The Sunraysia Natural Beverage Co Pty Ltd v Ocean Spray Cranberries Inc

[1997] ATMO 55

Trade marks act 1955 and Trade Marks Act 1995

decision of a delegate of the registrar of trade marks with reasons

Opposition by OCEAN SPRAY CRANBERRIES, INC to Trade Mark Applications Nos 624575, 635163, 635164, 637611 and 646758 in the Name of THE SUNRAYSIA NATURAL BEVERAGE CO PTY LTD

On 10 September 1997 I conducted a hearing in Melbourne in relation to the following opposed trade marks:

Trade mark no	Trade mark	app/reg date	goods
624575	NOOK AND CRANNY	11/03/94	Fruit juice and all other goods in the Class (32)
635163	CRAVE THE WAVE	18/07/94	Fruit juice, non-alcoholic beverages in this class, tea in ready to drink form, and all other goods in this class (32)
635164	CRAVE THE CRAN	18/07/94	Fruit juice, non-alcoholic beverages in this class, tea in ready to drink form, and all other goods in this class (32)
637611	ITS AMAZING WHAT A LITTLE CRAN WILL DO	12/08/94	All goods in this Class (32)
646758	CRANNIES	25/11/94	Dried fruit, cooked and preserved fruit (29)

The opponent, Ocean Spray Cranberries, Inc, was represented by Mr Adrian Ryan of counsel, instructed by Blake Dawson Waldren, solicitors.  Mr Stephen Wilson of Griffith Hack, patent attorneys, appeared for the applicant, The Sunraysia Natural Beverage Company Pty Ltd.

All five applications were opposed on similar grounds.  In the case of 624575 and 635163 those grounds essentially are:

¨    the applicant is not the proprietor of the opposed mark within the meaning of s40 of the Act;

¨    the applicant has made a fraudulent misrepresentation in applying for registration of the opposed mark;

¨    the applicant has sought registration of a portfolio of marks of which it knew or ought to have known that the opponent was the proprietor;

¨    the applicant has no intention to use the mark in respect of all the goods specified in the application;

¨    registration of the mark would offend against the provisions of s28 of the Act;

¨    The application should be refused in the exercise of the Registrar’s discretion.

In the case of application 637611 there is an additional ground:

¨    the trade mark is not distinctive of the applicant’s goods nor capable of becoming distinctive in terms of ss24 and 25 of the Act;

With 646758 the ground of lack of proprietorship is not alleged.

Although the Trade Marks Act 1995 commenced on 1 January 1996, as provided in the transitional provisions of Part 22 of that Act the provisions of the repealed Trade Marks Act 1955 continue to govern the oppositions to applications 624575, 635163, 637611 and 646758.  The provisions of the Trade Marks Act 1995 govern the opposition to 635164.  Accordingly the grounds of opposition in the case of that application rely on s27 instead of s40 and ss42 and 43 instead of s28.  Otherwise the grounds of opposition are the same as those for 624575 and 635163.

At the hearing Mr Ryan essentially relied on three grounds of opposition: the applicant’s lack of intention to use the marks, the applicant’s lack of proprietorship of the marks and the likelihood of deception and confusion which would be caused if the applicant did use the marks.  I will deal with each of those grounds in turn.

Intention to use

Mr Ryan argued that the timing of the applications, the fact that the applicant had applied for a whole portfolio of marks and the use overseas by the opponent of at least some of the marks created an inference that the applicant had no genuine intention to use the marks but was attempting to place obstacles in the path of the opponent in its efforts to sell its goods in Australia.  He also pointed to the incongruity of some of the marks with the applicant’s business, particularly the mark CRAVE THE WAVE which was a play on the opponent’s trade mark which includes a stylised device of a wave.  He referred also to the script of a television advertisement exhibited to the declaration of Dan Presser, a director of the applicant company, dated 2 October 1995 featuring the following exchange:

ruby:  Hide, Hide, the Americans are coming

DAN:  What’s the matter Ma?

RUBY:  The Americans are coming to try to challenge the amazing quality taste   of Sunraysia Cranberry Juice.

Mr Ryan submitted that that was directed at the opponent company and was virtually an admission by the applicant that the applications were an attempt to “pilfer” the opponent’s portfolio of trade marks.  He referred to In the Matter of Ducker's Trade Mark 45 RPC 397:

"I agree that the goods need not be in being at the moment, and that there is futurity indicated in the definition; but the mark is to be a mark which is to be definitely used or in respect of which there is a resolve to use it in the immediate future upon or in connection with goods.  I think that the words "proposed to be used" mean a real intention to use, not a mere problematical intention, not an uncertain or indeterminate possibility, but a resolve or settled purpose which has been reached at the time when the mark is to be registered."

