Spirits International B.V v SC Prodal '94 SRL

[2008] ATMO 22

TRADE MARKS ACT 1995

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

Re:Opposition by Spirits International N.V. to protection of international registration designating Australia 984066(33) — STALINSKAYA (International Registration 692450) — in the name of SC PRODAL '94 SRL.

Delegate:	Rachel Dunn
Representation:	Opponent: Mr Michael Hall of Counsel instructed by Mallesons Stephen Jaques Holder: Mr Ben Fitzpatrick of Counsel instructed by Griffith Hack
Decision:	2008 ATMO 22 Regulation 17A.29 opposition: Grounds under sections 43, 44 and 60 not established, other grounds not pressed. Opposition dismissed. Costs awarded against the opponent.

Background

1. SC PRODAL ’94 SRL (the holder) filed an International Registration Designating Australia (IRDA) on 10 October 2003 (the priority date). Following examination, the IRDA was accepted for the extension of protection to Australia. The relevant details of the IRDA are:

Trade Mark No: (International Registration No)	984066 (692450)
Trade Mark:	STALINSKAYA
Holder:	SC PRODAL '94 SRL
Priority Date:	10 October 2003
Class 33:	Industrial and natural alcoholic beverages, beverages made with wine in general
Endorsements:	The holder has advised that the characters appearing in the trade mark may be transliterated as which may be translated into English as STALINSKAYA.* [sic]

1. Following advertisement of acceptance, protection of the holder’s trade mark was opposed by Spirits International N.V. (the opponent). A Notice of Opposition was filed on 25 August 2004, citing most grounds of opposition under the Trade Marks Act 1995 (the Trade Marks Act) applicable to an IRDA by virtue of Regulation 17A.31 of the Trade Marks Regulations 1995 (the Trade Marks Regulations). Both the opponent and the holder filed evidence in relation to the opposition. The evidence filed consists of the following Statutory Declarations:

   Evidence-in-Support

   ·Maurice Charles Gonsalves with Exhibit MCG-1 made 24 February 2005 (the Gonsalves declaration); and

   • Stanislav Brasiler with Exhibits SB-1 to SB-4 made 06 April 2005 (the first Brasiler declaration).

   Evidence-in-Answer

   ·Lyn Stevens with Annexures A and B made 18 October 2005 (the Stevens declaration);

   ·Marin Ioana-Claudia with Annexures A to H made 10 November 2005 (the first Ioana-Claudia declaration);

   ·Thomas Ermer made 15 December 2005 (the Ermer declaration); and

   ·Marin Ioana-Claudia with Annexure 1 made 09 December 2005 (the second Ioana-Claudia declaration).

   Evidence-in-Reply

   ·Stanislav Brasiler with Exhibits SB-1 to SB-5 made 18 April 2006 (the second Brasiler declaration).

2. At the hearing only the grounds of opposition under sections 43, 44 and 60 of the Trade Marks Act were pursued. I regard the other grounds of opposition as having been abandoned by the opponent. The matter came to be heard by me as a delegate of the Registrar of Trade Marks. The hearing was held in Canberra by video-conference on 5 December 2007. At the hearing I heard representations from Michael Hall and Ben Fitzpatrick on behalf of the opponent and the holder respectively.

   Reasons

   Section 43

3. Section 43 of the Trade Marks Act provides:

   43       Trade mark likely to deceive or cause confusion

   An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.

4. The opponent argued two bases upon which the section 43 ground of opposition could be established. First, that section 43 could be made out if the holder’s trade mark connoted the opponent’s STOLICHNAYA trade mark. This argument is based on an interpretation of section 43 which has been rejected by the Federal Court.[1] The section 43 ground of opposition cannot be made out upon this basis.

