Sparco SpA v Nike International Ltd

[2011] ATMO 81

TRADE MARKS ACT 1995

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

Re:Opposition by Sparco SpA to registration of trade mark application 1236202(25) - SPARQ - filed in the name of Nike International Ltd.

Delegate:

Alison Windsor

Representation:

Opponent:  Ian Horak of counsel instructed by Phillips Ormonde & Fitzpatrick Patent and Trade Mark attorneys

Applicant:  Khajaque Kortian of Spruson & Ferguson Patent and Trade Mark attorneys

Decision:

2011 ATMO 81

S52 opposition: Grounds under ss 44, 60 and 42(b) pursued – no grounds established – application to proceed to registration – costs awarded against Opponent.

Background

1. Nike International Ltd (‘the Applicant’) applied to register a trade mark under the provisions of the Trade Marks Act 1995 (‘the Act’).  Current details of the application are as follows:

Application number:  1236202

Filed on:  18 April 2008

Class/goods:Class 25:  Clothing including pants, shorts, shirts, T-shirts, pullovers, jerseys, warm-up suits, sweat shirts, sweat pants, underwear, sports bras, dresses, skirts sweaters, jackets, socks, headbands, sweatbands, gloves, belts, hosiery, coats and vests; footwear; headgear including hats, caps and visors

Trade mark:  SPARQ

1. The application was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 30 April 2009.  On 27 July 2009, Sparco SpA (‘the Opponent’) filed notice of opposition (‘the Notice’) citing all the grounds of opposition likely to be relevant to the case in point.

2. The parties filed and served evidence in accordance with the provisions of the Trade Mark Regulations 1995 (‘the Regulations’).  Following service of the Opponent’s evidence in reply, the Applicant asked to be heard.  The Opponent advised of its intention to attend the hearing, and the matter was set down for hearing in Canberra.

3. The day before the hearing was due to take place the Applicant filed a declaration which it said had been foreshadowed in its outline of submissions and which, it submitted, contained no information which the Opponent did not already know.  I will refer to this matter later in this decision.

4. As a delegate of the Registrar of Trade Marks I heard the parties in Canberra on 8 July 2011.  The Opponent was represented by Ian Horak of counsel, instructed by Phillips Ormonde and Fitzpatrick, Patent and Trade Mark attorneys.  Khajaque Kortian, principal of Spruson & Ferguson Patent and Trade Mark attorneys represented the Applicant, appearing by telephone conference.

Grounds of opposition pursued

1. Despite having nominated a wide range of grounds on the Notice, prior to the hearing the Opponent advised that it intended to pursue only those grounds relevant to sections 44 and 60 and paragraph 42(b) of the Act. For completeness I find that the grounds nominated on the Notice but not pursued at the hearing are not established.

2. In respect of the section 44 ground, the Opponent noted a number of its pre-existing trade mark registrations. The two registrations which are most relevant and to which the Opponent referred during the hearing are shown in the following table.

Number	Priority date	Trade Mark	Class/Goods
624286	8 March 1994	Class 25:  All goods in class 25; clothing including overalls, headgear, footwear including socks and shoes; sports wear  including T-shirts, polo shirts, jackets, trousers, pile-sweaters, hoods; gloves, parts of and accessories for the aforegoing goods included in class 25
776979	30 October 1998	SPARCO	Class 9:  Life-saving, life preserving and fire-extinguishing apparatus and instruments; protective clothing, footwear, headgear and helmets; fire-proof clothing and overalls, batteries, fire extinguishers and life-belts; parts of and accessories in this class for the aforegoing goods Class 12:  Car seats and racing car seats and other spare parts and accessories in this class for cars including security belts and security harnesses for vehicles but excluding spare parts and accessories in this class for transmission for land vehicles; roll bars and other protective devices in class 12, reinforcement bars; steering wheels, springs and fittings for vehicle suspension, exhaust tubes, shock absorbers, alloy aluminium rims, filters and special gasoline tanks all being parts of automobiles Class 25:  Clothing including overalls, headgear, footwear including socks and shoes; sports wear including T-shirts, polo-shirts, jackets, trousers, pile sweaters, hoods; gloves

Onus and standard of proof

1. Mr Kortian, on behalf of the Applicant, made quite lengthy submissions on the matter of the standard of proof relevant to deciding a trade mark opposition.  The parties agreed that the onus is on the Opponent to establish at least one ground of opposition.  They did not agree on the appropriate standard of proof. 

