Strandbags Group Pty. Limited

[2011] ATMO 130

TRADE MARKS ACT 1995

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

Re:Trade mark applications numbers 1008522 and 1012031(18) - COLORADO (word mark) - in the name of Strandbags Group Pty. Limited and proposal to revoke acceptance of same.

Delegate:	John Spence
Representation:	Applicant: Mr. David Catterns, Q.C. of Senior Counsel, instructed by Mr. Martin Pollock, Solicitor, of Spruson & Ferguson, Patent and Trade Mark Attorneys
Decision:	2011 ATMO 130 Section 38 – proposed revocation of acceptance – geographical expression - grounds of objection pursuant to Section 41(5) not properly considered – the basis for revocation adequately made out, but having regard to all the circumstances not applied – exercise of discretion in favour of Applicant - acceptances allowed to stand.

Background

1. These proceedings relate to a request to be heard in respect of the proposed revocation of acceptance, pursuant to the provisions of Section 38 of the Trade Marks Act 1995 (“the Act”), of trade mark applications Nos. 1008522 and 1012031 filed in the name of Strandbags Group Pty. Limited (“the Applicant”) for goods in Class 18 and having the priority dates of 28 June 2004 and 20 July 2004 respectively. Both applications are for the word mark “COLORADO”. The former is in respect of handbags, travel goods and belts, whilst the latter is in respect of handbags, travel goods, wallets, purses and key cases.

2. Revocation of acceptance was also proposed in relation to trade marks Nos. 1012330 and 1044659, both in relation to services in class 35. However, by e-mail dated 8 June 2011 the Applicant’s attorneys advised that their client would not be proceeding with the request for a hearing in respect of those marks and on 14 June 2011 Deputy Registrar Arblaster directed that acceptance of these two applications should be revoked and that they should be referred back to examination.

3. The application and examination of these marks has occurred in the context of a long-standing and ongoing legal dispute between the Applicant and the company Colorado Group Limited in relation to rights in respect of the “COLORADO” trade mark. That dispute has been the subject of extensive litigation (primarily pertaining to the issue of infringement) before the Federal Court of Australia and initiated by Colorado Group Limited against the Applicant. The most recent judgment (of the Full Court) was handed down on 28 November 2007. Leave to appeal from that decision to the High Court of Australia has since been refused. One effect of that litigation was to cause the progress of the four pending “COLORADO” applications to undergo an extended period of deferment while the litigation was finalised.

4. In the course of the conduct of these applications, the first examination report issued on 24 October 2004 and it raised objections arising from the inherent lack of distinctiveness in respect of the geographical expression “Colorado” (the Section 41(5) ground) and from the perceived conflict with those prior existing “COLORADO” trade mark entries held in the names of other parties (notably Colorado Group Limited) pursuant to Section 44. Subsequently a second examination report issued on 8 April 2009. This report, without any submissions appearing to have been made on behalf of the Applicant and without any supporting evidence having been provided or assessed as at that point in time, proceeded to withdraw the Section 41(5) objection.

5. By covering letter dated 30 November 2010 from Spruson & Ferguson (the attorneys representing the Applicant), and accompanied by detailed supporting evidence, written submissions were made in response to the first examination report and addressing both the objection raised pursuant to Section 44 and the Section 41(5) ground (which had already been withdrawn). No reference was made to the intervening second examination report. As the result of these sub- missions, each of the four applications was able to attain acceptance and the advertisement of same took place on 23 December 2010.

6. The revocation of acceptance in respect of all four applications then took place. The basis of the proposed revocation was set out in two items of correspondence from Deputy Registrar Braybrooks dated 16 February 2011 and 5 May 2011 respectively. The former letter, while expressing the view that Section 41(6) should have been raised as the appropriate ground for objection, indicated the concern that the examiner had “obviously erred in accepting Strandbags’ applications without evidence of acquired distinctiveness for the purposes of s41(5)”. In the latter of those items of correspondence, and after having considered the responding submissions of the Applicant on the point, the Deputy Registrar conceded that the applications might “just” qualify under Section 41(5) rather than Section 41(6). However he also expressed the view that the evidence which had been submitted to that point was not sufficient to support the acceptance of the four applications and he maintained the revocation of same. In turn, the Applicant exercised its right to be heard before revocation took place.

7. On 20 May 2011 the lawyers acting for Colorado Group Limited proceeded to file and serve Notices of Opposition in respect of each of the four applications so that Opposition proceedings are currently on foot. That factor has no direct bearing on the issue of revocation which is of present concern, but it is material in relation to a consideration of Section 38 as constituting a relevant circumstance which should be taken into account. By official letter dated 22 June 2011, a direction was issued suspending the Opposition proceedings in relation to Nos. 1008522 and 1012031 for the period of six months to 20 December 2011 or until the revocation action is finalized. As at the date of the hearing, and indeed up to the present time, no evidence in support has been filed or served in relation to the Opposition proceedings.