   [1] T.G.I. Friday's Australia Pty Ltd v TGI Fridays Inc (2000) 100 FCR 358, 365 (Wilcox, Kiefel and Emmett JJ); Winton Shire Council v Lomas (2002) 119 FCR 416, 421 (Spender J); Pfizer Products v Karam (2006) 237 ALR 787, 801 (Gyles J).

5. The second, and less controversial, basis of the section 43 ground of opposition focused upon a connotation of ‘Russianness’. The opponent argued that:

   Øthe trade mark itself was chosen for its ‘Russianness’ and was generally suggestive of Russia; or alternatively

   Øthe trade mark, by its use of the prefix STALIN, suggested an association with the former Soviet leader Joseph Stalin, and thus a connection with Russia.

6. The evidence establishes that STALINSKAYA vodka is produced in Romania (first Ioana-Claudia declaration, Annexure B). The opponent contended that, as a result of these connotations, use of the trade mark on Romanian vodka would falsely suggest that the goods were manufactured in Russia. As such, use of the trade mark would be likely to deceive or cause confusion as to the origin of the goods. Mr Hall acknowledged that the existence of the second of the above connotations — an association with Stalin — is somewhat inconsistent with the opponent’s submissions regarding deceptive similarity under sections 44 and 60 of the Trade Marks Act. To my mind, nothing turns on this inconsistency.

7. The holder noted that there was no evidence of such a connotation of Russian origin. Mr Fitzpatrick suggested any connotation derived from use of STALIN need not specifically connote Russia, but may extend to the former USSR or even to Eastern Europe generally. It was submitted that either way the onus of establishing this ground of opposition fell upon the opponent, and no evidence had been submitted which could satisfy this onus.

8. Determining whether the section 43 ground of opposition has been made out requires a two-stage analysis. The opponent must demonstrate that:

   (1)     there is a connotation in the proposed trade mark or in a part of it; and

   (2)     because of this connotation, the use of the proposed mark would be likely to deceive or cause confusion.[2]

   [2] McCorquodale v Masterson (2004) 63 IPR 582 (McCorqudale), 589 (Kenny J).

9. To the extent that the connotations advanced by the opponent amount to a positive representation that ‘this product is of Russian origin’, this argument must be rejected. Any connotation contained in the trade mark is simply not strong enough to support such an affirmative and specific statement of origin.

10. However, I am prepared to accept, for the sake of argument, that the holder’s trade mark contains a connotation of ‘Russianness’. I will proceed assuming that the trade mark connotes Russianness in the sense that it evokes images of Russia. This is more a vague association with Russia than it is a positive statement as to origin.

11. The question relevant to the second limb of the test outlined above is whether, because of this connotation of Russianness, consumers might believe the product is of Russian origin. If this is answered affirmatively, the use of STALINSKAYA upon Romanian vodka would result in deception or confusion regarding the origin of the product, establishing the ground of opposition under section 43.

12. It must be determined whether there is a ‘real tangible danger’ of deception or confusion arising.[3] As stated by Kenny J in McCorquodale:

    In order for s 43 to apply, the court must be satisfied that there is a reasonable likelihood of deception or confusion arising because of the connotation within the mark, having regard to the nature of the goods or services to which it is to apply and other relevant considerations.[4]

    [3] Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365, 380, 382 (French J); McCorquodale v Masterson (2004) 63 IPR 582, 594 (Kenny J).

    [4] McCorquodale v Masterson (2004) 63 IPR 582, 589 (Kenny J).

13. The nature of the goods to which the trade mark applies is an important consideration in determining whether a likelihood of deception or confusion exists. The holder’s trade mark is not solely for vodka, but for a broader range of goods in class 33 — namely ‘[i]ndustrial and natural alcoholic beverages, beverages made with wine in general’. With respect to the majority of goods which fall within this specification, I do not believe there is any danger of deception or confusion arising from the use of STALINSKAYA. STALINSKAYA may connote ideas of Russianness, yet a consumer encountering that trade mark on a bottle of whisky is unlikely to conclude that the whisky originated in Russia.