2. Mr Kortian summarized his case by saying that “the Opponent must establish its grounds on the balance of probabilities” but the “quality of persuasion necessary”[1] is that “the strength of evidence must clearly establish the ground of opposition and satisfy the Registrar that the trade mark should clearly not be registered”.  He said that these tenets apply particularly where there is a presumption of law involved (such as the presumption of registrability) and there are serious consequences involved (such as the quasi-summary nature of proceedings in opposition and the ability of the Opponent to bring expungement proceedings at a later date). 

   [1] Briginshaw v Briginshaw (1938) 60 CLR 336 at 362-363 (HCA)

3. Mr Horak for the Opponent specified that the appropriate standard of proof was that of the balance of probabilities and referred specifically to the decision of Gyles J in Pfizer Products Inc v Karam (2006)70 IPR 599.

4. Delegates of the Registrar have followed the approach of Gyles J since Pfizer v Karam issued in December 2006.  More recently, Kenny J in Sports Warehouse[2] made the following comments in support of the standard of proof being that of the balance of probabilities:

   [2] Sports Warehouse Inc v Fry Consulting (2010) 87 IPR 300 at [36] to [39]

   In Pfizer Products, Gyles J set out his reasons for concluding that the ordinary balance of probabilities standard applied. After noting that the observation in Lomas was obiter dictum and not the subject of argument, Gyles J discussed the authorities in some detail. While his Honour accepted that there was a presumption of registrability, according to his Honour (at [18]), this presumption said “nothing as to the standard of proof and d[id] not carry with it an obligation to “clearly” establish a ground of opposition”. Gyles J went on to say that (at [21]–[22]):

   The fundamental difficulty with [the respondent’s] argument is that it is inconsistent with the language of s 55. Whether a ground of opposition has been “established” is a conventional concept requiring no particular elucidation. In my opinion, there is no basis upon which the section can be read as “the extent (if any) to which any ground on which the application was opposed has been clearly established”, particularly where that implication changes the practical operation of the section by imposing a special high onus of proof. It is also worth noting that the construction favoured in Torpedoes is not rooted in the words of the section at all. The precise finding in that case was that the opposition “should be upheld only if the court is satisfied that the trade mark should clearly not be registered”: at [22]. With all respect, that test is not to be found in the statute. I cannot find anything in the structure or content of other provisions of the 1995 Act that would point to reading s 55 other than according to its ordinary meaning.

   In my opinion, it is not permissible to put a gloss on the clear words of the section by reference to extrinsic material. The discussion of the Working Party Report by Lander J in [Kowa] adequately discloses the difficulty. Furthermore, it can be taken that implementation of the recommendation of the working party about the bringing of opposition proceedings in trade marks into agreement with those applicable to patents “where appropriate” was effected, so far as was regarded as appropriate, by the 1995 Act and Regulations made under the 1995 Act. In my opinion, borrowing further from the field of patents in this respect is impermissible, to adopt the word used by Finkelstein J. Trade marks and patents are different species of intellectual property and have a different history. A general desire for uniformity cannot control construction of the statute governing each.

   Gyles J concluded that (at [26]):

   [26] I am faced with the clear words of the statute, on one hand, and the opinions of various judges, on the other. There is no binding Full Court authority. I cannot find any instance where a single judge has actually applied the higher standard. In my opinion, in this case, comity does not demand that I depart from my view as to the meaning of the statute.

   In Chocolaterie Guylian at [26], Sundberg J stated that he preferred the approach of Gyles J. Sundberg J said (at [26]) that, in his view, “there [was] nothing in the relevant provisions that support[ed] the imposition of a higher standard, even at the acceptance stage”. In the same paragraph, Sundberg J went on to say:

   [26] The “presumption of registrability” arises from s 33 of the Act: Woolworths (1999) 93 FCR 365 ; 45 IPR 411 ; [1999] FCA 1020 at [24]; Kenman Kandy (2002) 122 FCR 494 ; 56 IPR 30 ; [2002] FCAFC 273 at [50]. Section 33 does not speak of being “clearly satisfied”; it mandates acceptance of an application unless the Registrar “is satisfied that … there are grounds for rejecting it”. On this point, I prefer the views expressed by Gyles J and in particular his Honour’s observations that an acceptance that there is a presumption of registrability “says nothing as to the standard of proof” and does not import a higher threshold than the conventional balance of probabilities: see Pfizer … at [18]. The presumption as it is gives effect to the general position under the Act that an Applicant is not required to establish an absence of grounds to refuse or object to registration. It should also be noted that in both Woolworths 93 FCR 365 and Kenman Kandy 122 FCR 494 (both acceptance stage cases) there [was] no suggestion that any special higher standard was applicable.

