Sports Technology Limited v Insight Health Pty Limited

[2002] ATMO 14

TRADE MARKS ACT 1995

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

Re:Opposition by Sports Technology Limited to registration of trade mark application 804370(30) - VITAZONE - filed in the name of Insight Health Pty Limited.

Background

Insight Health Pty Limited, the applicant, filed application 804370 in class 30 of the International Classification of Goods and Services (the Nice Classification) on 20 August 1999. The goods claimed by the applicant are 'health food bars' and a representation of the trade mark is shown below.

The application was accepted for registration without objection from the examination section of the Trade Marks Office, and duly advertised as accepted in the Australian Official Journal of Trade Marks (the Journal) of 15 June 2000.

After applying for and being granted an extension of time in which to do so, Sports Technology Limited, the opponent, filed a notice of opposition to registration of the trade mark on 13 December 2000. The opposition grounds claimed by the opponent encompass ss.42, 43, 58, 59 and 60 of the Trade Marks Act 1995. The opponent served and filed the evidence in support of its opposition by 13 July 2001. The applicant elected not to respond to the opposition by means of any evidence or written submissions.

The opponent is a New Zealand company and has used the present trade mark in New Zealand since October 1998. It has also registered the mark in New Zealand from a date of filing of 6 October 1997. On 15 September 1998, Mr Dick Aronson, at that time a Director and the General Manager of the opponent, entered into an agreement with the applicant to market VitaZone products in Australia as an exclusive distributor. Mr Aronson was appointed a Director of the applicant from 24 September 1998. The opponent now claims that it was unaware for some considerable time not only of the agreement entered into by its General Manager but also of Mr Aronson's position in the applicant company. By 8 September 2000, however, the opponent had become aware of the circumstances surrounding the present application and sought to have the application assigned to it - so as to protect its property rights. The opponent's evidence indicates that the present applicant from around November 1998 has sold some of the opponent's goods in Australia, although it is not entirely clear to what extent.

Although given the opportunity to do so, neither party has requested to be formally heard in the matter and it has now been directed to me for a decision based on the written material held in this Office.

The Evidence

The opponent's evidence in support of its opposition consists of a single declaration, with exhibits 'A' to 'I' inclusive, dated 11 June 2001, from David Mark Tetter, a Director of the opponent (the Tetter declaration). This evidence provides a brief history of the opponent, some background information concerning the dealings between the opponent and applicant, some allegations concerning the applicant and Mr Aronson and argument to support the opponent's position in the matter. Whilst some of this material may have better been presented as part of supporting written submissions, I must give due weight to arguments that are supported by the facts.

Discussion

As I have mentioned previously, the opponent's notice of opposition directed me to consider grounds of opposition under ss.42, 43, 58, 59 and 60 of the Act. I will now deal with each of these five grounds in that order.

(a) Section 42 - Trade mark scandalous or its use contrary to law

This section allows:

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

(a) the trade mark contains or consists of scandalous matter; or
(b) its use would be contrary to law.

The opponent has not led me, in its evidence, to consider any particular law (aside from the sections of the Trade Marks Act 1995 discussed below) which would debar the applicant from using the trade mark.

Thus, I find that in terms of s.42 the opposition is not successful.

(b) Section 43 - Trade mark likely to deceive or cause confusion

Here, the legislation reads:

43. 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.

As has been developed in many previous decisions of delegates of the Registrar, the key elements here are that there must exist a connotation inherent within the mark itself, that would lead to a likelihood of deception or confusion if the mark is used in relation to the goods or services of the application.

Nothing has been presented to me that would indicate that the word VitaZone has any sort of misleading connotation when used on 'health food bars' as a trade mark.

I find that this ground of opposition has not been established.

(c) Section 58 - Applicant not owner of trade mark

This section of the legislation allows:

58. The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

Note:  For applicant see section 6.

In order for the opponent to succeed with this ground of opposition it must establish three factors. It must be shown that the opponent's mark, upon which it relies to claim ownership rights, is substantially identical with the mark the subject of the application for registration - Carnival Cruise Lines Inc. v Sitmar Cruises Ltd, 31 IPR 375. The goods or services involved must be the 'same kind of thing' - Re Hicks' Trade Mark (1897) 22 VLR 636 at 640 - and the use of the opponent's mark must pre-date the applicant's claim to ownership. An applicant can claim its ownership rights based on the date of its application, or the first use of the mark, whichever is the earlier date.

