Time Warner Entertainment Company, LP v Stepsam Investments Pty Ltd
[2002] ATMO 93
•21 October 2002
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Time Warner Entertainment Company, LP to registration of trade mark application 755905(25) - HARRY POTTER - filed in the name of Stepsam Investments Pty Ltd.
Date of Decision: | 21 October 2002 |
Delegate: | Hearing Officer Geoff Purvis-Smith |
Representation: | Opponent - Ms Julia Baird instructed by Chrysiliou Law Applicant - Mr Stephen Burley instructed by Spruson & Ferguson |
Decision: | s.41 ground dismissed pursuant to s.41(5) ss.42, 43, 59 and 62 grounds dismissed Opponent to pay the Applicant's costs |
Background
On 26 February 1998, Stepsam Investments Pty Ltd (Stepsam), of Warriewood in New South Wales, applied for registration of the following trade mark in class 25 for clothing and accessories:
Following amendment of the goods to delete "accessories", the mark was accepted pursuant to s.41(5) of the Trade Marks Act 1995, and advertised in the Official Journal of Trade Marks on 2 December 1999. Following the granting of an extension of time, Time Warner Entertainment Company, LP (Time Warner) lodged a Notice of Opposition on 2 June 2000.
The matter eventually came on for hearing before me as a Delegate of the Registrar of Trade Marks. Stepsam was represented by Mr Stephen Burley of counsel, instructed by Spruson and Ferguson. Time Warner were represented by Ms Julia Baird of counsel, instructed by Chrysiliou Law. The hearing was conducted in Sydney on 24 July 2002.
Evidence
The following evidence was filed during the course of the proceedings:
| Name | Date | Exhibits | Referred to as |
| Evidence in Support | |||
| Kerry Chrysiliou | 31.08.00 | Nil | KC1 |
| Andros Chrysiliou | 31.08.00 | Nil | AC |
| Evidence in Answer | |||
| Les Jack Farah | 14.11.01 | LJF-1 - LJF-3 | LJF |
| Evidence in Reply | |||
| Kerry Chrysiliou | 14.03.02 | Nil | KC2 |
| Helen Thompson | 12.03.02 | HT1 | HT |
Shortly stated, the declarations of Mr and Ms Chrysiliou set out their experiences with stores of the applicant. Specifically, they set out the types of clothes they have seen in applicant's stores, and the manner in which the words HARRY POTTER have been used in the stores. Mr Chrysiliou's evidence is that the words HARRY POTTER are not used in signage in or around the store but rather, only as clothing labels on women's clothing sold exclusively in the applicant's Wombat stores. Ms Chrysiliou's evidence, comprised in her second declaration dated 13 March 2002, extends to opinion evidence of how the applicant has and may use the trade mark HARRY POTTER in the future. In particular, Ms Chrysiliou opines that the clothes to which the trade mark has been applied are limited to the mature or larger sized ladies market, as opposed to the young female market.
Mr Farah sets out the history and retail activities of Stepsam, as well as its relationship with Wombat Enterprises Pty Ltd (Wombat), and Wombat's authorised use of Stepsam's HARRY POTTER trade mark in respect of clothing since at least 1994. Mr Farah also provides information as to the extent of sales and promotion of products carrying the HARRY POTTER trade mark in the period 1994 through 2000. Specifically, Mr Farah states that Wombat stores sell only HARRY POTTER labeled clothing. Finally, Mr Farah also refers to a declaration which he provided to the Trade Marks Office during the examination process.
Ms Thompson is the General Manager of Warner Bros. Consumer Products Australia Pty Limited. On the strength of her work experience, Ms Thompson is held out by the opponent to be well qualified to give evidence of image and product development and licensing activities in the clothing market, the subcategories of clothing encompassed by class 25, the behaviour of clothing traders and the positioning and "fit" of the Wombat boutiques and the applicant's use and likely use of the expression HARRY POTTER as a trade mark. However, I note that there is nothing in Ms Thompson's declaration that indicates that she has any experience in the retailing of fashion wear, as opposed to the licensing and retailing of character and sporting merchandise. In any event, Ms Thompson expresses her opinion on the types of goods that might be sold through Wombat stores and the extent to which the applicant's goods might be identified as Wombat clothing, rather than HARRY POTTER clothing.