   Given the state of the authorities, the interests of comity favour neither side. For the reasons stated by Sundberg J in Chocolaterie Guylian at [26] and by Gyles J in Pfizer Products at [18], I too am of the view that, where the Opponent bears the onus, that onus is to be discharged in the ordinary way. That is, there is no requirement for an Opponent to show that the trade mark is clearly not to be registered. Sections 55 and 56 do not warrant the introduction of this standard, and no other statutory provision supports it. The contrary argument relies heavily on the word “extent” in the expression “the extent (if any) to which any ground … has been established” in s 55 of the Act. In my view, the word cannot bear the weight and I reject the argument. (Emphasis added.)

5. I note that Mr Kortian cited neither Federal Court judgements nor decisions by the Registrar dating any more recently than the middle of 2006 in support of his arguments for the higher standard of proof.  I am satisfied that matters have progressed since that time, and it is correct and appropriate practice to make the decision on the basis of the principles noted by Kenny, Gyles and Sundberg JJ, as originally stated by Branson J in Oregon[3]:

   Where the Act requires the Registrar to be “satisfied” of any matter, it is to be understood as requiring that he or she be persuaded of the matter according to the balance of probabilities … That is, that the Registrar be persuaded, having given proper consideration to those factors and circumstances that the Act requires him or her to give consideration to, that such matter is more probable than not.

I will make my decision in this matter on that basis.

[3] Blount Inc v Registrar of Trade Marks (1998) 40 IPR 498

Additional declaration

1. As previously noted, on the day before the matter was set down to be heard, the Applicant filed the declaration of Khajaque Kortian made on 7 July 2011.  Mr Kortian advised in the e-mail accompanying the declaration that it was filed in response to the material contained within the evidence in reply, which he maintained was not properly evidence in reply, and as its subject matter related to facts already known to the Opponent, he submitted that the Opponent was not prejudiced by the declaration.

2. At the hearing, I advised the parties that I would take submissions on the matter of the additional declaration prior to dealing with the substantive matters of the opposition.  Mr Horak for the Opponent stated that he objected to the declaration being allowed into proceedings because it was indeed further evidence, it had little relevance to the matter in hand and as such should not be given any significant weight.  Mr Kortian argued that the material was provided in response to the Opponent’s declaration provided as evidence in reply, which he said was not properly in reply but the provision of new evidence, and as such was quite relevant to support the Applicant’s case.

3. However, upon consideration of the matter, I have not allowed Mr Kortian’s declaration into the evidence in this opposition.  There are two reasons for this.  One is that the Applicant has not complied with the provisions of Regulation 5.15.  No application for permission to serve further evidence has been made, and the required fee was not paid.  Secondly, I am of the opinion that the material within the declaration has no relevance at all to the matter in hand.  While it may have been provided in response to the Opponent’s putative evidence in reply, it adds nothing to the Applicant’s case.  Since it will have no impact at all on the decision I will make in this matter, I refuse permission for the declaration to be entered as evidence.

Evidence

1. The evidence filed and served by the parties in this matter consists of the following declarations:

   Evidence in support

   ·Aurelio Sportelli, made 25 January 2010, with Exhibits AS-1 to AS-17 (Sportelli 1)

   Evidence in answer

   ·Michael Goodman, made 10 August 2010 with Exhibits MG-1

   to MG-5 (noting that Exhibit MG-3 is claimed as confidential)

   Evidence in Reply

   ·Aurelio Sportelli, made 26 January 2011, with Exhibits AS-1 to AS-5 (Sportelli 2)

2. Mr Sportelli is coordinator of markets and business for the Opponent.  Sportelli 1 provides a history of the trade mark SPARCO.  Mr Sportelli says that the word has been used since 1979 as a company name, a trade name and a trade mark.  He says that the Opponent’s “activities lie broadly in the field of fire-proof wear and its products including clothing, seating, footwear and accessories for automobile sports and goods for racing, karting and tuning and related products including sportswear, leisure clothing and accessories”.  He says that the Opponent is the world leader in fire-proof wear and its products are endorsed by professional and world champions in automobile racing competitions and series worldwide.  These racing competitions include Formula One, Winston Cup, World Rally Championship, Championship Auto Racing Teams (CART), and Indy Racing League (IRL).

