Toyota Jidosha Kabushiki Kaisha

[2001] ATMO 50

TRADE MARKS ACT 1995

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

Re:Trade mark application number 828189(12) - LS430- in the name of Toyota Jidosha Kabushiki Kaisha.

Background

Trade mark application number 828189 was filed on 16 March 2000 by Toyota Jidosha Kabushiki Kaisha (the applicant). The application was for the words LS430 in respect of motor cars and parts thereof in class 12.

The application was examined in terms of section 41 of the Trade Marks Act 1995 (the Act). Two reports issued during the course of examination. In both, the examiner held the trade mark lacked sufficient inherent adaptation to distinguish the goods specified. The examiner considered the trade mark was one which traders, and certainly car traders, would need to use as a product, model, or catalogue code. The applicant was invited to file evidence in terms of s.41(5) of the Act, and advised that it would need persuasive evidence to satisfy the requirements of that subsection.

In response to the invitation the applicant, through its attorney, submitted that the examiner was wrong to conclude that the applicant's mark lacked capacity to distinguish without providing evidence of the likelihood of other traders legitimately requiring to use LS430 as a trade mark in connection with motor cars and parts.

The applicant argued that without such evidence, the examiner could not be positively satisfied that the mark was incapable of distinguishing the applicant's goods. Further, in accordance with the presumption of registrability afforded by the Act, there is no onus on an applicant to satisfy the examiner that the trade mark is capable of distinguishing the applicant's goods. Furthermore, added the applicant quoting observations by Wilcox J in Companhia Souza Cruz Industria E Comercio v Rothmans of Pall Mall (Australia) Ltd 41 IPR 497 at 503, "it is not for the registrar to impose non-statutory restrictions on the words that may be registered as trade marks".

The applicant discussed the change in standard for registrability introduced by the Act. For example, it was submitted that under the 1955 Act simple three letter marks were treated as non-distinctive; however, under the Act these are now accepted as distinctive. The applicant pointed to an extensive list of registered trade marks that consisted of a combination of letters and numerals and that could also be seen to indicate product codes, model or catalogue numbers.

The applicant concluded by submitting that in the light of the above submissions the examiner should reconsider his position and register the mark. If the mark was not to be accepted, the applicant sought a hearing.

The matter was heard by me as a delegate of the Registrar of Trade Marks in Sydney on 14 March 2001.

Mr Gerard Skelly, of Spruson & Ferguson represented the applicant.

Evidence/Submissions

Consistent with its submissions to the examiner, the applicant did not tender any evidence in support of its application, rather it relied on its submissions. At the conclusion of its submissions, the applicant's attorney invited the delegate to find evidence for himself, from the internet or motor magazines or newspapers, of the use of the LS430 mark.

Mr Skelly's submissions covered a single main issue: that of the impact of section 41 of the Act on the present application. In discussing this issue, Mr Skelly pursued two main themes. The first related to the presumption of registrability under the Act, with particular regard to the judgment of Branson J in Blount Inc v Registrar of Trade Marks (1998) 40 IPR 498 ("Blount"). The second related to the extent to which LS430 is inherently adapted to distinguish.

Mr Skelly analysed Branson's decision in Blount as being authority for the proposition that where in ss.33(1) and 41(5) the Act requires the Registrar to be "satisfied", this requires the Registrar to be persuaded of the matter according to the balance of probabilities; ie the Registrar be persuaded, having given proper consideration to those factors and circumstances that the Act requires him or her to give consideration to, that such matter is more probable or not. Mr Skelly stressed that it is not necessary for the applicant to persuade the Registrar and that the Registrar must only take into account relevant considerations under the Act.

Mr Skelly's second theme was that the examiner should have been satisfied on the balance of probabilities that LS430 was inherently adapted to distinguish, especially since he had no evidence to support his assertion that LS430 would be legitimately required by other motor vehicle traders as a production code and model or catalogue number. Furthermore, this assertion, and that to the same effect in paragraph 20 of Part 22 of the Australian Trade Marks Manual of Practice and Procedure, was a classic example of the Registrar imposing non-statutory restrictions on what may be registered as a trade mark. He said this was an internal office policy, not based on statute. This was frowned on by Wilcox J in the Free case [Companhia Souza Cruz Industria E Comercio v Rothmans of Pall Mall (Australia) Ltd (1998) 41 IPR 497].

Mr Skelly submitted that in Registrar of Trademarks v Woolworths Ltd (1999) 45 IPR 411 ("Woolworths"), French J remarked that the Registrar has, at the examination stage, limited access to information. The Registrar must necessarily be confined to undertaking inquiries involving consideration of the relevant mark, the content of the application and the existing Register and prior applications. If no valid ground for objection is taken based on these inquiries, the application will have to be accepted.

Mr Skelly continued that the examination objection was premised on an uncorroborated and broad generalisation that is not reflected in the Act. The applicant had, in its earlier submissions to the examiner, provided information as to the state of the Register, showing numerous cases of letter/numeral combinations that had been accepted without evidence of use.