Grounds and Findings
Warner relies on ss.41, 42, 43, 59 and 62 of the Act to oppose the application. I will deal with each ground in turn.
Section 41
Section 41 provides:
Trade mark not distinguishing applicant’s goods or services
(1)For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.
Note 1:For applicant and predecessor in title see section 6.
Note 2:If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).
(2)An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.
Note:For goods of a person and services of a person see section 6.
(3)In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.
(4)Then, if the Registrar is still unable to decide the question, the following provisions apply.
(5)If the Registrar finds 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 is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:
(a)the Registrar is to consider whether, because of the combined effect of the following:
(i)the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii)the use, or intended use, of the trade mark by the applicant;
(iii)any other circumstances;
the trade mark does or will distinguish the designated goods or services as being those of the applicant; and
(b)if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and
(c)if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.
Note 1:For goods of a person and services of a person see section 6.
Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).
(6)If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:
(a)if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
(b)in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.
Note 1:Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:
(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or
(b) the time of production of goods or of the rendering of services.
Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).
Warner alleges that the trade mark is not capable of distinguishing the applicant's goods from those of other persons in that it is likely that other traders will want, without improper motive, to use the expression HARRY POTTER in relation to their goods. In the circumstances, Warner alleges, the names HARRY and POTTER are so common, and the range of goods sought to be registered is so broad, that s.41(2) is incapable of being satisfied.
Where s.41(2) cannot be satisfied, the Registrar is then required to take into account the provisions of ss.41(3)-(6). In the present case, the provisions of s.41(5) were applied at the examination stage. The applicant now says that this was unnecessary - the trade mark can stand on its own, without recourse to s.41(5). The opponent asserts that the there is insufficient evidence of:
(a)extent of use (by time, area, range of goods, market share);
(b)manner of use; or
(c)any other circumstances
which would satisfy the requirements of s.41(5).
I am satisfied that the names HARRY and POTTER are common in Australian society. When used together, they are less common, but still not unusual or rare. Similarly, it is not unusual for clothing manufacturers or designers to apply their names to their clothes. On its face, the combination does not contain any reference to the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic of the goods. Taking the commonness of the name into account, and the practice of designers or manufacturers to use their own name, I am satisfied that there is a reasonable likelihood that other traders will legitimately wish to use the expression HARRY POTTER in relation to clothing. Accordingly, I am satisfied that the trade mark does not have the requisite degree of inherent distinctiveness to mean that s.41(3) can be satisfied.
Following the decision of Justice Branson in Oregon[1], I must now determine whether the provisions of ss.41(5) or (6) should be applied. At the examination stage, the examiner found that the requirements of s.41(5) had been made out on the basis of the breadth of past use of the trademark. Specifically, Mr Farah, in his declaration of 15 September 1999, stated that
[1] Blount v Registrar of Trade Marks (1998) 40 IPR 498
Stepsam had first started using the trade mark HARRY POTTER on clothing since 1994;
the use in Australia had been continuous since 1994;
sales of products under the trade mark had risen steadily since 1994 to amount to over $7 million in the twelve months prior to the application being filed and to over $14.5 million per annum by the time the declaration was sworn; and
promotional expenditure for products sold under the trade mark had peaked in the twelve month period prior to the application at more than $25,000.
On the basis of this information, the trade mark was accepted and the provisions of s.41(5) were applied.
The opponent now contests the accuracy of Mr Farah's earlier declaration. In his declaration of 14 November 2001, filed as evidence in answer in the opposition proceedings, Mr Farah clarified the extent and method of use of the applied for trade mark. While the original statutory declaration indicated that the trade mark had been used upon products "in Australia", the second declaration limits the use to Queensland, New South Wales, the ACT and Victoria, and lists a total of 42 outlets as at 8 February 2001. I am satisfied that this use is broad enough to satisfy the requirements of s.41(5), notwithstanding that the use is not Australia-wide.
The opponent also contests the extent and manner of use of the trade mark in relation to the goods to which the trade mark has been applied. Specifically, the opponent points to the fact that the trade mark appears to have been used only on women's clothing. In Clark Equipment[2], Kitto J talked of other traders wanting to use a word in connection with similar goods. I am satisfied that the provisions of s.41(5) were appropriately applied to allow the registration for class 25: clothing, without limitation. The situation does not change with the new evidence which shows the limited use.
