Spirits Product International Intellectual Property B.V. v Diageo Brands B.V

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Spirits Product International Intellectual Property B.V. to registration of trade mark application 957904(33) – SPRI - in the name of Diageo Brands B.V.

Delegate:

Debrett Lyons

Representation:

Opponent: Patrick Flynn, of counsel, instructed by Mallesons Stephen Jaques, Solicitors.

Applicant: Stephen Burley, of counsel, instructed by Freehills, Solicitors.

Decision:

2007 ATMO 64

s. 52 opposition – s. 44: not substantially identical or deceptively similar; s. 42(b): use of the trade mark not contrary to law.

Opponent to pay the applicant’s costs.

Background

Trade mark application number 957904 (‘the application’) was filed in the name of Diageo Brands B.V. (‘the applicant’) on 13 June, 2003. Details of the application are set out below.
Priority Date:            13 June, 2003
Goods:            Alcoholic Beverages ( class 33)
Acceptance Advert:   16 October, 2003
Trade Mark:                SPRI
(‘the trade mark’)
Spirits Product International Intellectual Property B.V. (‘the opponent’) filed a Notice of Opposition to registration of the trade mark on 16 April, 2004. Thereafter, both parties served and filed evidence according to the provisions of the Trade Mark Regulations 1995 (‘the Regulations’).
Both parties requested to be heard and the matter came before me, Debrett Lyons, a delegate of the Registrar of Trade Marks, on 14 May 2007 in Sydney. At the Hearing, the applicant was represented by Stephen Burley of Counsel instructed by Freehills, Solicitors and the opponent by Patrick Flynn, also of Counsel, instructed by Mallesons Stephen Jacques.
Grounds of Opposition
This is an opposition under section 52 of the Trade Marks Act 1995 (‘the Act’).
The Notice of Opposition essentially listed every ground of opposition available to it under Part 5, Division 2 of the Act. At the Hearing, Mr Flynn stated that he pressed only the grounds under sections 42(b) and 44 of the Act. I interpret that statement as meaning that the remaining grounds are abandoned and for the sake of completeness I find that they have not been established.
The Evidence
The opponent’s evidence comprised:
(a) Affidavit of Andrey Valerjevich Skurikhin, sworn 18 January 2005;

(b) Statutory Declaration of Maurice Gonsalves dated 4 February 2005;

(d) Statutory Declaration of Doctor Boris Christa dated 13 December 2006;

(e) Statutory Declaration of Paul Hugh-Jones dated 13 December 2006; and

(f) Statutory Declaration of Sonia Haskins dated 13 December 2006.

The applicant’s evidence comprised:

(g) Statutory Declaration of Randall Ingber dated 15 May 2006;

(h) Statutory Declaration of James Michael Gray dated 15 May 2006;

Statutory Declaration of Ross Daniel Burns dated 9 June 2006; and

(j) Statutory Declaration of Dr Felicity Cox dated 14 June 2006.

Submissions and Reasoning
Section 44

Section 44 states:
Identical etc. trade marks
(1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of goods (applicant's goods) must be rejected if:
(a) the applicant's trade mark is substantially identical with, or deceptively similar to:
(i) a trade mark registered by another person in respect of similar goods or closely related services; or
(ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b) the priority date for the registration of the applicant's trade mark in respect of the applicant's goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.
Note 1: For deceptively similar see section 10.
Note 2: For similar goods see subsection 14(1).
In order to establish an opposition under this ground the opponent has the burden of proving:
- a trade mark, either registered or pending registration, in the name of a person other than the applicant, and in relation to which the applied-for trade mark is either substantially identical or deceptively similar;
- that other trade mark must be in respect of similar goods or closely related services; and,
- the priority date of the other trade mark must be earlier than the priority date of the applied-for trade mark.
The Notice of Opposition listed 9 trade mark registrations owned by the opponent. Seven of those registrations have no conceivable bearing on section 44, no matter how the Act is understood. At the Hearing, Mr Flynn relied only on trade mark registration number 928381 (‘the registration’), details of which are:

Trade Mark Class Goods Priority Date

33

Alcoholic beverages

13 June 2002

The registration pre-dates the priority date of the application. The opponent did not submit that the trade marks are substantially identical, nor could that submission succeed. The only question under section 44(1) is whether the trade marks are deceptively similar.
The expression ‘deceptively similar’ is defined in section 10 of the Act as:
Definition of deceptively similar
10. For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.
The expression, ‘similar goods’ is defined in sub-section 14(1) of the Act as:
Definition of similar goods and similar services
14. (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.
Since the goods are identical I turn to the question of the resemblance of the trade marks themselves. In Registrar of Trade Marks v Woolworths [1999] FCA 1020, at paragraph 50, French J discussed the concept of deceptive similarity in the following terms:
In Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 594-5, which concerned the 1905 Act, Kitto J set out a number of propositions which have frequently been quoted and applied to the 1955 Act. The essential elements of those propositions continue to apply to the issue of deceptive similarity under the 1995 Act. Applied also to service marks and absent the imposition of an onus upon the applicant they may be restated as follows:
(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.
The authoritative statement concerning the comparison of trade marks is found in Australian Woollen Mills Limited v F S Walton and Company Limited [1937] HCA 51; (1937) 58 CLR 641:
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. The effect of 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, then 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. Evidence of actual cases of deception, if forthcoming, is of great weight.
Moreover, in the case of In Re Application by the Pianotist Co Ltd (1906) 1A IPR 379 at 380; 23 RPC 774 at 777), Parker J said:
You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion -- that is to say, not necessarily that one man will be injured and the other will gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods -- then you may refuse the registration, or, rather, you must refuse the registration in that case.
The opponent contended that, visually, the marks were deceptively similar. Taking account of the prominent device element of the registration and the non-identicality of the word elements, I struggle with that submission; however the cases referred to above show that the correct enquiry is whether, taken in the round, the trade marks are likely to create the same impression.
In Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495, it was said at p.501 that:
The question whether the use of a mark is likely to deceive or cause confusion is in the end a question of impression and common sense; it is a “jury question” in which the judge is entitled to give effect to his or her own opinion as to the likelihood of deception or confusion: Murray Goulburn Co-op Ltd v New South Wales Dairy Corp (1990) 24 FCR 370; at 377; 16 IPR 289 at 296.
Unaided by evidence, I would pronounce the trade mark of the application as SPREE and I would pronounce the trade mark of the registration as SPY, although my more natural inclination would be to spell out the letters that make up that mark, S-P-I, notwithstanding the lack of punctuation marks of any kind. That said, both parties offered evidence of how the trade marks would in fact be pronounced.
Before turning to that evidence, the only proper enquiry before me is the question of how an average member of the Australian public would perceive or pronounce the trade marks. That fictitious person is of no special cultural background and the fact that the meaning and pronunciation of words can have an ethnocentric bias is only informative to the extent that it is the average Australian who might know, understand and pronounce the trade marks in a certain way.
The opponent places particular store in the fact that the trade marks are used on vodka or vodka based beverages and that vodka is a preferred drink for many Europeans. Doctor Boris Christa is a retired Professor of Russian at the University of Queensland. He is multi-lingual and has enjoyed an extraordinary life. An expert in Russian studies, he has contributed to a book detailing the history of Russian peoples living in Australia. He states that there are approximately one million people living in Australia who are of East-European or Scandinavian descent. He says those people would more naturally pronounce the trade mark of the registration as SPEE. He says:
In my opinion, Australian consumers of vodka would not resort to spelling out the acronym SPI using the letters in the manner of English. Like many other European languages, English uses the Roman alphabet. English is, however, unique in pronouncing the Roman letter “I” as “EYE”. In most other languages using the Roman script, the letter :I: is pronounced as “EE”.
With respect to Doctor Christa, there is no support for his statement that Australian consumers would not spell out the letters S-P-I when they described the trade mark of the registration. Moreover, at the priority date of the application, the Australian population exceeded 18 million and even allowing for the inestimable number of people who no longer would naturally pronounce words in the same way as their forefathers, still less than 5% of the Australian population were at that time of East-European or Scandinavian descent. In my decision, those people are not determinative of how the average Australian would pronounce the trade mark of the registration.