There is, Mr Skelly submitted, no evidence to suggest the letters LS are ordinarily used in the motor vehicle trade to refer to any characteristic or quality of motor vehicles, nor is there any evidence of this as far as the numeral 430 is concerned. He stated that the letters LS were not of the category used in the industry to indicate level of equipment or standard items (such as "GL"). Similarly the numeral 430 would not ordinarily be required by others to identify any characteristic of a motor vehicle. A combination of the letters and numerals would further decrease the prospect of others legitimately requiring to use this particular combination.

Submissions continued, pointing to statistical combinations of the components of LS430. registrability under the 1955 Act, and current UK Trade Marks Office practice.

Mr Skelly submitted that as a result of the foregoing information, the Registrar would have ample material to decide that LS430 is inherently adapted to distinguish and capable of distinguishing. Having recourse to section 41(2) and (3) and by virtue of section 33(1), he argued, the Registrar must accept the application.

While Mr Skelly believed no recourse to section 41(5) was necessary, he submitted even if this was necessary, there was no onus on the applicant to persuade the Registrar on the capacity to distinguish issue. He said Branson J in Blount makes it clear that the Registrar has to be satisfied of certain matters. This does not mean that the applicant has to establish, on the balance of probabilities, that the mark has the capacity to distinguish: this requirement is only imposed on an applicant under section 41(6).

It was submitted that because of Branson J's reasoning (at 40 IPR 498 at 505) that the applicant "establishes" '[b]y placing before the decision-maker material upon which he or she is persuaded ...', where the Registrar is to "satisfy" himself or herself this does not require the applicant to place material before the decision-maker.

Therefore, even if the Registrar finds himself unable to accept based on the level of inherent adaptation to distinguish, he can be positively satisfied by referring to the state of the Register, UK practice and the absence of any evidence pointing to the letters LS or the numerals 430 being in common use in the motor vehicle industry. The state of the Register cannot be ignored, because there are too many examples of registered letter/numeral marks. There is nothing to suggest that they represent a string of wrongly registered marks.

Mr Skelly concluded submissions by making the comment that there was no need to follow the section 41(5) route and see evidence of use. However, he invited me to look at motor magazines, newspapers and the internet to see that LS430 is actively used by the applicant to identify a particular type of LEXUS motor vehicle. While LEXUS was the primary brand to indicate the make of vehicle and LS430 was the secondary brand to indicate the particular type of vehicle. In the luxury car market, a prospective purchaser would actively seek out the particular vehicle identified by LS430, as opposed to merely asking for a LEXUS vehicle.

After the conclusion of the hearing, following Mr Skelly's invitation and pursuant to regulation 21.19 of Trade Mark Regulations, I examined the LEXUS internet web site at Information on that site included:

• There were essentially seven models of LEXUS, with the following prefixes:

• LS - "top of the range" luxury sedan,

• ES - "entry level" luxury sedan,

• LX - "top of the range" luxury sports utility vehicle ("SUV"),

• RX - "entry level" luxury SUV,

• GS - "top of the range" luxury :"performance " sedan,

• IS - "entry level" luxury :"performance " sedan, and

• SC - a sports convertible.

• Each model prefix was followed by a three digit number (either 470, 430 or 300), which apparently related to the engine displacement of the particular model in centilitres; thus the LX470 has a 4.7 litre engine, the LS430 a 4.3 litre engine, and any "300" has a 3 litre engine.

• The actual models listed on the web site were the LS430, ES300, LX470, RX300, GS430, GS300, IS300 and SC430.

• The web site included a comparison chart between various LEXUS models and those manufactured by other makers, which included:

• The Mercedes S430 (with 4.3 litre engine) as an equivalent model, and

• The Lincoln LS, as a model listed, but not necessarily as a direct equivalent.

Reasons

The Act defines a trade mark as follows:

What is a trade mark?

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.

Note:  For sign see section 6.

A sign is defined in s6 as:

sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.

To be prima facie registrable, a trade mark must be capable of distinguishing the goods for which registration is sought, in terms of s41 of the Act.

Section 41 provides:

Trade mark not distinguishing applicant's goods or services

41.(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).

In Blount Inc v Registrar of Trade Marks (1998) 40 IPR 498 ("Blount"), Justice Branson discusses the application of s41. Her Honour observed at page 504 that, in deciding whether a trade mark is capable of distinguishing under s41, the Registrar has three options. The Registrar may conclude:

(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.

In each of those three options, the key consideration is the degree of inherent adaptation to distinguish possessed by a trade mark.

The criteria on which a judgment of inherent adaptation to distinguish should be made are set out at length by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 513. In F H Faulding & Son Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537 at 555, Kitto J summarised those criteria as:

The question to be asked in order to test whether a word is adapted to distinguish one trader's goods from the goods of all others is whether the word is one which other traders are likely in the ordinary course of their business and without any improper motive, to desire to use upon or in connection with their goods.

The criteria were recently approved by Wilcox J in Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FAC 177.

Thus, the relevant question I must consider in this case is whether the combined letters and numerals LS430 are those which other traders likely, in the ordinary course of their business and without any improper motive, to desire to use in connection with their goods or services.

Given the direct correlation of the number to the engine displacement, and the examples of other vehicle model numbers similarly using the engine displacement as part of a model number (eg "S430"), I cannot conclude 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.