3. The Opponent is the owner of a number of other trade mark registrations for trade marks incorporating the word SPARCO throughout the world.  Exhibit AS-9 to Sportelli 1 provides a list of over 150 trade marks which consist of or contain the word SPARCO and which have been applied for or are registered in many countries worldwide.  

4. Mr Sportelli states that the SPARCO trade mark has been used in Australia since 1996 and in respect of a range of clothing including race suits, gloves and boots; mechanic’s suits and gloves; boots, gloves, socks, vests and protective underwear.  In addition, the trade mark has been used in respect of helmets, helmet intercom systems, racing seats and accessories, race harnesses and helmet bags, sports bags and travel bags, amongst other things. 

5. The Opponent’s goods are sold under licence in Australia, Mr Sportelli says.  The licensee is an entity known as International Karting Distributors (‘IKD’).  IKD runs the website ‘ and offers a range of racing, tuning, karting and sports gear for sale through the website.  Mr Sportelli says that IKD began distributing products bearing the Opponent’s trade marks seven years prior to his making the declaration, that is, in 2003.  He says that IKD has made significant sales per annum of goods bearing the mark in Australia.[4]  Sales worldwide amount to many millions of dollars.

   [4] The figure quoted appears to refer to the full range of goods which the Opponent offers.  It is not restricted to clothing and similar goods.

6. IKD advertises the SPARCO products in specialist motorsport, karting and car based media, including various magazines.  It also has commercial agreements with leading V8 Supercar drivers, including Craig Lowndes and Dick Johnson, to endorse the products.  Mr Sportelli notes that the SPARCO trade mark as it appears on the goods is often partially obscured so that only part of the trade mark is visible, and he provides photographs of the trade mark on various items of clothing especially where the word may be partially obscured because of the driver’s stance, or the equipment surrounding him.

7. Sportelli 2 was served and filed as evidence in reply to the Applicant’s evidence in answer.  It is largely in response to a paragraph in the Goodman declaration which forms the Applicant’s evidence in answer.  Mr Sportelli states the following:

   The Goodman declaration states that Mr Goodman is not aware of any confusion between the SPARQ name and the trade mark SPARCO.  The implication could be drawn that no confusion is likely to arise between the trade marks.

   However, confusion has been found likely to arise between the trade marks SPARCO and SPARQ by the relevant trade mark authorities in Columbia, Ecuador and Switzerland.   

8. Exhibited to the declaration are copies of translations of decisions relevant to the three countries noted above.  Mr Sportelli also says that the Opponent has successfully opposed the Applicant’s trade mark in Turkey.  Similarly, he says, an opposition action in Canada resulted in the Applicant being deemed to have abandoned its trade mark there.

9. Mr Goodman is the assistant secretary of the Applicant and in his declaration provided as evidence in answer, states that the Applicant has been using the SPARQ trade mark in the United States of America since at least as early as April 2004.  He says it has been used, in particular, for sporting goods and services in the field of athletic training since that time, and for footwear, clothing and bags since at least as early as March 2008.  The SPARQ website has been active since April 2004, Mr Goodman states, and has been accessible world wide, including in Australia, since that time. 

10. Mr Goodman states that the Applicant has been using the trade mark in respect of the relevant goods in Australia since about September 2008.  Exhibit MG-2 to his declaration provides pictures of four different kinds of athletic shoes which are annotated as having been sold in Australia within the period September 2008 to March 2010.  Confidential exhibit MG-3 contains wholesale sales figures for goods sold under the trade mark in Australia between September 2008 and April 2010.  These figures can only be described as extremely modest.  Mr Goodman states that global wholesale sales for SPARQ products from February 2007 to 2010 netted many millions of dollars for footwear, apparel and equipment.