The additional fallacy in the opponent’s argument is that it is only drinkers of Russian, East-European or Scandinavian descent who purchase these goods. Even if the present enquiries were limited by the application of the trade marks to vodka and vodka based drinks (which under section 44(1), they are not), the applicant’s evidence supports the every day observation that vodka based mixed drinks are marketed to a very different consumer base than those Australians who are strictly of East-European or Scandinavian descent. To my mind, those same consumers are also likely to purchase bottled vodka.
Doctor Felicity Cox is a lecturer in phonetics, phonology and speech at Macquarie University. Her doctoral thesis was entitled, ‘An Acoustic Examination of Vowel Variation in Australian English’. She appears eminently qualified to give evidence as to how the average Australian would pronounce the trade marks. In her opinion, the trade mark of the application could be pronounced as either SPREE or SPRY, although she points to certain factors which might favour SPREE. Her impression of the trade mark of the registration is that it would most likely be treated as an acronym, ES-PEE-EYE, since the letters “are not an English word as they are not structured phonetically according to rules of English syllabic structure”.
There is further evidence from the applicant that the drinks industry in Australia refers, if at all, to the trade mark of the registration as S-P-I.
In my opinion, the remaining evidence does not advance the opponent’s case or assist in the decision that I need to make, however something should be said of the declarations of Maurice Gonsalves and Sonia Haskins, both attorneys with the opponent’s solicitors. Annexed to those declarations are copies of decisions and materials relating to the progress of the trade mark of the application in foreign jurisdictions. The Gonsalves declaration was filed in evidence in support and attaches a decision made by the French Court. The Haskins declaration was purportedly filed in reply, but in fact answers none of the evidence led by the applicant. I would be entitled to disregard it.
That evidence comprises:
vFrance - decision of the Appeal Court of Paris preventing registration of the SPRI mark;
vBenelux - cancellation relating to the SPRI mark;
vDenmark - withdrawal of registration of the SPRI mark;
vUnited Kingdom - application for SPRI mark withdrawn;
vSweden - registration of SPRI mark revoked; and
vSpain - appeal against the registration of the SPRI mark allowed.
That evidence must be viewed with serious caution. It suffers from at least the following limitations. First, there are instances where the applicant in these proceedings has simply withdrawn its application and we know nothing more of the circumstances. I give that evidence no weight whatsoever. Secondly, the decisions are from non-English language jurisdictions where, to take Doctor Christa’s point, the trade mark of the registration would be pronounced as SPEE. Thirdly, the trade marks have a literal meaning or other nuance in some of those jurisdictions. Finally, the trade mark law of each of those countries or economic regions has been modified in consequence of the European Harmonisation Directive on Trade Marks[1] in a way which liberalises the test of confusingly similarity beyond the limits of the law in this country[2]. There are also procedural uncertainties, for example, on whom the burden of proof fell, which render the foreign decisions unhelpful. I do not find that those decisions assist me.
[1] First Directive 89/104/EEC of the Council, of 21 December 1988, to Approximate the Laws of the Member States Relating to Trade Marks
[2] Article 4 - Further grounds for refusal or invalidity concerning conflicts with earlier rights
1.A trade mark shall not be registered or, if registered, shall be liable to be declared invalid:
a.if it is identical with an earlier trade mark, and the goods or services for which the trade mark is applied for or is registered are identical with the goods or services for which the earlier trade mark is protected;
b.if because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.
c.
In Blount Inc v Registrar of Trade Marks 40 IPR 498 at 504, Branson J observed:
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 (Rejfeck v McElroy (1965) 112 CLR 517 at 521). 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.
In its written submissions, the opponent states that “the evidence shows that there is no single way in which the Opponent’s Registered Trade Marks [sic.] and the Opposed Trade Marks [sic.] are or will be pronounced by native speakers of Australian English.”
That statement is not a completely accurate summation of the evidence. The evidence is clear that the average Australian consumer would be more likely than not to pronounce the trade mark of the application as SPREE. The evidence of Doctor Cox is that the most likely appreciation of the trade mark of the registration is as an acronym, spelt out S-P-I. Whilst Doctor Christa contradicts that interpretation, he does so merely as a bald statement and without the authority of himself being an expert in Australian English. There is also trade evidence that the trade mark of the registration is referred to as S-P-I.