[2] Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 514
Accordingly, I am satisfied that the requirements of s.41(5) have been made out. This ground of opposition is dismissed.
Section 42
There is no doubt, following the decision of Madgwick J in Advantage Rent-A-Car[3], that the Registrar is obliged, when assessing whether use would be contrary to law under s.42(b), to take into account the operation of laws and legislation other than the Trade Marks Act 1995. In the present case, the opponent submits that the use of the trade mark HARRY POTTER would amount to a contravention of s.52 of the Trade Practices Act 1974. Section 52 provides that a corporation shall not engage in misleading or deceptive conduct or conduct that is likely to mislead or deceive.
[3] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683
In Advantage Rent-A-Car, Justice Madgwick confirmed that the test to be satisfied was that use would, rather than could, be contrary to law. Therefore, I am to determine, on the balance of probabilities, and on the basis of a hypothetical case which takes into account all the evidence and submissions before me, whether use of the trade mark HARRY POTTER on clothing would cause, or be likely to cause consumers to be misled or deceived. The relevant standard to be applied is that there must be a "real or not remote chance or possibility" of a reasonably significant number of people being misled or deceived.[4]
[4] See for instance Equity Access Pty Limited v Westpac Banking Corporation (1989) 16 IPR 431
There is no evidence before me of consumers having been actually misled or deceived. While this is not fatal to the ground, it is still a relevant consideration in terms of assessing the risk. While I am required to take into account the reputation of the party who claims that s.52 will be breached, this does not mean that I am unable to take into account the reputation of the alleged infringer at the relevant time and circumstances. It may be that the alleged infringer has an even higher reputation in the particular goods in question. The reputation that HARRY POTTER has as a trade mark for entertainment products does not necessarily displace the reputation that HARRY POTTER has in relation to the applicant's clothes or the clothing trade. I believe, on the evidence, that HARRY POTTER for clothing is likely to have had its own, distinct reputation, from at least 1995. Sales of $3 million in 1994 for relatively inexpensive items must mean that a large number of garments were sold, and that at least some reputation was developing. It may well be said by the opponent that the applicant has provided no evidence of its reputation. A similar criticism could, with respect, be levelled in relation to the opponent's case. The only evidence that it provides are declarations by its legal representatives and its own employee - none of which are supported by independent quantitative or qualitative evidence. I am not satisfied that this is sufficient for a s.52 case.
In light of the competing reputations, I am not satisfied that a s.52 case could, let alone would, be made out. This ground is dismissed.
Section 43
Section 43 provides that registration may be refused if, because of some connotation that the trade mark (or a constituent part of the trade mark) has, the use of the trade mark is likely to deceive or cause confusion.
T.G.I. Friday's Australia Pty Limited v TGI Friday's Inc. [2000] FCA 720, confirms that the connotation must be in the mark itself, and cannot be determined as the result of external considerations, such as reputation.
The standard to be applied when testing for deception or confusion was set down by French J in Registrar of Trade Marks v Woolworths (1999) AIPC 91-499 at 39,695 (paragraph 43). In considering the phrase "likely to deceive or cause confusion", his Honour said:
The use of the word 'likely' in this context does not import a requirement that it be more probable than not that the mark has that effect. The probability of deception or confusion must be finite and non-trivial. There must be a 'real tangible danger of it occurring'.
The Trade Marks Office Manual of Practice and Procedure Part 29 Paragraph 4 states:
If the inclusion of the name or representation is likely to lead the ordinary buying public to the conclusion that the person whose name or representation appears in the trademark, has endorsed the product or services in some way, then a ground for rejection exists unless the applicant has permission to use the name or representation in the trade mark upon the product or in relation to the services specified in the application.
In George Schmidt v Down to Earth (Victoria) Co-Operative Society Limited[5], Hearing Officer Forno found that deception or confusion might arise by virtue of an implied endorsement or licence of services by a person or organisation. In Twentieth Century Fox Film Corporation v Durkan[6], Deputy Registrar Hardie confirmed that it is not necessary for the purposes of s.43 for there to be a competing trade mark in the name of the opponent or at all.
