Telecommunications Industry Ombudsman
[1999] ATMO 82
•19 August 1999
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS
WITH REASONS
Re:Trade mark application 750158 in the name of TELECOMMUNICATIONS INDUSTRY OMBUDSMAN LIMITED.
Background
Trade mark application number 750158 was filed on 2 December 1997 in the name of Telecommunications Industry Ombudsman Limited (the applicant). The applicant seeks to register the words telecommunications industry ombudsman as a trade mark in respect of the following services in class 42:
Services in class 42 being the reception of complaints and disputes regarding telecommunication services, the investigation of those complaints and disputes and the facilitation of their resolution.
Upon examination of the application, grounds for rejection were raised under section 41 of the Act on the basis that the mark directly describes the services for which registration is sought. The trade mark was said to be totally devoid of inherent adaptation to distinguish. The provisions of subsection 41(6) thus applied.
A further point was raised during examination concerning the nature of Ombudsman services and the function of the words telecommunications industry ombudsman as a trade mark. The point raised being that the applicant's mark did not appear to be a sign used in the course of trade and did not, therefore, fall within the definition of a trade mark prescribed by section 17 of the Act.
The Principal Examiner maintained the grounds for rejection and the applicant applied to be heard. The hearing took place before me in Melbourne on 3 June 1999. Mr Mark Goldblatt of Counsel represented the applicant on behalf of the applicant's attorneys, Corrs Chambers Westgarth.
Discussion
Section 17 - What is a trade mark?
The grounds for rejection raised under section 17 relate to the nature of Ombudsman services and the applicant's statutory rights under the TELECOMMUNICATIONS (CONSUMER PROTECTION AND SERVICE STANDARDS) ACT 1999 (Telecommunications Act). Ombudsman services are provided free to the public. On this basis, the Principal Examiner maintained that the applicant's mark was not used in the course of trade and, as such, the mark failed to fall within the definition of a trade mark (pursuant to section 17). The Principal Examiner also made the point that the applicant's monopoly in the services (via the Telecommunications Act) prevented competition and, as such, the mark could not serve to distinguish applicant's services from those of other traders.
Mr Goldblatt's submissions, on the whole, pertain to the applicant's rights under the Telecommunications Act. The relevant section of the Telecommunications Act provides that :
s128(3) To avoid doubt, there is only one Telecommunications Industry Ombudsman scheme, namely the scheme operated by Telecommunications Industry Ombudsman Limited (ACN 057 634 787).
The foremost requirement of section 17, Mr Goldblatt said, was that the applicant's sign distinguish its services. He submitted that the Telecommunications Act conferred upon the applicant exclusive rights to provide the designated services and, as such, the trade mark clearly distinguished the services of the applicant. He further submitted that, statutory rights aside, the mark distinguished the applicant from all other Ombudsmen who had been appointed to carry out that role in respect of other industries.
Mr Goldblatt stated that there was no definition of trade per se in the Act and that it was something to which there appeared to be no authority. He also drew my attention to the fact that the Trade Marks Office had already accepted two of the applicant's trade marks in respect of the same services (619332 and 619333). Finally, he said that Ombudsman services were not necessarily free of remuneration. Mr Goldblatt said that Ombudsman services in general appeared to be adopting a 'user pays' principle, as per other types of government services.
I turn now to the relevant section of the Act. Section 17 reads as follows:
17. A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
For a trade mark to be valid, it must indicate (ie. distinguish) a connection in the course of trade. It has long been judicially recognised that the term is not limited to the actual selling of goods or services. Indeed, the Act allows for a somewhat broader definition than that of the relevant section of the Trade Marks Act 1955 (the repealed Act). Section 17 of the Act concerns goods or services being dealt with or provided for the 'purposes of trade', trade which may incorporate the provision of goods or services (dealt with in the course of business) other than for value[1].
[1] Recommended Changes To The Australian Trade Marks Legislation (Working Party's report) - July 1992, Chapter 1, p.36-37.
In the present case, the applicant operates to provide the services of a Telecommunications Industry Ombudsman (TIO). The Telecommunications Act requires all telecommunications carriers and eligible service providers to be members of the TIO scheme. The scheme is funded by its members on the basis of the number and comparative percentage of complaints made to the TIO[2]. The Ombudsman service is provided free to the general public, however the service is provided for or otherwise dealt with by the applicant under obligation to its members. On this basis, I believe the mark applied to such services is used in the course of trade. Furthermore, in the context of Ombudsman services in general, the sign serves to indicate (as defined by section 17) the services of the Telecommunications Industry Ombudsman. In light of the foregoing, I am satisfied the trade mark falls within the definition provided for by section 17 of the Act.