Mr Ryan argued that the applicant was not the proprietor of the trade mark because it had no genuine intention to use the trade marks.

The onus of proving lack of intention to use a trade mark rests on the opponent: per Fullagar J. in Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 401:

There is another element mentioned by Dixon J in the Shell Co's Case*, which is stated as essential to the proprietorship of an unused trade mark.  That element is the intention of the applicant for registration to use it upon or in connexion with goods.  As to this I need only say that I do not regard his Honour 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.  I cannot think that the Registrar is called upon to institute an inquiry as to the intention of any applicant, and I think that, on an opposition or on a motion to expunge, the burden must rest on the opponent, or the person aggrieved, of proving the absence of intention. Again, I do not think that "intention" in this connexion ought to be regarded as meaning an intention to use immediately or within any limited time. A manufacturer of (say) confectionery would, I should suppose, be entitled to register three trade marks in relation to confectionery, though he intended only to use two of them and had not made up his mind as to which two he would use. If he in fact does not use any of them for the period specified in s 72, the mark or marks may be expunged under that section. On the other hand, a manufacturer of confectionery, who had no intention of ever manufacturing motor cars, might be held disentitled to register a mark in relation to motor cars: the effect of In re Registered Trade Marks of John Batt & Co.+, is I think, correctly stated in the first paragraph of the headnote to the report of the case before Romer J and the Court of Appeal. (Emphasis added)

* (1949) 78 CLR 627

+ (1898) 2 Ch 432; 1899 AC 428

(The statement referred to from Batt's case reads: "A Trade Mark cannot properly be registered for goods in which the Applicant does not deal or intend to deal.")

The evidence clearly shows that the applicant does indeed trade in the goods concerned and in the absence of convincing proof that it does not intend to use the marks applied for in connection with those goods this ground of opposition is not made out.

Proprietorship

The basis of a claim to proprietorship of a trade mark was explained by McGarvie J in Settef v Riv-Oland Marble 10 IPR 402 at 413:

Acquiring proprietorship

At common law (which in the present context is treated as including the principles of equity), property in a trade mark could only be acquired by public use of the mark as a trade mark.  The right of the proprietor of a trade mark was to prevent its use as a trade mark by other persons.  The original remedy for the protection of this right was an injunction to restrain infringement.  Principles as to the way in which the discretion should be exercised to protect a trade mark by injunction were settled by the Court of Chancery.  The cases which settled these principles established the types of trade marks in which a person would be recognised as having a right of property which would be protected by injunction: G E Trade Mark [1973] RPC 297 at 324‑7 per Lord Diplock.

The basic common law principle is that the first person who uses a trade mark of an appropriate type within a country becomes the proprietor of the mark there: Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corp Ltd (1951) 82 CLR 199 at 203; Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd (1974) 131 CLR 592 at 603; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) 59 ALJR 77 at 83. A person who becomes proprietor of a trade mark in this way is entitled at common law to restrain a person who later commences to use the trade mark.

...

In considering who, within s.40(1) of the Act, was at the time of Settef's application for registration the proprietor of the trade mark, one considers who at common law was the proprietor in Australia: The Shell Co of Australia Ltd v Rohm & Haas (1949) 78 CLR 601 at 625 and 627. Settef claims to be the first person to have used the trade mark in Australia and therefore to have been proprietor at common law in Australia.

Use of the trade mark by Settef overseas gave it no right to proprietorship in Australia.  Any use at all in Australia gave it that proprietorship: the Thunderbird case (1974) 131 CLR 592 at 600.

The fact that a manufacturer is proprietor of a trade mark overseas and has earlier used it overseas does give it a forensic advantage in a contest between it and an Australian distributor who claims proprietorship of the trade mark.  There is authority that a court will regard slight use in Australia by the overseas proprietor as sufficient to give it proprietorship of the trade mark in Australia: The Seven Up Co v O T Ltd (1947) 75 CLR 203 at 211; Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 400; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) 59 ALJR 77 at 83."

The right to claim proprietorship of a mark within the meaning of s.40(1) therefore depends on first use of the mark in Australia.  The meaning of the word "use" in the Act (and there is no relevant difference between the concept of use at common law and that used in the Act) is to be understood in the context of the definition of "trade mark" in s.6(1) of the Act: W D & H O Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182 at 191; Estex Clothing Manufacturers Pty Ltd v Ellis & Goldstein Ltd (1967) 116 CLR 254 at 271. That definition is as follows:

trade mark means ‑

(a)except in relation to Part XI, a mark used or proposed to be used in relation to goods or services for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods or services and a person who has the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person ; ...