14. The case with respect to vodka requires further consideration. Hearing Officer Thompson noted in Spirits International BV v Diageo Aust. Ltd that ‘[v]odka is closely associated with Russia, to the extent that it is popularly regarded by Australians as the Russian national spirituous drink.’[5] The case for deception or confusion arising as to the origin of the STALINSKAYA product is thus stronger when it concerns use of the trade mark upon vodka.

    [5] Spirits International BV v Diageo Aust. Ltd [2006] ATMO 7, [21] (Hearing Officer Thompson).

15. The case for deception or confusion arising from the use of STALINSKAYA runs somewhat parallel to the use of GLENN OAKS upon whisky. In The Scotch Whisky Association v De Witt  Hearing Officer O’Brien noted that:

    If “GLENN OAKS” were to be used on a bottle of Scotch style whisky, I am satisfied that, in addition to its primary signification as a place name, it will also create the impression that the whisky is Scotch whisky.[6]

    [6] The Scotch Whisky Association v De Witt (2006) 69 IPR 637, 643 (Hearing Officer O’Brien).

16. A critical element to Hearing Officer O’Brien’s decision concerning the connotation carried by GLENN OAKS was the frequency with which the prefix “GLEN” was used by producers of Scotch whisky.  This was made explicit at 643 where it was stated:

    I have already noted Scotland’s reputation for producing whisky. I consider that reputation, together with the large Australian market for Scotch whisky, the fact that the names of many Scottish distilleries commence with “GLEN”… may give rise to an impression that a whisky name starting with “GLEN” means the whisky is a Scotch whisky.[7]

    [7] The Scotch Whisky Association v De Witt (2006) 69 IPR 637, 643 (Hearing Officer O’Brien).

17. The situation with respect to vodka is somewhat different. Traders frequently commercialise vodka trade marks which connote ideas of Russianness, although the product itself may not necessarily be of Russian origin. For example, I understand Rasputin vodka to be of German origin; Boris Yeltsin vodka to originate in France; and Bolskaya vodka to originate in the Netherlands. A multitude of vodkas originate in Eastern Europe, and are sold using trade marks of Slavic appearance which may similarly connote Russianness. Two examples which come to mind are Kievskaya vodka, which originates in the Ukraine, and Pravda vodka, of Polish origin. These trade marks provide examples of the more general proposition: it is not uncommon for traders to use trade marks which connote ideas of Russianness upon vodka, even where the particular product is not of Russian origin.

18. The use of trade marks which connote ideas of Russianness in the Australian vodka market cuts against the likelihood of deception or confusion arising. The nature of the market in which the goods are sold is an important consideration in determining whether there is a likelihood of deception or confusion arising as a result of a connotation contained in a trade mark.[8]

    [8] Effem Foods Pty Ltd v Star-Kist Foods Inc (2000) 50 IPR 121, 129 (Hearing Officer Williams).

19. With respect to a trade mark which contains an analogous connotation, Hearing Officer Thompson noted:

    It is natural that many traders will use the word RUSSKAYA, or variants of that word, either to indicate that the goods are Russian, or to evoke images or ideas associated with Russia.[9]

    Though this comment was made in the context of alternate grounds of opposition under the Trade Marks Act, it reflects the nature of the vodka market in Australia.

    [9] Spirits International BV v Diageo Aust. Ltd [2006] ATMO 7, [21] (Hearing Officer Thompson).

20. I find that the use of a trade mark which connotes ideas of Russianness, as STALINSKAYA may, would not result in a real tangible danger that consumers would be deceived or confused as to the origin of the product. I do not believe the ordinary consumer would assume that a vodka product containing such a connotation of Russianness was necessarily of Russian origin. Indeed, in the circumstances of the Australian market outlined, I think it is unlikely that even a reasonable doubt, or significant risk of confusion, would arise.