The first question concerns the mark itself. The applicant has made its application for the mark in the form: VitaZone. The opponent, in its declaration, uses the form VITAZONE but I note that the exhibits refer to the mark in the form VitaZone. Such use by the opponent is shown in annexure 'A', a representation of the mark as registered in New Zealand; in annexure 'B', the licensing agreement signed by Mr Aronson in his role as General Manager of the opponent; in annexure 'G', the letter from an agent for the opponent to Mr Aronson demanding the mark be assigned to the opponent and also in annexures 'H' and 'I', letters from a Director of the opponent to Mr Aronson.

Thus, I believe that if the respective marks of the applicant and of the opponent are not entirely identical they are at least substantially identical - as per the requirement of Carnival Cruise Lines Inc. v Sitmar Cruises Ltd, supra.

A second aspect of comparison concerns the respective goods of the applicant and of the opponent. The application has claimed 'health food bars' in class 30 as the goods of interest. The opponent describes its goods as 'snackfood bars in this class', also in class 30, in its New Zealand registration. Elsewhere in the evidence the opponent has used the descriptions of both 'health foods' and 'bars' in the distribution agreement of Mr Aronson. This agreement, and the comments made about it in annexure 'I', makes it clear to me that the goods produced by the opponent are the same goods described in the present application.

As the present applicant has not put any material before me to lead me to any other conclusion, I accept that the respective goods of the two parties are one and the same. Thus, I am led to the conclusion that the goods of the respective parties are, indeed, the 'same kind of thing' as set out in Re Hicks' Trade Mark, supra.

This brings me to consider the third feature of determining ownership of a trade mark - the first use of the mark. Such a consideration encompasses either some sort of actual commercial use by a party or be use by virtue of the making of an application to register the trade mark, as shown at 399 and 400 in Aston v Harlee ManufacturingCompany, (1960) 103 CLR 391 - but must apply, in the present case, to use of or application for the mark VitaZone in Australia. The only evidence that has been presented to me concerning sales under the mark in Australia, prior to the present application date of 20 August 1999, is stated at clause 16 of the Tetter declaration. The opponent has made the claim that sales to the applicant began from November 1998. I am also mindful that the applicant here has not sought to counter any of the opponent's evidentiary material.

It does appear that the opponent, via Mr Aronson, supplied the goods to the applicant to market in Australia, under the VitaZone trade mark. The initial agreement came into effect from 22 September 1998, as per clause C of the Distribution Agreement of annexure 'B' to the Tetter declaration. Part of annexure 'B' consists of a document titled Exhibit 'B' which states that a minimum quantity of 3500 boxes containing 20 bars be supplied to the present applicant between November 1998 to October 1999. No clear picture emerges concerning the actual numbers of bars supplied from New Zealand or sold in Australia by the applicant. The opponent has stated, in the letter of 27 November 2000 from the opponent to Mr Aronson, exhibited at annexure 'I' to the Tetter declaration, that the applicant 'consistently performed below even the low expectations' and that 'Insight Health Pty Ltd has failed to purchase the relevant quantities contemplated by the agreement'. Whatever the true situation with regard to actual sales of the bars in Australia, the opponent's declaration provides support that at least some sales had been made before the present application was made on 20 August 1999.

The minutes of the opponent's business meeting of 21 April 1999, exhibited at annexure 'E' to the Tetter declaration provide further support to this view. In those minutes, a strong circumstantial confirmation for the opponent's use of the mark in Australia becomes apparent. One item makes the comment that an 'Australian sports magazine' has assessed the VitaZone food bar. Clearly this assessment occurred some time prior to the opponent's business meeting of 21 April 1999. This information is reported in those minutes as an entirely usual incident. No question is raised about why the VitaZone bar is being featured in an Australian publication - or how the magazine could have had access to the bar. Mr Aronson's name is linked, in those same minutes, with making an application for the trade mark in Australia - on behalf of the opponent. A marketing strategy for Australia is also detailed. From these circumstances I believe that the VitaZone mark was already in use by the opponent in Australia by 21 April 1999, some four months before the present filing date.