However, I am likewise unable to conclude that 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. This inescapably draws me to the provisions of s41(5).

Mr Skelly has submitted that in considering s41(5), there is no onus on the applicant to provide any evidence for the Registrar. Further, following French J in Woolworths, the Registrar must necessarily be confined to undertaking inquiries involving consideration of the relevant mark, the content of the application and the existing register and prior applications. If no valid ground for objection is taken based on these inquiries, the application will have to be accepted.

Mr Skelly did not provide a citation for French J's remarks; however, I assume that they come from the following passage in Woolworths (45 IPR 411 at 427):

Section 33 imposes upon the registrar and the court, on appeal from the registrar, an obligation to accept the application unless satisfied either that the application has not been made in accordance with the Act or that there are grounds for rejecting it. The decision to reject an application regularly made must now be based upon positive satisfaction that a ground for rejecting it is made out. This may have implications for the registrar’s administrative practice. There will no doubt be cases in which the requisite state of satisfaction can be reached by consideration of the visual and aural features of the marks in question against the description of the goods and/or services to which they relate. But there will also be cases in which such materials will be of themselves inadequate to support a proper judgment. In some circumstances market or survey evidence might be necessary to form a concluded view. Unless the registrar is to undertake inquiries of that kind going beyond the content of the application and the existing register and prior applications, then the application will have to be accepted and determination of such questions as deceptive similarity left to opposition or expungement proceedings. Given the preliminary character of the acceptance decision and the availability of the later adversarial processes, it may be consistent with the policy of the 1995 Act that only in clear cases of deceptive similarity will the registrar reject upon that ground.

With respect, I am of the opinion that the above passage, from a case dealing with the issue of deceptive similarity and s44, must be read in consideration of Branson J's comments in Blount (40 IPR 498, at 503-4), where her Honour said:

The applicant further placed reliance on s 33 of the Act which has, in effect, altered the burden of proof generally so far as acceptance of applications is concerned. Section 33 (1) provides that the registrar must accept the application unless satisfied that the application has not been made in accordance with the Act, or that there are grounds for rejecting it. The 1955 Act, by s 44, required the registrar to accept the application only if satisfied that there was no lawful ground of objection to it. The terms of s 33 (1) of the Act are presumably intended to reflect the recommendation of the working party that the Act “should be expressed in terms which make it clear that there is to be a presumption of registrability when examining an application for registration”: p 42 of the report. However, by reason of the terms of s 41 of the Act, it is doubtful that s 33 (1) can have any practical effect so far as the specific question of capacity to distinguish is concerned. Each of ss33 (1) and 41 involves the concept of the registrar being “satisfied”. Where the Act requires the registrar to be “satisfied” of any matter, it is to be understood as requiring that he or she be persuaded of the matter according to the balance of probabilities: Rejfek v McElroy (1965) 112 CLR 517; at 521. That is, that the registrar be persuaded, having given proper consideration to those factors and circumstances that the Act requires him or her to give consideration to, that such matter is more probable than not.

Branson J further points out that s41 provides its own regime and at 505 says:

The question whether or not a trade mark is to be taken for the purposes of s41(2) as capable or not capable of distinguishing the designated goods or services from the goods or services of other persons is governed entirely by s41(3)-(6). The effect of such subsections is that a trade mark is not to be taken as capable of distinguishing the goods or services of an applicant from the goods or services of other persons unless the registrar is satisfied of certain matters or the applicant establishes a certain matter, in the sense discussed above.

It is undoubtedly the case that a general presumption of registrability underlies the policy intent behind the introduction of the 1995 Act. However once a ground for rejection in relation to a question of capacity to distinguish has been identified to the satisfaction of the decision maker it can only be overcome by recourse to the processes outlined in s41. In such a scheme I believe that it is necessary for the applicant to provide evidence of use or point to a convincing set of circumstances that would allow for a finding in the applicants favour.

In the absence of formal evidence Mr Skelly referred me particularly to the state of the Register and the approach of the UK Registry as circumstances that should be considered persuasive in an assessment under s41(5).

Although consideration of relevant, existing trade mark registrations may be of assistance to a decision maker, it is settled law in Australia that the state of the Register is to be disregarded when considering a particular mark tendered for registration: Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) 47 IPR 579, at 590 per Wilcox J. I can detect no persuasive pattern of identifiable precedent value in current registrations that would suggest taking a different course of action and therefore act in accordance with that position.

In the absence of a practice on letter numeral combinations here in Australia, the practice of the UK Registry may have been of assistance. However in the present circumstances where the Registrar here in Australia does have an advertised practice to aid a decision makers deliberations, I suggest that the existence of a practice in another jurisdiction is of limited assistance and no binding authority on me.

Notwithstanding Mr Skelly's submissions and the information on the lexus.com web site, the applicant has not provided any evidence or other convincing information to satisfy me that the trade mark does or will distinguish the designated goods.

Decision

Accordingly, I find that LS430 is not a combination of letters and numerals that is capable of distinguishing the designated goods. I therefore reject this application.

John Braybrooks
Deputy Registrar
14 June 2001