21. In reaching this conclusion I am particularly mindful of the following passage of French J’s judgment in the Woolworths case:

    The policy of the 1995 Act can be said to some extent to have shifted the balance of the objectives of trade mark law more towards the identification and protection of commercial products and services than the protection of consumers, although the latter remains an objective. In respect of deceptive trade marks the interests of consumers are also protected by comprehensive Federal and State laws relating to conduct which is misleading or deceptive or likely to mislead or deceive.[10]

    [10] Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365, 381 (French J).

22. Though that statement was made in the context of deceptive similarity under section 44 of the Trade Marks Act, its underlying message is applicable to other grounds of opposition. Accepting, as I have, that STALINSKAYA contains a connotation of Russianness, I do not believe this connotation would be likely to deceive or cause confusion. I find that the section 43 ground of opposition is not made out.

    Section 44

23. Section 44(1) of the Trade Marks Act relevantly provides:

    44       Identical etc. trade marks

    (1)Subject to subsections (3) and (4), and 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)  …; 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.

24. By virtue of Regulations 17A.28(2) and 17A.31(1) section 44 applies to an IRDA in the same manner it applies to a domestic application. The opponent drew my attention to two trade marks which form the basis of the section 44 ground of opposition. The relevant details of these trade marks are:

Trade Mark No.	Trade Mark	Date of Registration	Goods
590305	STOLICHNAYA	12 November 1992	Alcoholic beverages including vodka (Class 33)
298660	STOLICHNAYA VODKA and label	16 July 1976	Russian vodka (Class 33)

1. The opponent drew particular attention to trade mark 590305. I will first discuss the ground of opposition in relation to this trade mark, and then apply the relevant principles to trade mark 298660.

2. Trade mark 590305 was registered before the priority date of the holder’s trade mark, and is registered in respect of similar goods to the holder’s trade mark. At the hearing, Mr Fitzpatrick drew my attention to a dispute concerning the ownership of the ‘Stolichnaya’ trade marks currently before the Federal Court. Section 44(1) does not require a cited trade mark to be owned by the opponent, it need only be registered by ‘another person’. The question of ownership has no further bearing on the section 44 ground of opposition.

3. The opponent did not argue that the holder’s trade mark was substantially identical to trade mark 590305. The question which determines this ground of opposition is whether the applicant’s STALINSKAYA trade mark is deceptively similar to the opponent’s STOLICHNAYA trade mark.

   Deceptive Similarity:

4. Determining whether STALINSKAYA is deceptively similar to STOLICHNAYA is, in the end, an assessment of ‘whether in fact there is such a reasonable probability of deception or confusion that the use of the new mark and title should be restrained.’[11] In determining this question, the trade marks:

   [11] Australian Woollen Mills Ltd v F. S. Walton and Company Ltd (1937) 58 CLR 641, 658 (Dixon and McTiernan JJ).

   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 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. The effect of the spoken description must be considered. If a mark is in fact or from its nature likely to be the source of some name or verbal description by which buyers will express their desire to have the goods, their similarities both of sound and of meaning may play an important part. 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. The course of business and the way in which the particular class of goods are sold gives, it may be said, the setting, and the habits and observation of men considered in the mass affords the standard.[12]

   [12] Australian Woollen Mills Ltd v F. S. Walton and Company Ltd (1937) 58 CLR 641, 658 (Dixon and McTiernan JJ); CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42, 61 (Ryan, Branson and Lehane JJ).

   This test was restated by French J to accommodate the presumption of registrability introduced by section 33(1) of the Trade Marks Act:

   (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.[13]

   [13] Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365, 382–383 (French J).

5. Both parties made detailed submissions upon the issue of deceptive similarity. Mr Hall drew my attention to the circumstances in which the relevant goods would be sold. It was submitted that the goods would generally be sold either in retail outlets, or over the bar, to customers over 18 years of age. Based on the circumstances of sale, it was argued that the prospect of deception or confusion may arise based on both the aural and visual impression of the competing trade marks.

