grosby shoes”. I reject the appellant’s attempt to avoid, by miscalling its advertisement a parody, the consequences of representing Crocodile Dundee (actually addressed in the advertisement by his name Mick) as endorsing its shoes. The essence of Mr Hogan’s performance is parody, which can hardly itself be parodied, at least by what would be more accurately described as a parasitic copy — parasitic because its vitality is drawn entirely from the audience’s memory of the original. As well might an attempt to imitate “HMS Pinafore” be called a parody of Gilbert and Sullivan!

   22.   Thus, the parody, if it be such, must be of a nature that it is immediately and principally recognizable as both parody and distinct from the original and not imply some endorsement by the its owner, or a connection with the original or its owner such that the goods would be seen by the public as originating from the owner of the original. 

   23.   In Coca-Cola Company v All-Fect Distributors Ltd (T/as Millers Distributing Company) (1998) 43 IPR 47 Merkel J observed

   An analogous commercial use, which has also been held to fall short of representing a trade or commercial connection, can arise when an imitation product is created as a parody. In Nike Inc v “Just Did It'’ Enterprises 6 F 3d 1225 (7th Cir 1993 at 1227–8 the United States Court of Appeals for the Seventh Circuit said:

   Parodies date back as far as Greek antiquity … “Parody or satire, as we understand it, is when one artist, for comic effect or social commentary, closely imitates the style of another artist and in so doing creates a new art work that makes ridiculous the style and expression of the original'’ … But parodies have a legal hurdle to overcome. Federal law prohibits copies or imitations that confuse consumers … This protects trademarks as a form of intellectual property … and guards against confusion, deception or mistake by the consuming public … Whether a customer is confused is the ultimate question. If the defendant employs a successful parody, the customer would not be confused, but amused … Thus, we agree with the district court that parody is not an affirmative defence but an additional factor in the analysis. “[T]he keystone of parody is imitation. It is hard to imagine, for example, a successful parody of Time magazine that did not reproduce Time’s trade marked red border. A parody must convey two simultaneous — and contradictory — messages: that it is the original, but also that is not the original and is instead a parody. To the extent that it does only the former but not the latter, it is not only a poor parody, but also vulnerable under trade mark law, since the customer will be confused'’ … Thus the parody has to be a take-off, not a rip-off.

   24.   Merkel J continued with the caution that:

   However, as was said by Lehane J in McIlhenny[3] (citing authority at 195–6) many cases are illustrative of circumstances:

   … where in the public mind the association between a particular image and a particular source is so strong that the evocation of the image in the get-up or marketing of a wide range of disparate goods or services will lead people to conclude that there is a commercial connection of some kind between the goods or services and the originator (or “owner'’) of the image.

   The authorities demonstrate that in the final analysis each case will turn on its own facts.

   [3] Mcilhenny Company v Blue Yonder Holdings Pty Ltd (formerly t/as Tabasco Design) and Another (1997) 39 IPR 187, reputation of trade mark in relation to ‘chilli sauce’ versus use in relation to design services.

   25.   The question essentially resolves itself to my estimate of the impression that a member of the public who knows of the trade mark PENFOLDS GRANGE will form of the trade mark TENFOLDS GRUNGE.  I note, in this regard, that each word in the opposed trade mark is only one letter different from the original and that the grammatical inexactitude in the word ‘tenfolds’ tears slightly at the edges of the opposed trade mark’s claims to be a parody or cheeky reference.  It might be dangerous to analyse the similarities any further since I am not to consider the trade marks side by side and am to estimate the impression formed in the minds of the public, rather than to engage in obscure linguistic analysis.

   26.   The word ‘grunge’ is one that stands in its own right as an English word and would be known to most people.  The American Heritage Dictionary of the English Language, Fourth Edition gives the meaning:

   grunge    n. Slang

   Filth; dirt.

   A style of rock music that incorporates elements of punk rock and heavy metal, popularized in the early 1990s and often marked by lyrics exhibiting nihilism, dissatisfaction, or apathy.

   27.   The word has also being applied to a style of clothing associated with, or adopted by, the exponents or devotees of ‘grunge music’.  The word additionally has some utility in computing, referring to computer code that is inaccessible due to changes in other parts of the program; moreover, it is also obscurely used in the wine trade to refer to the sediment that settles around the cork in racked bottles.  Most members of the public, I consider, would at least be aware of the denotation of the word ‘grunge’ as meaning dirt, filth, grime, soil, stain or grease.

   28.   After some prolonged consideration, I am not satisfied, in the end, that the opponent has established any of its grounds.  I have considered at some length the likelihood that members of the public will, because of the similarities of the trade marks will think that there must be some sort of connection between the parties or the goods in question; including the possibility that people will think that there must be some sort of connection because otherwise the opponent would have prevented the opposed trade mark’s use.  However, the converse is also true – if the goods sold under the opposed trade mark are present in the marketplace it could also be taken as a sign that the opponent could not prevent its use. 

   29. The opposed trade mark is an obvious parody that, to my mind, sets it completely apart from the PENFOLDS GRANGE trade mark and, as such, deception or confusion under sections 44 and 60 or people being mislead or deceived under section 42 of the Fair Trading Acts is unlikely.

   30.   The immediate impact of the opposed trade mark is that it simultaneously makes reference to, yet is quite different from, the trade mark PENFOLDS GRANGE.

   31.   The opponent’s concerns are completely understandable; however, I do not think that the use of the opposed trade mark would confuse or deceive or mislead and deceive.  The opponent does have the consolation that the applicant runs the obvious risk that most people would infer that the parody within his trade mark should also apply to the quality of his goods – that is, that they are a poor imitation.  It is difficult to understand how the opponent’s goods to be sold under the opposed trade mark could ever stand on their own or be accepted by the public for their own intrinsic worth.  Without a broader message contained in the parody,[4] such a product is, in my view, doomed to be a short-lived novelty – however, that is the applicant’s business.

   [4] Such as the implicit ‘buy Australian’ message in the ‘Dickheads’ trade mark Intermatch Sweden Aktiebolag v Dick Smith Investments Pty Ltd [2003] ATMO 18, (2003) 56 IPR 575, (2003) AIPC 91-878

   32.   The grounds under sections 42, 44 and 60 have not been established by the opponent.

   Decision

   33. Section 55 of the Act provides:

   55. Unless the proceedings are discontinued or dismissed, the Registrar must, at the end, decide:

   (a) to refuse to register the trade mark; or
   (b) to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

   having regard to the extent (if any) to which any ground on which the application was opposed has been established.

   Note:  For limitations see section 6.

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

   Costs

   35.   The applicant is entitled to his costs in relation and I order costs against the applicant at the official scale.

   Iain Thompson

   Hearing Officer

   Trade Marks Hearings

   19 June 2006