11. The Applicant also has registered its trade mark in a number of different countries, though it has many fewer registrations than the Opponent.  It has two registrations in Australia, these being registration 1036595 in classes 5 and 32, and International Registration 861465 (Australian registration 1078889) in classes 9, 16, 28, 38 and 41. 

Discussion and reasons

1. The Opponent pursued three grounds for opposition at the hearing. The first one which I will consider is the ground under section 44 of the Act.

Section 44 – identical etc trade marks

1. Subsection 44(1) is relevant to the present circumstances.  It provides that an application for registration must be rejected if the applied for trade mark is substantially identical with, or deceptively similar to, the trade mark of another person’s application or registration that has an earlier priority date and covers similar goods or closely related services to those the Applicant is claiming. 

2. The Opponent submitted that the two trade marks are deceptively similar.  The expression ‘deceptively similar’ is defined in section 10 as follows: 

   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. 

3. Section 14 defines ‘similar goods’ as follows:

   (1)For the purposes of this Act, goods are similar to other goods:

   (a)if they are the same as the other goods; or

   (b)if they are of the same description as that of the other goods.

4. Both parties to this opposition are claiming goods which are classified in class 25, namely a broad range, in both cases, of clothing goods.  Indeed, the Opponent’s registration 684826 which was registered under the repealed Trade Marks Act 1955 is registered for ‘all goods in class 25’. Since the Opponent’s nominated registrations both have earlier priority dates than that of the Applicant’s trade mark, the remaining matter which will decide whether the provisions of section 44 must be applied adversely to the application is whether the trade marks are deceptively similar.

5. The Opponent submitted that the Applicant’s trade mark is deceptively similar to its SPARCO trade marks.  It argued that the first component of each trade mark is the phonetic equivalent of the English word ‘spark’, and that this phonetic similarity is relevant to the issue of deceptive similarity.  The only difference phonetically between the Applicant’s trade mark and its SPARCO trade marks is the letter ‘O’ at the end of the latter which, the Opponent argued, does not help to distinguish the trade marks. 

6. In addition, the Opponent submitted, there is likely to be imperfect recollection of the trade marks by reference to phonetic identity with the word ‘spark’, and this phonetic similarity has been admitted to by the Applicant in its submissions to the trade marks Office.  The Opponent also argued that the net impression which consumers would form of the trade marks would be of two invented and meaningless words which have aural similarities and are visually similar because both begin with the letters SPAR- and end in a similar appearing rounded letter, namely ‘-O’ or ‘–Q’.

7. The Applicant, as is to be expected, did not agree with these submissions.  It considered that the trade marks were distinguishable one from the other because, while both have the same prefix, the endings are clearly different resulting in both trade marks being visually and phonetically distinguishable.  It noted that the Applicant’s trade mark has only one syllable, while that of the Opponent clearly contains two.  In addition, the Applicant considered that the Opponent’s trade mark was a foreign word and on that basis could be further distinguished from the Applicant’s trade mark.    

8. The Applicant made quite detailed submissions in support of a consideration of the state of the Register in respect of determining deceptive similarity.  It provided a list of trade marks already on the Register which it considered demonstrated that the Register reflects the ability of the trade mark to co-exist with others which include similar components.  It said:

   Whilst the state of the Register cannot be decisive with regard to the consideration of whether a trade mark is deceptively similar, the state of the Register can and does clearly demonstrate that the prefix “spark…” (or its phonetical equivalents such as “sparc…”, “sparx…” or “sparq”) is common to the trade in respect of Class 25 goods and no party may claim exclusive rights to that prefix.  That evidence is a critical factor in determining whether the Trade Mark “SPARQ” is deceptively similar to the Opponents “SPARCO” or “SPARCO” (stylised) trade marks.

9. The Applicant went on to comment that confusion would be unlikely between the trade marks because of the nature of the goods each party provides.  It considered that clothing is bought with due care and attention, unlike goods such as small cost grocery or personal care products which may be quickly selected whilst walking down a supermarket isle.  It also noted that the two trade marks already co-exist upon the Register and in other common-law jurisdictions without any apparent confusion. 