Coupled with this quite different aural appreciation of the trade marks as shown by the evidence is the unmistakable device element of the registration which is of arbitrary and so distinctive character when used in connection with class 33 goods.
There is abundant evidence that both parties are using their trade marks, however there was no evidence of actual confusion. In February 2004, the applicant commenced selling and distributing in Australia an alcoholic drink bearing the trade mark of the application and has continued to do so. The trade channels through which the parties’ drinks are sold are identical (pubs, nightclubs and liquor stores) and if there was a likelihood of confusion, there should be ample evidence of it.
Taking all these factors into account, I am of the opinion that the question of whether the trade marks are deceptively similar is one which is, putting the opponent’s position at best, very much ‘on balance’. Directed by the Blount case, supra, if the issue of whether trade marks are deceptively similar or not is at best evenly balanced, then I should find that the trade marks are not deceptively similar.
Accordingly, I find that the ground of opposition based on section 44 of the Act is not established.
Section 42
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.
Section 42(b) requires the opponent to prove that use of the trade mark would to contrary to a specific law (Advantage Rent-A-Car Inc v Advantage Rental Pty Ltd (2001) 52 IPR 24). In this case Mr Flynn’s claim is that use of the trade mark would contravene section 52 of the Trade Practices Act1974. Section 52(1) of the Trade Practices Act 1974 is entitled “misleading or deceptive conduct” and provides that “A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.
Proof of actual deception is not required. Instead, conduct will be likely to mislead or deceive if there is a “real or not remote chance or possibility” of that result (S&I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd (1999) 43 IPR 581 at 588). Moreover, in determining whether conduct is likely to mislead or deceive, I am required to identify the relevant section of the public by reference to whom the effect of the applicant’s conduct is to be assessed (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd). I have already said something of that: they are the purchasers of alcoholic beverages at pubs, clubs and liquor stores.
To succeed, the opponent would need to show the requisite likelihood of confusion as a result of its reputation in Australia of the trade mark of the registration. The affidavit of Andrey Valerjevich Skurikhin shows that the trade mark appears on the label and the top of the cap of 700ml and 1 litre bottles of Stolichnaya Vodka.
The label is depicted on the following page.
The words STOLICHNAYA and RUSSIAN VODKA in the label are clear. Less clear are the words PRODUCT OF S.P.I. GROUP and in the top, left hand corner of the label, the trade mark of the registration.
Mr Hugh-Jones, a Marketing Director of the opponent’s solicitors and formerly involved in the Australian liquor trade, gives evidence that “regular consumers of Stolichnaya vodka will be very familiar with the cap of the bottle, in part because the consumer handles the cap each time a drink is poured”.
Leaving to one side the question of whether or not the opponent’s use of the trade mark constitutes actual trade mark use (rather than being some other indicia: see Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH 54 IPR 344 at 366), I am asked to draw the finding that the use shown has given the trade mark the level of consumer recognition, independent from the STOLICHNAYA name, such that the applicant’s use of SPRI would cause a real and not remote chance of confusion or deception. I have great difficulty with that proposition and I cannot accept any such argument.
I decide that the section 42(b) ground of opposition is not established.
Decision
Under section 55 of the Act, I decide that the opposition is not established and so I direct that the application be registered one month from the date of this decision, provided that the sealing fee has been paid. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been discontinued, or in the event of a decision from the Court, that the application be subject to its orders.
Costs
Both parties requested their costs in the matter. The opposition having not been established, I order that the opponent pay the applicant’s costs according to the official scale.
Debrett Lyons
Hearing Officer
Trade Marks Hearings
15 October 2007

[2007] ATMO 64

15 October 2007

Key Legal Topics

Areas of Law

Intellectual Property

Statutory Interpretation

Legal Concepts

Appeal

Costs

Statutory Construction

Trade Mark	Class	Goods	Priority Date
33	Alcoholic beverages	13 June 2002