The word "use" itself is defined in s.6(2) as follows:

(2)In this Act ‑

(a)references to the use of a mark shall be construed as references to the use of a printed or other visual representation of the mark; and

(b)references to the use of a mark in relation to goods shall be construed as references to the use of the mark upon, or in physical or other relation to, goods.

It is essential therefore that the use relied on by a person claiming proprietorship of a mark be use for the purpose of indicating or so as to indicate a connection in the course of trade between the relevant goods and that person.  As to the use of the mark by an overseas manufacturer exporting goods to Australia Windeyer J. observed in the Estex case (supra) at 271:

"When an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer."

What constitutes a connection in the course of trade for establishing prior use of a mark in Australia was discussed by the High Court in Moorgate Tobacco v Philip Morris 3 IPR 545 at 557:

To establish prior use of the mark in Australia, Moorgate relies upon evidence that, during or in connection with discussions between Loew's and Philip Morris about the introduction of the low tar and nicotine cigarette in Australia, packets of cigarettes and associated advertising material displaying the name "KENT GOLDEN LIGHTS" were handed personally, or in one instance sent by mail, to representatives of Philip Morris in Australia.  That evidence indicates that there were at least three occasions on which such cigarette packets and advertising material were so delivered.  At the times when those items were so delivered, there was no intention on the part of Loew's that it would itself trade in the goods in Australia.  Nor, for that matter, had it been decided what name would be used if Philip Morris were, under licence from Loew's, to commence to manufacture and market the goods in Australia at some indefinite future time.

The court was referred to a large number of cases and to some administrative decisions in which consideration has been given to what constitutes a use or user of a trade mark for the purposes of the statutory notion of proprietorship of the mark before registration.  The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark.  It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark (Re Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corporation Ltd, supra, at 204‑5) or that the mark has been used in an advertisement of the goods in the course of trade (Shell Co of Australia v Esso Standard Oil (Australia) Ltd, supra, at 422).  In such cases, however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade.  In the present case, there was not, at any relevant time, any actual trade or offer to trade in goods bearing the mark in Australia or any existing intention to offer or supply such goods in trade.  There was no local use of the mark as a trade mark at all; there were merely preliminary discussions and negotiations about whether the mark would be so used.  The cigarette packets and associated advertising were delivered to Philip Morris to demonstrate what Loew's was marketing in other countries and what Philip Morris might market, under licence from Loew's, if it decided to manufacture and trade in the goods in Australia and to use the mark locally at some future time.  There was no relevant trade in the goods in Australia and the delivery of the cigarette packets and associated material to Philip Morris did not, in the circumstances, constitute a relevant user or use in Australia of the mark "KENT GOLDEN LIGHTS" for the purpose of indicating or so as to indicate a connection in the course of trade between the new cigarettes and Loew's." (Emphasis added)

In order to establish use in the relevant sense then it must be possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade.  In the Moorgate case the Court found that there had been no actual trade or offer to trade in goods bearing the mark in Australia or any existing intention to offer or supply such goods in trade.  There was no local use of the mark as a trade mark at all; there were merely preliminary discussions and negotiations about whether the mark would be so used.  Likewise, in W.D. & H.O. Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182 cigarettes under the relevant trade mark were available in America. An Australian company having some association with the American manufacturer transmitted orders from Americans living in Australia to the American company. The cigarettes were purchased and paid for in the United States-i.e. no money was sent from Australia. They were then sent direct to the purchasers in Australia. The Australian company took no part in the importation but received a commission. The cigarettes were labelled as having been made in the United States for the Australian Company. The High Court held that there was no use of the trade mark in Australia because all "trade" in the goods took place in the United States. Trading ended once goods were purchased or otherwise acquired for consumption. On the other hand in the Thunderbird case (1974) 131 CLR 592 the importation of one unit as a prototype for the purpose of building and selling the goods in Australia was held to be use in Australia by the exporter. The Australian manufacturer who received the unit was not entitled to register the trade mark. Also, in Blackadder v The Good Roads Machinery Co. (1926) CLR 332 an Australian company imported machinery from the United States bearing the American exporter's trade mark. The Australian company removed the exporter's trade mark and put its own trade mark on the goods before sale. Although purchasers never saw the exporter's trade mark, the exporter was held to have used it in Australia.