10. Before moving on to the actual comparison of the trade marks, I think it is appropriate to point out that I do not consider the Applicant’s arguments in respect of the state of the Register to be persuasive in this instance. While it may be appropriate to consider what is recorded on the Register, and indeed it is a requirement that this be done in order to examine an application in respect of the provisions of section 44, I am not convinced that these entries should be the decisive factor in deciding whether these two trade marks are deceptively similar. I consider the words of Wilcox J in Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) 47 IPR 579 (at 590) to be relevant in this respect:

    [35] The second matter mentioned by Ms Baird is that Ocean Spray adduced evidence of other registered marks that contain, or consist wholly of, the word “Classic”. That evidence should be disregarded, for the reasons expressed by Jacob J in British Sugar at 305:

    Both sides invited me to have regard to the state of the register. Some traders have registered marks consisting of or incorporating the word ``Treat'’. I do not think this assists the factual inquiry one way or the other, save perhaps to confirm that this is the sort of word in which traders would like a monopoly. In particular the state of the register does not tell you what is actually happening out in the market and in any event one has no idea what the circumstances were which led the registrar to put the marks concerned on the register. It has long been held under the old Act that comparison with other marks on the register is in principle irrelevant when considering a particular mark tendered for registration, see eg Re ``Madame'’ Trade Mark [1966] RPC 541 and the same must be true under the 1994 Act. I disregard the state of the register evidence.

    I add only that, although consistency in public administration is desirable, a public officer is not justified in persisting with error. Marks may, in the past, have been wrongly registered. It would be an unwarranted distraction from the task at hand to investigate, in a particular case, whether they were or not.”

11. In considering whether these two trade marks are deceptively similar, I rely upon the often quoted comments of Windeyer J in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 414-415:

    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. To quote Lord Radcliffe again: ‘The likelihood of confusion or deception in such cases is not disproved by placing the two  marks  side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the  marks  clearly before him . . . . It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that  marks  are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole’: de Cordova v. Vick Chemical Co (1951) 68 RPC, at p 106. And in Australian Woollen Mills Ltd v. F.S. Walton & Co. Ltd. (1937) 58 CLR 641 Dixon and McTiernan JJ. said: ‘In deciding this question, the marks ought not, of course, to be compared side by side. An attempt should be made to estimate the effect or impression produced on the mind of potential customers by the mark or device for which the protection of an injunction is sought. The impression or recollection which is carried away and retained is necessarily the basis of any mistaken belief that the challenged mark or device is the same’ (1937) 58 CLR, at p 658.

12. Both parties referred to the additional syllable in the Opponent’s trade mark.  The Opponent considered that the final letter ‘O’ in SPARCO would be likely to be either visually confused with the letter ‘Q’ on the end of the Applicant’s trade mark, or slurred or dropped off when the words were spoken in certain circumstances (such as in a place with a noisy background).  The Applicant, not surprisingly, did not think the same.

13. To my mind the ‘O’ suffix in the Opponent’s SPARCO trade marks is not something which will be likely to be ignored or elided from the word, either when spoken or written.  While it is possible that it could be obscured when it is printed on or attached to a racing driver’s fire proof suit while it is being worn, the comparison for the purposes of deceptive similarity is of the trade marks as wholes.   

14. Nor do I consider that this is the case of two words ending in sounds which are pronounced in a very similar manner, such as ‘sparka’ and ‘sparker’.  The letter ‘O’, if anything, tends to be emphasized when used at the end of a word and I do not consider that it will simply melt away either visually or orally.  I consider it is likely to form a strong component of the potential purchaser’s recollection and impression of the trade mark. 

15. An additional and important consideration is that the Applicant’s trade mark ends with the letter Q, and in the English language, this is a very unusual way to end a word.  Usually the letter Q at the end of a word is followed by the letters ‘UE’ as, for example in the words ‘plaque’, ‘torque’ or ‘antique’.  SPARQ is thus, from the outset, a memorable word because of its unusual construction.  The impression this word leaves on the potential purchaser of clothing is likely to be quite different from that of the Opponent’s trade mark.

16. Taking these matters into consideration, I am satisfied that the trade marks are not deceptively similar.  I consider that SPARCO and SPARQ are sufficiently different in sound and appearance that there is no “real tangible danger of deception or confusion occurring”[5] in the marketplace. 