1. I accept much of Mr Hall’s submissions concerning the circumstances of sale. As a general rule, the purchase of alcoholic beverages will involve ‘both aural and visual cues.’[14] I also adopt much of what Sundberg J noted in Scotch Whisky Association v De Witt concerning the circumstances of sale relevant to spirits: purchasers are generally over 18; able to seek assistance from a salesperson (or a bartender); and are not particularly impulsive purchasers.[15]

   [14] De Bortoli Wines Pty Ltd v Brown (2002) 58 IPR 548, 562 (Hearing Officer Purvis-Smith).

   [15] Scotch Whisky Association v De Witt [2007] FCA 1649, [38]–[39] (Sundberg J)

2. Mr Hall noted a variety of elements shared by both trade marks. While emphasising that it is important to assess the overall effect of the trade marks, he argued that the similarities identified created an overall impression of visual (and aural) similarity so as to make confusion likely.

3. Mr Hall was further submitted that the trade marks shared the same idea — a general impression of ‘Russianness’. He argued that, as far as the ordinary consumer would know, both marks were invented words. I accept this last proposition — the ordinary consumer cannot be presumed to speak Russian. I also accept that each trade mark would not convey a specific meaning to the ordinary consumer, only a general impression of Russianness.

4. Finally, Mr Hall drew my attention to three recent decisions in the United Kingdom. In each case the relevant decision-maker determined that STALINSKAYA was deceptively similar to STOLICHNAYA. With particular respect to the appeal judgment of Laddie J, I note that appeals from the Trade Mark Registry are not a rehearing in the United Kingdom, and, in that jurisdiction ‘particular respect must be given to the conclusions arrived at by the first instance tribunal.’[16] While the content of United Kingdom decisions may, in certain cases, inform an Australian decision, they do not carry decisive weight regarding the assessment of deceptive similarity under the Trade Marks Act.

   [16] SC Prodal 94 SRL v Spirits International BV [2003] EWHC 2756 (Ch), [6] (Laddie J).

5. Concerning the issue of deceptive similarity, the UK Hearings Officer observed:

   given that the word STALINSKAYA is the dominant, distinctive element of the holder’s mark and that the differing letters are in the middle of the respective words, where there [sic] visual impact is relatively less apparent than it is at the beginning and termination of the words, and after bearing in mind the potential for imperfect recollection, it seems to me that the respective marks as a whole possess obvious visual similarity and there is considerable scope for visual confusion, notwithstanding that the STALIN element of the word STALINSKAYA may remind some customers of the deceased Russian dictator.[17]

   [17]SC Prodal 94 SRL v Spirits International BV Decision O/117/03, [35] (Hearing Officer MacGillivray).

6. Mr Fitzpatrick argued that the trade marks were not deceptively similar. Unlike the United Kingdom Hearing Officer, he placed considerable emphasis upon the first portion of each trade mark — STALIN and STOLICH respectively — as a point of distinction. It was argued that use of STALIN would draw consumer’s attention to the famous Soviet leader and serve to distinguish the trade marks. He also noted that while the trade marks shared a common suffix, this was a common ending for words related to vodka.

7. Mr Fitzpatrick also noted that the two trade marks have co-existed in a variety of different (largely non-English speaking) jurisdictions (first Ioana-Claudia declaration, paragraph 9). I am mindful that there is no evidence of any actual confusion arising anywhere in the world.

   Trade mark 590305 — Visual deception:

8. The first issue which requires determination is whether the holder’s trade mark is visually deceptively similar to the opponent’s STOLICHNAYA trade mark. There is a degree of visual similarity between the marks — particularly as regards the STAL/STOL prefixes, and the KAYA/NAYA suffixes. The middle portions of each trade mark — ICH and INS — are quite different. It has long been a principle in determining whether deceptive similarity exists that:

   [o]ne must bear in mind the points of resemblance and the points of dissimilarity, attaching fair weight and importance to all, but remembering that the ultimate solution is to be arrived at, not by adding up and comparing the results of such matters, but by judging the general effect of the respective wholes.[18]

   [18] Clark v Sharp [1898]15 RPC 141, 146 (Byrne J); Melbourne Chinese Press Pty Ltd v Australian Chinese Newspapers Pty Ltd (2004) 63 IPR 38, 42 (Wilcox, Kiefel and Bennett JJ).