8. The matter was duly set down for a hearing which took place at the Canberra offices of IP Australia on 4 August 2011 before me as the delegate of the Registrar. On that occasion the Applicant was represented by Mr. David Catterns, Q.C. of Senior Counsel instructed by Mr. Martin Pollock, Solicitor, of Spruson & Ferguson, Patent and Trade Mark Attorneys.

The Evidence

1. By covering letter dated 30 November 2010 (that is, at a point in time after the date on which the Section 41(5) objection had been withdrawn by the examiner), supporting evidence was filed on behalf of the Applicant. That evidence took the form of the Statutory Declaration of Rory Crawford made on 26 November 2010 together with the Annexures “RC 1” to “RC 24” inclusive. Mr. Crawford is the Managing Director of Strandbags Group Pty. Limited and he is described as having been employed by the Applicant since 1 May 1998 and as having held his present position since 31 December 2008. The salient points which emerge from that evidence relate to the length of use and the extent of use of the “COLORADO” trade mark, asserting that the expression “COLORADO” has been extensively used by the Applicant since at least 1998 and arguably since 1992 with sales of a value ranging from $1 million in 1996, exceeding $5 million in 2004 and increasing to $20 million in 2010.

10.  With my agreement the Applicant filed supplementary evidence by covering letter dated 1 September 2011. That evidence comprises:

·    Statutory Declaration of Stephanie Kelly made on 15 August 2011;

and

·    Statutory Declaration of Martin Pollock made on 1 September 2011.

11.  The evidence of Ms. Kelly (who has held the position of Executive Buyer with the Applicant since 20 September 1993) goes to establishing that instances of actual use of the “COLORADO” trade mark as a word took place during the period between 1998 and 2004. Ms. Kelly annexes photographs of suitcases and backpacks featuring the expression “COLORADO” as a word and sold by the Applicant in the relevant period (that is, before the priority dates).

12.  Mr. Pollock’s evidence serves to update the Statutory Declaration of Rory Crawford made earlier on 26 November 2010. In particular, Mr. Pollock takes the annexure marked “RC 19 Confidential” (which sets out a list of the retail sales of all “COLORADO” branded products on an annual basis for the years from 2000 to 2010) and he provides an analysis of those figures broken down into the separate sub-categories or product groups of leather handbags, luggage, travel, women’s smallgoods, business and backpacks. By this means, Mr. Pollock seeks to demonstrate more clearly the level of use of the “COLORADO” trade mark in a manner which is directly relevant to the specific goods of each application.

13.  Statements concerning the use of the “COLORADO” trade mark by the Applicant are to be found in each of the three reported Colorado decisions[1], and those statements are not only helpful but also they are matters of public record.

Discussion

[1] Justice Finkelstein at first instance in Colorado Group Limited v. Strandbags Group Pty. Limited (2006) 67 IPR 628 at paragraphs 48-53; and also in Colorado Group Limited v. Strandbags Group Pty. Limited (No. 2) (2006) 69 IPR 281 where, at paragraphs 11 to 21, Justice Finkelstein further considered the use of the “COLORADO” trade mark by the Applicant His Honour went on to state (at paragraph 30) that "On the facts as I have found them, Edgarlodge was, and its successor Strandbags Group is, unambiguously the proprietor of the COLORADO mark in respect of handbags because of first use". On appeal, in Colorado Group Limited v. Strandbags Group Pty. Limited (2007) 74 IPR 246 the Full Court also endorsed the Applicant’s reputation in the “COLORADO” trade mark (see, for example, Justice Kenny at paragraph 21, Justice Gyles at paragraph 38, and Justice Allsop at paragraphs 56-63 and 178-179).

Section 38

14. Section 38 has two limbs namely:

(i) whether the application in question should have been accepted taking into account all the circumstances which existed when the subject application was examined (whether or not they were known at the time); and

(ii) whether the Registrar is satisfied that it is reasonable to exercise the discretion to revoke acceptance taking into account all of the relevant circumstances.

15.  The circumstances surrounding the withdrawal of the Section 41(5) objection, which in turn allowed the four trade mark applications to proceed to acceptance, are unclear. However, in deciding this matter I am not called upon to review the conduct of the examiner nor the process that was followed in examination. The question before me is whether, on the basis of information now known to the Registrar, a valid ground for rejection under Section 41 existed. The issue of the applicability of 41(5) is to be resolved at the time of filing (although subsequent use may inform this decision).[2]

[2] See Chocolaterie Guylian NV v. Registrar of Trade Marks (2009) AIPC 92-355 at paragraph 54.