    [5] Registrar of Trade Marks v Woolworths (1999) 45 IPR 411

17. The parties did not provide any submissions in respect of substantial identity, and I am satisfied that the two trade marks do not, in any event, meet the tests applicable to that matter. I have found the two trade marks are not deceptively similar, and therefore the Opponent has failed to establish the ground for opposition relevant to section 44.

Section 60 – trade mark similar to one with a reputation in Australia

1. Section 60 provides:

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

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

(a) another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, 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:  For priority date see section 12.

1. The Opponent has claimed that its SPARCO trade mark had a significant reputation in Australia at the relevant date such that the Applicant’s use of its trade mark is likely to cause deception or confusion.  In making this claim, it relied upon the words of Kenny J in McCormick & Co Inc v McCormick (2000) 51 IPR 102:

   [81] What is intended by the word “reputation” in s 60? The word is defined in The Macquarie Dictionary as follows:

   reputation … 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute … 2. favourable repute; good name … 3. A favourable and publicly recognised name or standing for merit, achievement, etc … 4. The estimation or name of being, having done, etc, something specified.

   Compare The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to “the recognition of the McCormick & Co marks by the public generally”.

   [82] Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public's mistakenly attributing a business connection between the two or attributing her product to the company?

   …

   [86] In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product: see, eg, Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer Plc v Effem Foods Pty Ltd (2000) AIPC 91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, among other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd (2001) 51 IPR 1), Moore J accepted at [94] that the Applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 (Nettlefold), in which Heerey J relied upon the public visibility of the Applicant's marks over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of s 28 of the 1955 Act existed.

2. The Opponent stated that the reputation of the SPARCO trade marks in Australia is evidenced by a number of matters including:

   ·continual use of the SPARCO trade marks in Australia since at least 1996 (Sportelli #1 [19]);

   ·total sales of goods under the SPARCO trade marks in Australia which are substantial (Sportelli #1 [12]);  

   ·extent of advertising and promotion of the SPARCO trade marks undertaken in Australia and globally which is significant and is enhanced by the endorsement of the Opponent’s goods which bear the SPARCO trade marks by well-known racing drivers such as Craig Lowndes and Dick Johnson. (Sportelli #1 [21-23]); and

   ·reputation of the SPARCO trade marks, which is increased by the broadcast in Australia of Formula 1 Grand Prix Events during which the SPARCO trade marks are promoted (Sportelli #1[14]).

3. It submitted that confusion between the trade marks would be significantly heightened by the following factors:

   ·     The extent of similarity between the opposed trade mark and the SPARCO trade marks;

   ·     The fact that the goods covered by the opposed trade mark and those on which the SPARCO trade marks are used are the same or similar and are sold to the same consumer and through the same trade channels;

   ·     The fact that both the Opponent and the Applicant are active in the sport field and a brand extension of the SPARCO trade marks to the goods the Applicant sells would seem natural; and

   ·     The potential on items such as clothing and shoes for the different endings of the opposed trade mark and the SPARCO trade marks to be obscured.   

4. The Applicant submitted that while the Opponent had shown significant international sales, the sales in Australia were not substantial.  It argued that if there has been any reputation established, it has been established in respect of highly specialised protective clothing used in motor racing and for which there is a specialised market.  The Applicant also said that the Opponent had not provided any evidence of any actual deception or confusion occurring despite the Applicant’s claims to have promoted and sold its own goods in Australia for a reasonable time.

5. Sportelli 2 was filed and served in reply to the Goodman declaration which had stated that Mr Goodman was not aware of any confusion having occurred between the two trade marks.  Mr Sportelli refers to and provides copies of trade mark decisions which had issued in Columbia, Ecuador and Switzerland,.  He says that in all three decisions it was held that the two trade marks were likely to be confused.   

6. I have not given these decisions any significant weight at all.  They are not evidence of confusion happening within a marketplace.  They are decisions made by officers of the respective intellectual property agencies on the basis of legislation unknown to me, and evidence or other submissions likewise unknown to me. 

7. That aside, the Opponent’s evidence shows that a significant proportion of the goods it attests to having sold within Australia are relatively expensive.  A modified and non-fireproof replica of a racing car driver’s suit is advertised as a ‘special’ at $999.  A ‘package deal’ consisting of a driving suit, race boots and gloves and a kit bag is advertised at $2499.  These are not low prices, and they affect the kind of reputation that may be inferred from the Opponent’s sales.