In the absence of fraud it is not unlawful for a trader to become registered proprietor of a trade mark which has been used, however extensively, by another trader as a trade mark for similar goods in a foreign country, provided there has been no use of the foreign trade mark in Australia at the date of application for registration: per Williams J. in The Seven Up case.

Regardless of use, the right to register a foreign mark is restricted to those who cannot be said to owe any duty to the proprietor of the foreign trade mark.  Thus the trade mark of a foreign company may not properly be registered in Australia by its agent or by an Australian importer of its goods or by an employee of the importer.  Any such registration will be invalid even if the agent is honestly registering to protect the principal, or if the goods have never been sold in Australia bearing the trade mark (the "Certina" case (1970) 44 ALJR 191, also Blackadder v Good Roads (supra).

In the present case there is no evidence of any trade or offer to trade in the goods under the trade marks in suit in Australia by the opponent.  Nor is there any evidence of any relationship, fiduciary or otherwise, between the applicant and opponent.  Nor, in accordance with the Seven-Up case, above, was it an illicit misappropriation by the applicant to adopt the marks for use in Australia.

For all of the above reasons I find that the opponent has failed to displace the applicant’s claim to proprietorship based on authorship of the mark, the intention to use it in relation to the goods and the lodgment of the application for registration as per Fullagar J in Aston v Harlee (supra) as follows, at 398-399:

Section 28

In the case of s28(a) the onus is on the opponent once again to show that its reputation in the mark is such that the use of it by the applicant would lead to the deception or confusion of a substantial number of persons: Smith Hayden’s Application (1946) 63 RPC 97. The applicable principles are as set out by Kitto J in Southern Cross Refrigerating Company v Toowoomba Foundry Pty Limited (1954) 91 CLR 592 at 594-5:

a)    in all applications for registration of a trade mark the onus is on the applicant to satisfy the Registrar (or the Court) that there is no reasonable probability of confusion;

b)   it is not necessary in order to find that a trade mark offends against the section, to prove that there is an actual possibility of deception leading to a passing off.  While a mere possibility of confusion is not enough - for there must be a real, tangible danger of its occurring ... it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source.  It is enough if the ordinary person entertains a reasonable doubt;

c)    in considering the possibility of deception, all the surrounding circumstances have to be taken into consideration.  (This includes the circumstances in which the goods will be bought and sold, and the character of the probable purchasers of the goods);

d)   in applications for registration, the rights of the parties are to be determined as at the date of the application;

e)    the onus must be discharged by the applicant in respect of all goods coming within the specification in the application ... and not only in respect of those goods on which the applicant is proposing to use the mark immediately.  And the onus is not discharged by proof only that a particular method of user will not give rise to confusion.  The test is, what can the applicant do if it obtains registration?

Although, in accordance with the principles of the Southern Cross case, above, the onus is on the applicant to show that there is no likelihood of confusion or deception, there is an evidentiary onus on the opponent in the first instance to establish the extent of its reputation in Australia.  As the matter was put by Heery J in the recent decision in Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (Federal Court, unreported, 11 July 1997):

With one major exception, the legal principles applicable to this case are not in dispute. They may be summarised as follows:

(i) The opponent bears the initial onus of establishing a reputation in its mark sufficient to found an objection under s 28: Arthur Fairest Limited's Application (1951) 68 RPC 197. (ii) However, once this onus is discharged the burden shifts to the party seeking registration: Eno v Dunn (1890) 15 App Cas 252 at 261, Jafferjee v Scarlett at 119. (iii) The rights of the parties are to be determined as at the date of application for registration (here 27 July 1989): Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 594. (iv) The onus is on the party seeking registration to satisfy the Court that there is no reasonable possibility of deception or confusion: Southern Cross at 594-5. (v) In order to defeat the application for registration it is not necessary for the opponent to establish that there is an actual probability of deception which will amount to a passing-off. While a mere possibility of confusion is not enough - for there must be a real, tangible danger of it occurring - it is sufficient that the result of the user of the mark will be that a substantial number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough that the ordinary person entertains a reasonable doubt: Southern Cross at 594-5, 608, The Kendall Co v Mulsyn Paint & Chemicals (1963) 109 CLR 300 at 305. (vi) In considering the issue of deception all the surrounding circumstances must be taken into consideration. The factors to be considered include the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold and the character of the probable purchaser of the goods: Jafferjee v Scarlett at 120; (vii) A probability of confusion, if it is real, is sufficient even though the confusion may be unlikely to persist up to the point of, and be a factor in, inducing actual sales: Southern Cross at 495. There may be confusion or deception in the minds of persons to whom the mark is addressed, even if actual purchasers will not ultimately be deceived: Re Hack's Application (1940) 58 RPC 9 at 103-104. (viii) It is not enough for the party seeking registration to negative the likelihood of confusion in relation to the actual trade carried on by the opponent at the time of the registration and to the manner in which the latter then uses his mark. The applicant must also take into account all legitimate uses which the opponent may reasonably make of his mark within the ambit Reckitt & Colman (Australia) Ltd v Boden (1945) 70 CLR 84 at 94, Southern Cross at 608. (ix) 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-operative Ltd v New South Wales Dairy Corporation (1990) 24 FCR 370 at 377.