[5] 41 IPR 632
[6] 47 IPR 651
In the present case, the opponent asserts the evidence establishes that the name HARRY POTTER has acquired among a considerable proportion of the public a secondary implied or associated meaning. That secondary or implied meaning connotes the "Harry Potter" children's books and subsequent entertainment products. As such, use of the trade mark in relation to clothing other than mature/larger ladies fashion outerwear which the applicant has been selling in their Wombat stores, will be likely to deceive or cause confusion.
In the present case, there is no evidence before me of the extent to which the trade mark HARRY POTTER is connected, in the minds of consumers, to the opponent or indeed the "Harry Potter" entertainment products. What is before me is an indication that, to December 2001, four million copies of "Harry Potter" books had been sold in Australia. However, from the evidence, I do not know whether these had been sold in one year or over 10 years. Similarly, while Ms Thompson provides evidence of the value of ticket and retail merchandise sales and some evidence of promotional and advertising activity, there is no indication of when this occurred. The only dated material is a single article from a New Idea magazine dated March 17 2001 which mentions that talks of the "eagerly awaited Harry Potter movie". No indication is given in the article of the proposed release date of the movie. Certainly, there is no information which assists me in determining the extent of the public's knowledge of "Harry Potter" entertainment products as at the date of application. On the other hand, the applicant has provided sales and advertising figures for the relevant period. In the circumstances, I do not believe that the opponent has met its onus - either in relation to establishing the secondary implied or associated meaning in the minds of the public, or that this would be more powerful than that which the applicant might have achieved through its prior use. I might also add that I have not been taken to any authority which would suggest that a trader's rights to a trade mark can be usurped by a later, more well known trader or trade mark.
This ground of opposition must therefore fail.
Section 59
I am satisfied on the basis of Mr Farah's declaration, and the decision in Aston v Harlee Manufacturing Company[7], that the applicant did have an intention to use the trade mark at the date of application. I am also satisfied that the intention is a continuing one. I do not believe that the applicant's past practice of limiting the range of products to which the trade mark has been applied is evidence that there is no intention of extending the range to encompass further products in class 25.
[7] (1960) 103 CLR 391 at 491
This ground is therefore dismissed.
Section 62
Section 62 provides that registration may be opposed on the basis that the application was accepted on the basis of evidence or representations that were false in material particulars.
Time Warner alleges, on the strength of material on the Trade Marks Office file, that the application was accepted on the basis that Mr Farah's evidence at the examination stage gave the impression that the trade marks had been used throughout Australia and on a wide range of clothing in class 25. Use in this way justified the application of s.41(5) of the Act. However, as the result of Mr Farah's evidence filed during the opposition proceedings, it is now clear that the use has not been throughout the whole of Australia, and the trade mark has been used in relation to a select range of mature/larger ladies fashion outerwear sold though a specific retail chain.
Firstly, I note that this material, although relied on at the hearing, was never lodged or served as evidence. Accordingly, it is not strictly admissible. However, I propose to deal with the issue as Time Warner has called into question the veracity of the applicant, and the appropriateness of the Trade Marks Office's original decision.
While it may be true that the examination proceeded on two erroneous presumptions, I do not believe that these are fatal to the present application. Nor do I believe that they were the result of any misleading actions by the applicant. Mr Farah's exact words at the examination stage were relevantly:
3. I say that the Trade Mark was first used by my Company in Australia upon clothing (such products being hereinafter referred to as the "Products") in 1994 and my company has continuously used the Trade Mark upon such products in Australia since such date.
These statements, while imprecise in some ways, are not false. I see nothing which indicates that they were intended to give a false impression. Nor am I satisfied that, even had the true position been made clear to the examination section, s.41(5) would not have been applied in the same way. I am satisfied that, when one takes into account the value of retail sales and the length of time the goods have been sold, use in 42 clothing boutiques along the Eastern Seaboard, and use on goods within class 25 is sufficient to satisfy the requirements of s.41(5).
As such, I am not satisfied that the requirements of s.62 are made out. This ground is therefore dismissed.
Conclusion and costs
I have found that none of the grounds of opposition have been made out. The opposition is therefore dismissed. Subject to the expiry of one month from the date of this decision and the payment of any outstanding fees, the application may proceed to registration.
The applicant has sought its costs. I direct that the opponent meet the applicant's costs in accordance with Schedule 8 of the Trade Marks Regulations 1995.
Geoffrey Purvis-Smith
Hearing Officer
Trade Marks Hearings
21 October 2002
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