The Australian Telecommunications Commission v Digital Equipment Corporation

[1994] ATMO 16

TRADE MARKS ACT 1955

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS

Re:Opposition  by DIGITAL EQUIPMENT CORPORATION to the registration of trade mark application  number  B482130(38), a mark filed in the name of THE AUSTRALIAN TELECOMMUNICATIONS COMMISSION .

On 24 February 1988, The Australian Telecommunications Commission, a statutory corporation established under the Telecommunications Act 1975, filed application number 482130 seeking registration of the trade mark DIGITAL METROPOLITAN SERVICE. The services claimed in the application were described as digital transmission services; and all other services in class 38.

On 18 April 1991 in the Official Journal of Trade Marks this trade mark was advertised as accepted in Part B for the services telecommunication services being data communication links.  Acceptance was subject to the condition  that registration gave no right to the separate exclusive use of the words DIGITAL and METROPOLITAN.

On 18 July 1991, and under the provisions of section 49 of the Trade Marks Act, Digital Equipment Corporation, a Massachusetts corporation of Maynard, Massachusetts in the U.S.A., filed a notice opposing the registration of this mark. The grounds of the opposition are general, but include the specific claim that DIGITAL METROPOLITAN SERVICE is not a registrable trade mark within the meaning of section 25 of the Trade Marks Act.

On 6 December 1993, after  various extensions of time were successfully sought by both sides, service of evidence by both parties was completed.

On 29 January 1994, in Canberra, the parties to the opposition were heard.  The opponent, Digital Equipment Corporation, was represented by Mr. Graham Halford of the Sydney firm of Halford & Co.  The applicant, The Australian Telecommunications Commission, was represented by Mr. Trevor Stevens of the Sydney office of the firm of Davies Collison Cave.

The Evidence

The evidence in support of the opposition is a statutory declaration by Mr. Robert Starkey. He has been with a company called Digital Equipment Corporation (Australia)  Pty. Limited since 1972.  He is an engineer and now holds a position of Director of Engineering.  Mr. Starkey is chairman of a task force set up to advise the State of Queensland developing information technology.  He is also a member of a number of research and advisory groups set up by the Queensland University and the Bond University.

The applicant's evidence in answer is a statutory declaration  by Mr. Courtney Ross Broomhall.  Mr. Broomhall is the manager of DDS/DMS Marketing Operations of Telstra Corporation Limited.  This company was established as the result of a merger between the  applicant, The Australian Telecommunications Commission, and another corporation.  Mr. Broomhall gives a detailed account of the applicant's use of the trade mark DIGITAL METROPOLITAN SERVICE and exhibits a quantity of his company's promotional material.  A second declaration in the evidence in answer comes from Mr. Walter Ernest Rothwell.  He is an executive director of the Australian Telecommunications Users Group; he was previously Director of Naval Communications with the Royal Australian Navy.  Finally, there are 4 trade declarations all of which come from people with significant experience in the telecommunications industry.

The evidence in reply is a single declaration from Mr. Robert Burns.  For 23 years Mr. Burns has been working with "digital network services".  Presently he is a network project manager with the same company as Mr. Starkey, Digital Equipment Corporation (Australia) Pty. Limited.  Previously Mr. Burns worked with Telecom Australia as one of their Senior Technical Officers.

The opponent's submissions

Mr. Halford affirmed that the only ground of objection supported by the evidence, was the claim that the mark DIGITAL METROPOLITAN SERVICE was not qualified for acceptance in terms of section 25 of the Act. This was the only ground argued.

To commence Mr Halford took me to the Starkey declaration in the opponent's evidence in support, and in particular to exhibit RS2.  This exhibit is described by Mr. Starkey as

.... advertisement explaining the benefits of a data service provided by the Australian Telecommunications Commission (trading as Telecom Australia) and calling itself "Digital Metropolitan Service".     This service is described as a "fast, easy access to the sophisticated Telecom Dedicated Digital Network, with transmission of a highest quality at medium speeds within the metropolitan area". 

The exhibit is a collection of some 26 pages which come variously from trade brochures, information sheets, newsletters and the like.  As Mr. Starkey says they comprise advertisements put out by the applicant to explain the benefits of their data transfer system and Mr Stevens raised no complaint to this description.   Mr. Halford points out that the exhibit shows numerous instances where the words of the trade mark, DIGITAL, METROPOLITAN and SERVICE are being used descriptively in ordinary English sentences. On the first page of RS2 the following phrases use the words separately :-

Local and remote digital loop testing facilities ....