9. In assessing the general effect of the trade marks, particular reference must be made to the STALIN element of the holder’s trade mark. I note that in the United Kingdom, Laddie J stated with regard to the effect of this element:

   it seems to me that he [the hearing officer] was perfectly entitled to look at the two and to come to the conclusion that for many people the existence of the letters S-T-A-L-I-N at the beginning of the appellant’s mark would not jump out … and immediately give rise to a reference to the former leader of the Soviet Union. For what it is worth, I think it is only fair to point out that when I first saw this case and before I had read either the decision or the skeleton arguments, the fact that the appellant’s mark started with the name STALIN was something which I did not notice.[19]

   [19] SC Prodal 94 SRL v Spirits International BV [2003] EWHC 2756 (Ch), [13] (Laddie J).

10. In assessing the issue of deceptive similarity I am ‘to estimate the effect or impression produced on the mind of potential customers’. My estimation differs from that of the United Kingdom decision makers. I believe the STALIN element is an apparent and significant element of the holder’s trade mark. I believe consumers would notice the STALIN element and draw a connection to the former Soviet leader. This provides a point of distinction to the opponent’s STOLICHNAYA trade mark, which contains no precise idea to the ordinary customer other than perhaps a passing observation that the word is of Russian origin.

11. The opponent drew attention to the idea of Russianness shared by both trade marks. This proposition stretches the principle in Jafferjee v Scarlett[20] — that trade marks sharing a common idea may be deceptively similar — well beyond its legitimate basis. The similar ideas of ‘Russianness’ suggested by each trade mark in this case fits more consistently with the principle established in Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd. In that case the High Court stated, with regard to the commonality of idea between ‘Rainmaster’ and ‘Rain King’:

    it is obvious that trade marks, especially word marks, could be quite unlike and yet convey the same idea of the superiority or some particular suitability of an article for the work it was intended to do. To refuse an application for registration on this ground would be to give the proprietor of a registered trademark a complete monopoly of all words conveying the same idea as his trademark. The fact that two marks convey the same idea is not sufficient in itself to create a deceptive resemblance between them, although this fact could be taken into account in deciding whether two marks which really looked alike or sounded alike were likely to deceive.[21]

    [20] Jafferjee v Scarlett (1937) 57 CLR 115, 121–122 (Latham CJ).

    [21] Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536, 539 (The Court); Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326, 340 (Bennett J).

12. To refuse to register STALINSKAYA because it shared a broad idea of Russianness with STOLICHNAYA would, without more, give the opponent an overly broad monopoly. I have noted the commonality with which ideas of Russianness are used in the Australian vodka market. Registration of STOLICHNAYA does not carry with it a monopoly over ideas of Russianness in relation to alcoholic beverages.

13. The idea of each trade mark is an important consideration in this case. It is at least in part from the STALIN element — which brings to mind the idea of the former Soviet leader — that the holder’s trade mark carries an idea of Russianness. The idea of the holder’s trade mark is broadly one of Russianness. But, more acutely, it is an idea of Russianness associated with Joseph Stalin. In this more acute sense, the trade marks ‘bring quite different things to mind’.[22] It is established that ‘the suggestion of differing ideas may serve to reduce the risk of confusion’,[23] and on the present facts, the ‘idea’ of the holder’s trade mark serves to significantly reduce the likelihood of deception or confusion arising.

    [22] Monster Cable Products, Inc v Konami Corporation, [33] (Hearing Officer Thompson).