16.  Deputy Registrar Braybrooks has indicated that he was prepared to accept that the trade mark just came under the provisions of Section 41(5), rather than 41(6) for the relevant goods and services. The two contending parties both accepted before the Federal Court that the provisions of s41(5) should apply and the Full Court proceeded on this basis. That decision[3] is equivocal and not decisive on the point and it provides only limited assistance on the issue. That said, the Full Court did not decide against the proposition that Section 41(5) should be applied. Under these circumstances, and particularly given that the Deputy Registrar agreed that the issue could be resolved under Section 41(5), I see no reason to vary that approach or to depart from this view.

[3] See Colorado Group Limited v. Strandbags Group Pty. Limited (2007) 74 IPR 246 per Justice Kenny (at paragraphs 29-30 and 32), Justice Gyles (at paragraphs 36 and 38-41) and Justice Allsop (at paragraphs 121-124, 129 and 137).

Discretion

17.  In the course of his correspondence (notably in the official letter dated 5 May 2011), Mr. Braybrooks was critical of the evidence and he pointed to anomalies and shortcomings which were apparent in that evidence. In particular, as Mr. Braybrooks rightly observed, much of the evidence and the information provided related to the business activities and retail services of the Applicant when considered generally and not necessarily to the sales and reputation of the “COLORADO” trade mark in particular. There was no apparent breakdown of sales figures and no comparative analysis to demonstrate that proportion of the Applicant’s turnover which was attributable to the use of the “COLORADO” trade mark. These criticisms were justified. However, I am satisfied that the shortcomings which have earlier been pointed out have been answered and met by the Applicant and that the available evidence which is now before me (and which includes the combined effect of the Statutory Declarations of Stephanie Kelly and Martin Pollock and the findings of fact expressed in the Colorado decision) is sufficient to establish the entitlement of the Applicant to have acquired a distinctive reputation in respect of the ”COLORADO” trade mark and in relation to goods of the relevant nature. I note however that the evidence before me has been considered on an ex parte basis only and that it has not been subjected to testing in the way in which it might be in an inter partes matter.

18. I am therefore satisfied, on the basis of the evidence now before me, that the Applicants’ use of the trade mark “COLORADO” in relation to handbags, travel goods, wallets, purses, belts and key cases, when taken together with the (albeit very limited) capacity of the trade mark to distinguish the Applicants goods, has been sufficient to satisfy the requirements of Section 41(5). At the same time, no endorsement to this effect has to date been appended to the file. It would therefore be open to me, in the exercise of the Registrar’s discretion pursuant to Section 38, to revoke acceptance and then to reaccept the two relevant applications subject to the entry of such an endorsement.

19. However Section 38 also requires me to consider whether this approach would be reasonable. Revocation of acceptance followed by re-examination and (presumably) fresh acceptance based on the new evidence would serve only to delay proceedings. That outcome may be detrimental both to the Applicant and the Opponent. Suffice it to say, I think that the most reasonable course would be to direct that an endorsement should be entered on the Register to the effect that evidence sufficient to meet the requirements of Section 41(5) has been submitted to the Registrar. This approach would then allow the proposal to revoke acceptance to be withdrawn and the Opposition proceedings (which at present have been deferred) to be reinvigorated and to proceed without further delay.

1. The decision by Deputy Registrar Braybrooks to effect revocation of acceptance was properly made and that course was appropriate for the following reasons. The withdrawing of the Section 41(5) objection without appropriate evidence of acquired distinctiveness being required or adequately assessed gave rise to a valid ground for revocation pursuant to the first limb of Section 38. Further, no appropriate form of endorsement has hitherto been imposed on the Applicant and entered on the Register in respect of each of the two relevant applications. At the same time, on balance and taking into account all of the relevant circumstances, I am persuaded that in this instance revocation is not the appropriate course to adopt and that I should exercise the Registrar’s discretion in favour of allowing acceptance to remain. In so doing, I am mindful that the applications in their present form are not suitable for registration. Consistent with the established practice of the Trade Marks Office in relation to applications accepted for possible registration on the basis of evidence of use, the following endorsement shall be entered onto the official record, namely:

   “Evidence of use sufficient to meet the requirements of Section 41(5) has been submitted to the Registrar”.

Decision

21.  I therefore direct that an endorsement worded in the manner as indicated above shall be imposed on each of the applications presently under consideration, and on the basis of this step being taken I am satisfied that the acceptance of same should not be revoked in this instance.

John Spence
Hearing Officer
Trade Marks Hearings
10 December 2011