Operates only within the metropolitan telephone district ...

...temporary services are also available   (My emphasis)

On the second page of Exhibit RS2 is the sentence:

At last, a low cost, digital data transmission service for the metropolitan area.        (My emphasis)

These are not isolated examples. Inspection shows that the words DIGITAL METROPOLITAN and SERVICE are used  descriptively throughout the Exhibit.  At one page a questionnaire, which is part of a pamphlet entitled General Information; Telecom DMS Digital Metropolitan Service; Telecom Australia,  asks the question:

Do you have any other Leased Line Data Services?

and as possible responses, offers amongst the answers

Digital Data Service.......................... 2  ¢

Private Modem Service...................... 3  ¢

Other terms containing the words which appear and are sometimes repeated, are dedicated digital network;  a high performance, high quality digital connection that costs less than an analogue system;   AT LAST, A LOW COST, DIGITAL DATA TRANSMISSION SERVICE FOR THE METROPOLITAN AREA;  local digital loop and  remote digital loop

There are also instances in the text of this exhibit, where the whole trade mark is used apparently as a descriptive denomination of the services.For example, on pages 7 and 8 is the sentence DIGITAL METROPOLITAN SERVICE COMES TO SYDNEY.

Mr. Halford pointed out that in a good number of these instances there is no indication that the words DIGITAL METROPOLITAN and SERVICE are used as trade marks. For example, on the second page of RS2  the term DIGITAL METROPOLITAN SERVICE appears in the heading and is identified with the well recognized ä symbol. However, when the same words appear in the text in the sentence AT LAST, A LOW COST, DIGITAL DATA TRANSMISSION SERVICE FOR THE METROPOLITAN AREA, they do not exhibit the ä symbol, nor in any other way are they made to stand apart from ordinary text. Here, said Mr Halford,  the words DIGITAL, SERVICE and METROPOLITAN function as ordinary English words and in normal phrase construction. 

In the main, however where the words DIGITAL METROPOLITAN SERVICE occur  in RS2, the individual words are capitalised, or bolded, or shown in upper case, or with the ä attached.  Mr Halford submitted very strongly that this amounted to no more than clothing of an non-distinctive mark with appearance of trade mark garb.  This strategy he said did not serve to overcome the objection that the term DIGITAL METROPOLITAN SERVICE  was generically descriptive and not fit for registration.  He referred me to the evidence from the Starkey and Burns declarations which asserts that DIGITAL is in common use,  and that the term DIGITAL METROPOLITAN SERVICES is entirely apt to describe an electronic data link network specifically built to serve a metropolitan area.  He claimed that, in relation to services of this application,  the separate words DIGITAL, METROPOLITAN and SERVICE are inherently non-distinctive. He also argued strongly that the term DIGITAL METROPOLITAN SERVICE is a completely natural descriptive phrase, that the use made by the applicants themselves is testament to this, and,  that like the individual words, the trade mark as a whole lacks any inherent distinctiveness.

Mr Halford went on to argue that, since  the trade mark is without inherent distinctiveness,  it should be refused registration in Part B even if there should be evidence of distinctiveness in fact (Burger King Corporation v Registrar of Trade Marks [1972-73] ALR 1361; the WHOPPER Case ). He submitted, however, that distinctiveness in fact has not been shown.

The applicant's submissions

Mr. Stevens argued first that the meaning the words DIGITAL METROPOLITAN SERVICE were neither well defined nor likely to be used by others in the normal course of trade.  In particular he said the word DIGITAL was  essentially a 'buzz' word, with an ill defined meaning, which few people outside of the expert field would understand or attach any real meaning to.  In support of this claim he first pointed to the many trade marks already on the Register  which contain the word; and he submitted that there were equally large numbers of registered business names built around the word DIGITAL. He held up these alleged facts as evidence that whatever the meaning originally ascribed to DIGITAL, it was now debased, and the word was no longer a useful descriptor.  Second he drew attention to the terms of the applicant's advertising which, I agree,  makes it plain that the applicant's service is suited to all sorts of small business operations.  Mr. Stevens argued that this clientele would lack qualifications  to understand the meaning of terms like DIGITAL. Small businesses he said, do not have the expert knowledge of Mr Starkey or Mr Burns whose opinion as to the meaning of DIGITAL is thus of little relevance.