[2] 41 - Trade mark not distinguishing applicant's goods or services
In his submissions concerning section 41, Mr Goldblatt commented on the structure of section 41, as opposed to section 24 of the repealed Act. Section 24 of the repealed Act, he said, was couched as a prohibition and included exclusory provisions, in respect of descriptive marks, not contained in section 41 of the current Act.
Mr Goldblatt submitted that the applicant's mark was not a descriptive mark within the rationale of section 41 of the Act, by virtue of the rights of the applicant under the Telecommunications Act. Mr Goldblatt said that the applicant's monopoly in this respect prevented other traders from using the mark in good faith. The mark, he said, was therefore capable of distinguishing the applicant's services.
On the question of the mark's capacity to distinguish, Mr Goldblatt referred to the W & G[3], Michigan[4], and Oxford[5] cases. In reference to these cases, he made the point that the law in relation to descriptive words centred on the issue of proper purpose or improper motive. He pointed out, that in each of the above-mentioned cases, it was decided that other traders would have an honest desire to use the mark in the ordinary course of business.
[3] Du Cros (W. and G.) Ltd's Application (1913) 30 RPC 660;
[4] Clark Equipment Co. v Registrar of Trade Marks (1964) 111 CLR 511;
[5] Oxford University Press v Registrar of Trade Marks (1990) 17 IPR 509.
Mr Goldblatt submitted that the applicant's case was distinguishable from the established cases, in this regard, because the legislature (ie. Telecommunications Act) precluded others from providing the services of a Telecommunications Ombudsman and thus prevented others from legitimately using the mark. He further submitted that this was a monopoly gained apart from the effects of use, registration, or the courts. The applicant's monopoly and exclusive right to use the mark, he said, was based on the legislature. He submitted that, as no other trader could legitimately use the mark in respect of the designated services, the mark was inherently adapted to distinguish the applicant's services.
In conclusion, Mr Goldblatt said that the applicant could not support a case under subsection 41(6) of the Act, as there had been no use of the mark by the applicant prior to the date of filing. However, he again submitted that the mark was inherently adapted to distinguish, by reason of the applicant's monopoly in the designated services. This monopoly, he said, constituted other circumstances, as provided for by subsection 41(5) of the Act.
The matter to be decided under section 41 is whether the applicant's trade mark is capable of distinguishing the designated services from the goods or services of other traders. Indeed, subsection 41(2) of the Act directs that if a trade mark is not capable of distinguishing then the Registrar must reject the application.
Subsections 41(3) to 41(6) of the Act are concerned with the operation of section 41. This section of the Act has recently been judicially considered by Branson J. in the Oregon[6] case. There, her Honour observed (at 504) that, in deciding a trade mark's capacity to distinguish under the terms of section 41, the Registrar has three alternatives. The Registrar may conclude:
[6] Blount Inc v Registrar of Trade Marks 40 IPR 498.
(a)that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or
(b)that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or
(c)that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of distinguishing the designated goods or services.
Justice Branson noted that, if the Registrar reaches conclusion (a), then he or she must accept the application in accordance with subsection 33(1) of the Act. If the Registrar reaches conclusion (b), the provisions of paragraphs (a) and (b) of subsection 41(6) apply. Finally, if the Registrar reaches conclusion (c), the provisions of paragraphs (a), (b) and (c) of subsection 41(5) apply.
In each of the alternatives set out by Justice Branson, the degree of inherent adaptation of a trade mark is the first and most critical factor to consider. On the question of inherent adaptation, Justice Branson observed at 506:
The notion of a trade mark being inherently adapted to distinguish the designated goods was of primary significance under the 1955 Act [Trade Marks Act 1955]. There is no reason to think that the phrase "inherently adapted to distinguish the designated goods from the goods of other persons" appearing in s 41(3) of the Act is not intended to be understood in the light of decisions under the 1955 Act, and comparable United Kingdom legislation which includes references to inherent adaptability.
Justice Branson then refers to and upholds the established test for determining whether a trade mark is adapted to distinguish, as given by Kitto J. in the Michigan case, supra, at 514:
… the question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
Mr Goldblatt has stated that the applicant cannot support acceptance of the mark under subsection 41(6) of the Act. Therefore, in order to establish that the mark telecommunications industry ombudsman is capable of distinguishing, the applicant must establish that the mark is to some extent inherently adapted to distinguish. Mr Goldblatt submits that the applicant's mark is inherently adapted to distinguish by virtue of the statutory monopoly it holds in respect of the designated services, afforded by the Telecommunications Act. The relevant section of the Telecommunications Act is restated below :
s128(3) To avoid doubt, there is only one Telecommunications Industry Ombudsman scheme, namely the scheme operated by Telecommunications Industry Ombudsman Limited (ACN 057 634 787).