8. In addition, the evidence provided relates mainly to protective suits for specific purposes and other clothing items for the same, rather narrow and specialist, market.  Given the evidence, I am satisfied that the Opponent has established a reputation for its trade mark within that market.  I am not satisfied that a reputation within this narrow and specialist market creates an expectation within the mind of the general clothing purchaser that the producer will also trade in ordinary clothing.  I am not satisfied that the reputation of the Opponent’s trade mark SPARCO is such that the Applicant’s use of its SPARQ trade mark, with or without the word Nike and its ‘swoosh’ device[6], will result in deception or confusion. The ground of opposition in relation to section 60 is thus not established.

   [6] The Opponent had submitted that all use of the SPARQ trade mark was with the addition of the Nike ‘Swoosh’ device and the word ‘Nike’, and that registration would allow a much broader use pattern, including use without those additions. 

Section 42 – Use contrary to law 

1. Section 42 relevantly provides:

Trade mark scandalous or its use contrary to law

42. An application for the registration of a trade mark must be rejected if:

(a) …
(b) its use would be contrary to law.

1. In arguing this ground the Opponent stated that it was relying on section 52 of the Trade Practices Act 1974 (‘TPA’) which was in force at the time the application for registration was filed. It also stated that the tort of passing off was relevant law for the purposes of section 42(b).

2. The Opponent argued the following:

   To establish passing off, the Opponent must establish the ‘classical trinity’ as stated in Reckitt & Colman Products Ltd v Borden Inc:[7]

   ·     a reputation in the relevant mark;

   ·     misrepresentation (leading to deception); and

   ·     damage to goodwill (or a likelihood thereof). 

   Due to the Opponent’s reputation in the SPARCO Marks in sporting goods and sportswear market in Australia amongst purchasers of sportswear and sporting goods … and the deceptive similarity of the Opposed Mark and the SPARCO marks … use of the opposed mark by the Applicant is likely to mislead and deceive consumers into believing the goods bearing the trade mark originate from the Opponent or have some endorsement, affiliation, or approval from the Opponent.  

   [7] (1990) 17 IPR 1

1. The Opponent then went on to claim that the Applicant’s conduct was taking advantage of the reputation of the SPARCO trade marks, and that it created ‘dilution by blurring’ leading to an erosion of the distinctive character of the SPARCO trade marks and therefore, their attractiveness.  It also considered that the Applicant would profit from the Opponent’s trade mark value in areas outside of its general of interest if it was to be exploited in those fields because of its popularity and renown.  The Opponent also noted that it considers that the Applicant benefits from:

   … its misleading and deceptive conduct as it has misappropriated the SPARCO Marks, taking an attractive and well-known mark and ‘free-riding’ on the investment made by the Opponent in promoting and building up its goodwill in the SPARCO Marks.  The Applicant is likely to gain sales which are disproportionately high in comparison with the size of its promotional investment.

2. Some of the Opponent’s submissions were couched in rather emotional terms, but they all rely on the premise that the trade marks are much more similar in appearance than I consider them to be and that the Opponent has a much stronger reputation in its trade marks within Australia than I have been able to determine. Given that the threshold requirements for reputation of a trade mark which would cause it to meet the provisions of section 52 of the TPA is higher than that required for section 60 of the Act, I do not see how the Opponent’s arguments can stand up to scrutiny. Before finding that paragraph 42(b) of the Act applies, the Registrar needs to be satisfied that the Applicant’s use of its trade mark would be contrary to law.[8]  I am not so satisfied and therefore I find the Opponent has not established this ground of opposition.

   [8] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd (2001) 52 IPR 24

Decision

1. Section 55(1) of the Act provides:

Decision

(1) 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.

1. The Opponent has not established any ground of opposition.  The application may therefore proceed to registration after one month from the date of this decision.  If the Registrar is notified of an appeal before that time, registration shall not occur until such time as the appeal is dismissed or discontinued.  In the event of a decision issuing from the Court, the application will be subject to the Court’s orders.

Costs

1. The Applicant has been successful in this matter.  I award costs against the Opponent according to the Official Scale as set out in Schedule 8 to the Regulations.

Alison Windsor

Hearing Officer

Trade Marks Hearings

18 August 2011