    [23] Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326, 340 (Bennett J); Melbourne Chinese Press Pty Ltd v Australian Chinese Newspapers Pty Ltd (2004) 63 IPR 38, 42 (Wilcox, Kiefel and Bennett JJ); Johnson & Johnson v Kalnin (1993) 26 IPR 435, 440 (Gummow J); Shanahan’s Australian Law of Trade Marks & Passing Off, 3^rd ed, p.200

14. There is an additional degree of similarity between STALINSKAYA and STOLICHNAYA. Yet though the trade marks do share some visual similarities — particularly as regards the beginning and termination of each trade mark — they remain distinguishable even where customers imperfectly recall one or other trade mark. On the balance of probabilities, I am not convinced there is a ‘real tangible danger’ of deception or confusion arising. I therefore find that the holder’s STALINSKAYA trade mark is not visually deceptively similar to registered trade mark 590305.

    Trade mark 298660 — Visual deception:

15. The next issue which falls for consideration is whether the holder’s trade mark is visually deceptively similar to the opponent’s other registered trade mark. I note that the visual differences between the applicant’s trade mark and registered trade mark 298660 are somewhat exaggerated than with respect to trade mark 590305. Nonetheless, the essential feature of this trade mark is the word STOLICHNAYA.  Applying the same considerations discussed above, I find that the holder’s trade mark is not visually deceptively similar to registered trade mark 298660.

    Trade marks 590305 and 298660 — Aural deception:

16. Regarding aural deception, Mr Hall drew attention to ‘over the counter’ sales in a bar, suggesting background noise, poor lighting and an increased tendency to slur increased the likelihood of aural deception or confusion arising in a bar environment. I believe this exaggerates the danger of confusion arising. In my experience customers in bars tend to order spirits by reference to the goods themselves — e.g. ‘vodka and orange’, rather than a particular brand of spirit. Where this is not the case, the customer tends to be better informed as regards the product they order. Additionally, the mandatory assistance of a bartender mitigates any increased danger of deception or confusion. The circumstances of ‘over the counter’ sales do not create a greater danger of aural deception or confusion than the danger which may arise visually when the products are sold in a bottle shop.

17. With respect to the danger of deception or confusion arising from the aural features of each trade mark, I note that each of the opponent’s registered trade marks are, in essence, the same for the purposes of this examination. Both would generally be referred to by the word ‘STOLICHNAYA’, or perhaps the abbreviation ‘STOLI’.

18. The natural pronunciation of each trade mark — something akin to STA-LIN-SKY-YA and STOL-ITCH-NY-YA — does not, of itself, suggest there is a real tangible danger of deception or confusion arising. There is some similarity between the first syllables of each trade mark, and there is considerable authority suggesting the ‘first syllable of a word is, as a rule, far the most important for the purpose of distinction’.[24] However, the trade marks must still be assessed in their entirety,[25] and there exist significant differences in the natural pronunciation of the words — most significantly in the second syllable (LIN and ITCH).

    [24] Re London Lubricants (1920) Ltd’s Application (1925) RPC 264, 279 (Sargant LJ); Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505, 511 (Burchett J).

    [25] Anheuser-Busch Inc v Budejovický Budvar (2002) 56 IPR 182, 218 (Allsop J).

19. I am mindful that there are alternate ways in which each trade mark may be pronounced. The first two syllables of the applicant’s trade mark may be pronounced in a manner more akin to STAL-IN; the middle syllable of the opponent’s trade mark may be pronounced ICK; and the termination of each trade mark may be pronounced so as to rhyme with ‘player’. Of these alternatives, only the last truly suggests a greater danger of deception or confusion than the pronunciations considered above. In all cases the natural pronunciation of the applicant’s trade mark places emphasis on the STALIN element, being the first two syllables of the trade mark regardless of pronunciation. This again draws the attention of the consumer to the differing ‘ideas’ of each trade mark, serving to reduce the risk of confusion.