Mr. Stevens further pointed me to comments in the Burns declaration where, at paragraph 5, Mr. Burns gives examples of names used by other businesses to denominate their network services.  He mentions Metrowave and Multi Data Centre Facility. Mr. Stevens advanced this information to show that terms other than DIGITAL METROPOLITAN SERVICE exist and are available to businesses in need of words to describe a data network.  He also pointed to the fact that the words DIGITAL and METROPOLITAN  were disclaimed, and referred me to the following directives from Lockhart J in  Armor All Products Corporation v CRC Chemicals Australia Pty Ltd (1993) AIPC 91-027 at 39,634 at 39,639:

.... where a word mark comprises two words.... it may be a distinctive mark when read as a whole even if each separate word when taken by itself is  merely descriptive

On these submissions, Mr. Stevens asked me to accept that the DIGITAL METROPOLITAN SERVICE is an "arbitrary coupling together" of words which in total fail to convey any apparent or clear meaning and, that as a whole, it is a mark which is capable of becoming distinctive.

Mr Stevens reminded me that the mark is accepted in Part B and the tests for Part B are less stringent that for Part A.  He said the applicant had adopted a mark which was not part of the descriptive vocabulary, that it then made serious and successful efforts to promote the term as a trade mark, and that the Broomhall,  Rothwell and supporting declarations, all testify to the applicant's success in this endeavour. 

Decision

I cannot agree with Mr. Stevens submissions that the words DIGITAL METROPOLITAN and SERVICE are not descriptive. Far from becoming meaningless, as Mr Stevens argues, DIGITAL has acquired significant currency in expression such as digital watches, digital recordings, digital data, digital equipment, digital technology etc.. I do not think that Mr Stevens is correct, moreover, in his assertion that the meaning of this word is only clear to technical experts.  I think that many people dealing with a computer are likely to understand the overall technical meaning of the word, and many small business operaters would be in this category.  I think that Mr. Halford's claim that the words are individually well known and in everyday use, is common knowledge which is supported by any modern dictionary. Furthermore, the claim is borne out by the applicant's own trade literature.

Again I cannot agree with Mr Stevens  that the term DIGITAL METROPOLITAN SERVICE is an arbitrary collocation of words which is not apt for normal description.  I agree with Mr Halford that in this format the words function as an ordinary English descriptive phrase.   I find moreover that the phrase DIGITAL METROPOLITAN SERVICE has a clear and unambiguous meaning and that it is an entirely apt description to associate with  digital network services built for metropolitan areas.  I agree with Mr. Halford that the words of this mark, and the mark itself should not be encumbered with any trade mark rights. They are part of the technical and descriptive working language for network services and accordingly both individually and as a term, are bereft of any inherent distinctiveness in relation to telecommunication services.  I find that the mark as a whole is not capable of becoming distinctive, and therefore, entry of disclaimers of any individual parts does not assist.

The fact that DIGITAL METROPOLITAN SERVICE is not the sole description available does not, of course, save the situation for the applicant.

Having decided that the mark is without  inherent distinctiveness, any facts of acquired distinctiveness  become irrelevant.  On this point Mr. Halford again cited the famous words of Justice Gibbs (as he then was) in the WHOPPER Case  (supra) and, said Mr Halford,  it is trite law that if there is no inherent distinctiveness in a mark, then evidence of factual distinctiveness will be to no avail. I agree with Mr Halford that this   indeed is one of the principal directives handed down by this authority and, moreover, that it exists as one of the cornerstones of the current legislation.  Therefore I will not proceed with an assessment of the applicant's use, other than to say, that were I to have found a minimum of distinctiveness, the extent of use demonstrated falls well short of what, in these circumstances, would have justified registration.

The onus is on the applicant to satisfy me that the trade mark DIGITAL METROPOLITAN SERVICE is capable of becoming distinctive of network services.   It has failed to do so and thus the opposition succeeds. I refuse registration of the mark in Part B.

In accordance with that finding, costs are awarded to the opponent.  They will be taxed and certified by an officer appointed by the Registrar for that purpose.

Helen R. Hardie

Assistant Registrar

16 February 1994