Another circumstance shown in the evidence also directs me to reach this same conclusion. A Distribution Agreement exists here between the opponent and the applicant that is described as being in effect from 22 September 1998 to 31 October 2001. Within the agreement statements are made to the effect that the opponent's VitaZone bars are to be marketed by the applicant. Minimum quantities of bars to be purchased by the applicant from the opponent are set out within the agreement - starting from the month of November 1998. In the text Australian Law of Trade Marks and Passing Off (Second Edition) by D. R. Shanahan under the heading of 'Manufacturers marks' on page 41 the comment is made:

A manufacturer who has applied a mark to goods to indicate that he or she is the "origin" of the goods is most unlikely to be denied proprietorship because of the activities of some dealer in those goods. The evidence in these cases will generally show that in the hands of the dealer, the mark has retained its initial significance as an indication of the manufacturing source of the product.

On page 42 Mr Shanahan goes on to state:

Even a small degree of use, insufficient to achieve a market reputation, may suffice to establish the manufacturer's priority, and the manufacturer's own sales to the dealer may well be enough.

Pertinent to this specific situation are the words of Justice Astbury in the U. K. High Court of Justice, Chancery Division, in the matter of New Atlas Rubber Company Limited's Trade Mark, 35 RPC 269. At 275 he comments:

But it is perfectly plain that, if there has been user in this country by, or on behalf of, the foreign owner of the mark, then the person who has so used that mark, as agent for and on behalf of the foreign owner, cannot appropriate it as his property by registration. An importer cannot register the foreign manufacturer's foreign mark (See the Apollinaris Case ....[(1891) 8 RPC 137 at 160]).

As I have stated earlier, I accept that some sales took place from the opponent to the applicant between November 1998 and 20 August 1999. However, I believe that even the Distribution Agreement, in view of the material that it contains of the detail of the agreed sales to the applicant, may well constitute use by the opponent from an even earlier date - 22 September 1998.

From the foregoing, I find that the opponent has established to my satisfaction that the applicant is not the owner of the VitaZone trade mark in Australia. Thus, I find that the opposition succeeds under the s.58 ground.

(d) Section 59 - Applicant not intending to use trade mark

Here, the legislation allows:

59. The registration of a trade mark may be opposed on the ground that the applicant does not intend:

(a) to use, or authorise the use of, the trade mark in Australia; or
(b) to assign the trade mark to a body corporate for use by the body corporate in Australia;

in relation to the goods and/or services specified in the application.

Note:  For applicant see section 6.

Without some sort of admission of its lack of intention to use a trade mark it can be difficult for an opponent to establish that lack of intent as a reality. The opponent here has made the allegation of the applicant's lack of intention, but has not pointed to any specific elements in the evidence to support such a conclusion. Without some suggestion from the opponent directing me to a reason for its allegation, the case law would tend to support the contrary deduction. The applicant has made an application to register the trade mark on 20 August 1999.

Justice Fullagar in Aston v Harlee Manufacturing Company, supra, at 401, in discussing ownership of a trade mark under the Trade Marks Act 1905 stated:

As to this I need only say that I do not regard his Honour [Dixon J] as meaning that an applicant is required, in order to obtain registration, to establish affirmatively that he intends to use it. There is nothing in the Act or the Regulations which requires him to state such an intention at the time of application, and the making of the application itself is, I think, to be regarded as prima facie evidence of intention to use. ...... the burden must rest on the opponent, or the person aggrieved, of proving the absence of intention.

I do not consider that the opponent in the present matter has discharged this onus of proving an absence of intention on the part of the present applicant. Thus, I find that opposition under the s.59 ground is not established.

(e) Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

This section of the Trade Marks Act 1995 reads:

60. 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.

Note 1:  For deceptively similar see section 10.

Note 2:  For priority date see section 12.

In order to establish this ground of opposition the opponent must be able to point to a trade mark sufficiently similar to the present application that 'had acquired a reputation in Australia'. The evidence presented by the opponent to support a 'reputation' for its trade mark in Australia as at the date of the present application is, at best, extremely thin. Whilst I am prepared to agree that there is evidence to support at least some sales in Australia under the opponent's mark prior to the date of filing, I am not prepared to find that these sales had established a sufficient reputation in the relevant market. There is simply no evidence provided by the opponent to verify such a finding.

From the foregoing, I find that the ground of opposition taken under s.60 is not successful.

Conclusion

From the above, I have found that the opponent has succeeded in this opposition matter under its s.58 ground. The other grounds of opposition, those taken under ss.42, 43, 59 and 60 have not been made out. As a result of the opponent's success under s.58 I refuse to register trade mark number 804370.

Don Nancarrow

Hearing Officer

Trade Marks Hearings

15 February 2002