Mr Ryan, however, while conceding that there had been no use of the marks by the opponent in Australia relied on Anheuser-Busch Inc v Castlebrae Pty Ltd 21 IPR 54. At 57-8 His Honour said:

In registering and exploiting the marks, Mr Hull may have had in mind the principle of law which was affirmed by the High Court of Australia in The Seven Up Co v OT Ltid (1947) 75 CLR 203. When the Seven Up Company, a corporation incorporated under the laws of the State of Missouri, applied to register a trade mark, its mark 7UP, the Registrar of Trade Marks cited against the application a prior registration of the trade mark 8UP of which OT Ltd of Prahran, Victoria was the registered proprietor. At first instance, Williams J stated at 211: "In my opinion, the effect of these cases is that in the absence of fraud, it is not unlawful for a trader to become a registered proprietor under the Trade Marks Act of a mark which has been used, however extensively, by another trader as a mark for similar goods in a foreign country, provided the foreign mark has not been used at all in Australia at the date of the application for registration. But the position is different if at that date the mark has become identified with the goods of the foreign trader in Australia because those goods have been brought into Australia by the foreign trader himself or by some importer or in some other manner. The court frowns upon any attempt by one trader to appropriate the mark of another trader, although that trader is a foreign trader and the mark has only been used by him in a foreign country. It therefore seizes upon a very small amount of use of the foreign mark in Australia to hold that it has become identified with and distinctive of the goods of the foreign trader in Australia."

His Honour held, at 211, that: "The mark 7UP had never been used on the goods of the applicant in Australia and had never become associated in the minds of the Australian public with its goods at that date."

On appeal, his Honour's decision was upheld by Latham CJ, Rich and Starke JJ.  At 216, Latham CJ said: "The desire to use in Australia a successful trade mark in competition in trade with a person who may come here and who uses that trade mark in another country cannot be described as fraud or as involving any breach of the law."

Similarly, in WG & HO Wills (Australia) Ltd v Rothmans Ltd (1956) 94 CLR 182, it was held that the trade mark PALL MALL should be struck from the register pursuant to s 72 of the Trade Marks Act 1905 (Cth), which provided for the rectification of the register where there had been no bona fide use of a trade mark for a consecutive period of 3 years since the date of the last registration thereof. It was held that the whole trading in Pall Mall cigarettes, which had been sent to Australia during the relevant period, had taken place in the United States of America, that it was only there that the trade mark had been used for the purposes of trade.

However, factual circumstances do not stand still.  Since those cases were determined, there have been some developments of fact which necessarily have influenced the knowledge and perception of the Australian public with respect to trade marks and therefore, the effect which overseas marks may have in Australia.

Thus, there has been a great increase in the travel both of Australian citizens to other countries and of the citizens and residents of other countries to Australia.  And the media, particularly television through satellite transmission, has become increasingly international.  Magazines and newspapers, particularly magazines from the United States of America, have a worldwide circulation.  Moreover, there has been an increasing public awareness of the existence and commercial significance of character merchandising.  Thus, in Hogan v Pacific Dunlop Ltd (1988) 83 ALR 403; 12 IPR 225, Gummow J said at 412: "The concept of a common law trade mark as a distinctive badge applied to goods has undergone much development in recent times, partly as a consequence of such changes in marketing techniques: Cadbury Schweppes Pty Ltd v Pub Squash Co Ltd [19811 RPC 429 at 490."

However, His Honour went on to refer to the evidence of the reputation of the mark in Australia.  In the present case the opponent has failed to discharge the initial onus on it of establishing  a reputation sufficient to ground an objection under s28, or in the case of 635164, under s60 of the 1995 Act.

Conclusion

I have found against the opponent on the issues of proprietorship, of intention to use and the likelihood of deception or confusion.  I have been shown no reason why I should exercise the discretion of the Registrar to refuse registration of any of the trade marks applied for.  I therefore dismiss the opposition and direct that the trade marks are to be registered subject to the opponent’s right of appeal against this decision.

Michael Homann
Hearing Officer

26 September 1997