20. Considering the alternative pronunciation of each trade mark in its entirety, and noting the emphasis which falls upon the first syllable of each, I am not satisfied that the trade marks are aurally similar to the extent that there is a ‘real tangible danger’ of deception or confusion arising. Accordingly, I find that the holder’s trade mark is not deceptively similar to either trade mark cited by the opponent. The ground of opposition under section 44(1) of the Trade Marks Act is not made out.

    Section 60

21. Section 60 of the Trade Marks Act provides:

    60Trade 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.

22. This ground of opposition requires the holder’s trade mark to be deceptively similar to a trade mark which has acquired a reputation in Australia. I have no doubt that the STOLICHNAYA trade mark has acquired a sufficient reputation (Gonsalves declaration, Exhibit MCG-1; first Brasiler declaration, paragraphs 25–35). However, at the time of relevant to these proceedings, it remained a threshold requirement that the trade marks in question be deceptively similar.[26]

    [26] Apple Computer v TodayTech Group Pty Ltd [ 2007] ATMO 40, [61]-[62] (Hearing Officer Lyons).

23. Mr Fitzpatrick noted that, based upon current proceedings before the Federal Court, it was far from certain that the opponent was the owner of the STOLICHNAYA trade mark for the purposes of section 60. However, as is the case with respect to section 44, there is no requirement that a trade mark upon which a section 60 opposition is based be owned by the opponent.

24. At the hearing, Mr Hall drew upon several differences between section 60 and section 44 and argued that it was open establish this ground of opposition where the section 44 ground has not been made out. In response, Mr Fitzpatrick submitted that the determination of deceptive similarity under the section 60 ground of opposition must result in the same conclusion as reached in the section 44 analysis.

25. Section 60 relates to the opponent’s use of its trade marks at common law. There may be differences between a common law trade mark which has acquired a reputation in Australia, and the trade mark registered by the opponent. It may, in some circumstances, be necessary to reconsider the issue of deceptive similarity for the purposes of section 60 to accommodate the use of a trade mark at common law.

26. Drawing my attention to several advertisements (first Brasiler declaration, Exhibit SB-4) Mr Hall argued there was a case for deceptive similarity under section 60. The advertisements in question emphasise either the STOLI or STOLICH elements of STOLICHNAYA. In this case, I do not believe there is any increased likelihood of deception or confusion arising. For confusion or deception to arise based on this kind of use, consumer’s would need to both disregard the ‘SKAYA’ element of the applicant’s trade mark, and overlook the idea contained within the STALIN element. I do not believe there is a real tangible danger of this occurring.

27. I find that the applicant’s trade mark is not deceptively similar to any common law trade mark. The ground of opposition under section 60 of the Trade Marks Act has not been made out.

    Decision

28. Regulation 17A.34 of the Trade Marks Regulations provides:

    17A.34     Decision on opposition

    Unless the opposition proceedings are discontinued or dismissed, the Registrar must decide:

    (a)to refuse protection in respect of all of the goods or services listed in the IRDA; or

    (b)to extend protection in respect of some or all of the goods or services listed in the IRDA (with or without conditions or limitations);

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

    Note:For limitations see section 6.

29. No ground of opposition has been established to any extent with respect to IRDA 984066.

30. I direct that protection of the trade mark STALINSKAYA be extended to Australia in respect of all of the goods claimed, one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that protection shall not occur until the appeal has been decided or discontinued. If the Registrar has not been so served with a notice of appeal the International Bureau will be notified of this decision as soon as practicable after the appeal period has ended, in accord with Regulation 17A.34(2).

    Costs

31. Both parties sought their costs in relation to this opposition. The holder, having been successful in these proceedings, is entitled to its costs, which I award against the opponent, in accordance with the official scale.

    Rachel Dunn
    Hearing Officer
    Trade Marks Hearings
    26 March 2008