This section of the Telecommunications Act makes clear that there is to be only one Telecommunications Industry Ombudsman scheme and that the applicant has exclusive rights to operate the scheme. It is important to note, however, that the Telecommunications Act provides nothing in respect of the rights of the applicant to acquire rights under the Trade Marks Act. Nevertheless, it does, at present, preclude other persons from providing Telecommunication Industry Ombudsman services and thus prevents others from using the words telecommunications industry ombudsman in the course of trade in respect of such services.
The question remains whether this statutory monopoly, in respect of the designated services, provides a basis for the inherent adaptation of the mark. The concept of inherent adaptation has long been judicially established. Indeed, each of the cases relied upon by Mr Goldblatt give notable consideration to it. Most recently, Justice Branson in the Oregon case, supra, upheld the long standing rule defining the term adapted to distinguish (as stated above).
It is the case, as Mr Goldblatt has submitted, that the degree of inherent adaptation of a mark is to be tested by reference to the likelihood of other persons legitimately desiring to use the words in connection with the same or similar services. However, the honest use of a mark by others is for the sake of the ordinary significance of the words. Inherent adaptability is something which depends on the intrinsic features of the mark itself. It is not something that can be acquired or changed by use or other circumstances, such as statutory protection. This basic premise is consistent throughout the relevant case law.
Hearing Officer Forno, in the Australian Airlines[7] case, addresses the question of inherent adaptation in a similar context to that of the subject application. Mr Forno cites at 274 the following passage from the Michigan case, supra, (Kitto J. at 513):
[7] Australian National Airlines Commission's Application 16 IPR 270;
It is undeniable that a mark which, considered by itself, would seem unadapted to that purpose, because its natural signification is against a notion that goods to which it is applied are the goods of the applicant and of no one else, may yet come by actual use or by virtue of special circumstances to be so closely associated with applicant's goods in the minds of the relevant public that its apparently disqualifying signification is effectually obscured, and distinctiveness in fact is thus achieved. But although such a measure of practical success with the mark may well provide a sufficient foundation for a passing-off action, the Trade Marks Act does not accept it as necessarily sufficient for the special protection which it affords to registered trade marks.
In interpreting his Honour's comments, Mr Forno continues at 274:
What his Honour there said in relation to a passing off action is equally applicable, I think, to any other remedy to which a plaintiff is entitled to have recourse in order to protect its rights, including any statutory remedy which the Parliament may see fit to confer. The general inference to be drawn from the passage above cited is that a mark must qualify for registration under the Trade Marks Act by virtue to its own inherent nature without reference to "special circumstances" which may lead to the achievement of distinctiveness in fact.
Although the above-mentioned cases are framed in the context of the repealed Act, the point to be had from these passages is that use of a mark or 'other circumstances' cannot affect the inherent nature of a mark. On this point, the words of Jacob J. in the Treats[8] case are also of relevance. Here his honour says at 306:
[8] British Sugar PLC v James Robertson & Sons Ltd [1996] RPC 281.
The phrase ["devoid of any distinctive character"] requires consideration of the mark on its own assuming no use. Is it the sort of word (or other sign) which cannot do the job of distinguishing without first educating the public that it is a trade mark? A meaningless word or a word inappropriate for the goods concerned ("North Pole" for bananas) can clearly do. But a common laudatory word such as "Treat" is, absent use and recognition as a trade mark, in itself…devoid of any distinctive inherently character.
The mark telecommunications industry ombudsman directly describes the nature of the designated services. These words, absent the statutory protection afforded to the applicant by the Telecommunications Act, cannot do the job of distinguishing the applicant's services. These words are common descriptive words, which are not to any extent inherently adapted to distinguish Telecommunications Industry Ombudsman services. Accordingly, I find that the trade mark is a sign which falls within the provisions of subsection 41(6) of the Act.
To address Mr Goldblatt's comments regarding the structure of section 41 and the intent of the legislation, it is correct to say that section 41 does not have the exclusory provisions of section 24 of the repealed Act and that it is expressed in terms which presume registrability. Nevertheless, the requirement of section 41, that a trade mark be capable of distinguishing, prevails.
Decision
I have found that the mark telecommunications industry ombudsman, in respect of the designated services, falls within the definition of a trade mark pursuant to section 17 of the Act.
In regard to section 41 of the Act, I have found that the trade mark is not to any extent inherently adapted to distinguish the application services. The provisions of subsection 41(6) thus apply. The applicant has failed to meet the requirements prescribed by subsection 41(6) and I therefore reject the application, pursuant to the provisions of subsection 41(2).
Michelle Edlington
A/Senior Examiner
19 August 1999
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