Unilever Plc v Beverly Jean Pickett

[2002] ATMO 5

TRADE MARKS ACT 1995

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

Re:      Opposition by Unilever PLC to registration of trade mark application 737977(3,5) - NEEM ORGANICS AND DEVICE - filed in the name of Beverley Jean Pickett.

Background

Trade mark application number 737977 is an application to register the words neem organics and device, which appears below, in class 3 for Neem oil based personal skin care products and hair care products and class 5 for Neem oil and neem oil by-products for pharmaceutical purposes only. The application was filed on 1 July 1997 ("the relevant date") by Beverley Jean Pickett of 76 Stafford Street Gerroa New South Wales ("the applicant"). 737977 was duly examined and, on 11 March 1999, the Registrar advertised, in the Australian Official Journal of Trade Marks, that he accepted this trade mark for registration.

On 28 May 1999, in accordance with Part 5 of the Trade Marks Act 1995 ("the Act"), Unilever PLC, an English company of Merseyside, England ("the opponent") filed opposition to the registration of 737977. In its notice of opposition it nominated ten grounds, relying on sections 41, 42, 43, 44, 55, 58, 59, 60 and 62 of the Act.

The opponent served on the applicant, and filed with the Trade marks Office, a statutory declaration by Ayela Ruth Thilo. Ms Thilo is corporate counsel for Unilever Australia Limited, and authorised by the opponent to give evidence on its behalf. This constitutes the evidence in support of the opposition.

The applicant served on the opponent, and filed with the Trade Marks Office, a statutory declaration by Beverley Jean Pickett. This constitutes the evidence in answer to the opposition.

The opponent served on the applicant, and filed with the Trade Marks Office, a further statutory declaration by Ayela Ruth Thilo. This constitutes the evidence in reply by the opposition.

Pursuant to the provisions of regulation 5.14, the opponent requested a hearing. The Registrar appointed a hearing for 24 October 2001, in Sydney. The hearing was conducted before me. The opponent was represented by Brian Elkington, of Blake Dawson Waldron Lawyers of Sydney. The applicant appeared in person accompanied by her husband Brian Pickett and daughter Amanda Pickett.

The Evidence

The evidence comprised:

Declarant	Status	Dated	Exhibits	Known As
Evidence	in Support
Ayela Ruth Thilo	Corporate Counsel	19 October 1999	TMS 1 to TMS 8	Thilo 1 declaration
Evidence	in Answer
Beverley Jean Pickett	TM Owner	25 August 2000	Annexures 1 to 3	Pickett declaration
Evidence	in Reply
Ayela Ruth Thilo	Corporate Counsel	21 June 2001	Annexures A to E	Thilo 2 declaration

The Thilo 1 declaration was made by the corporate counsel for the opponent's Australian subsidiary company. She states that the opponent and its Australian subsidiary company provided the information contained in the declaration.

Thilo 1 states that the opponent is the owner of trade mark registration 678338 organics device in class 3 Products for the hair being shampoos, conditioners, creme conditioners, spray conditioners, strengthening serum, repair creme. The opponent's mark is shown below:

It further states that the opponent's registered mark organics device is used in relation to hair care products that work on both the hair surface and hair roots of users. The mark has been used in Australia since late 1994, and the sales figures since 1995 are substantial, being many millions of dollars.

Annexed to the Thilo 1 declaration are details of the opponent's advertising expenditure, which was commensurate with its sales, and examples of its advertising campaign. The examples include videotapes of the television commercials used, newspaper and magazine advertisements, labels, packaging, and point of sale material.

The Pickett declaration states that the applicant and her husband are the owners of a business, Neem Organics, situated in Berry in New South Wales. The business has been operating since 1996 retailing Neem oil-based skin and hair care products and Neem oil by-products for pharmaceutical purposes.

Mrs Pickett states that "Neem" refers to the Neem tree, which originated in Northern India. The Neem tree is now grown in over 40 countries including Australia. Oil is extracted from the seeds, leaves and bark of the tree. The oil, she says, has been recognised for centuries for its topical healing properties.

The Pickett declaration states that the applicant's products are hand-blended from organically grown plant-derived ingredients. The market for the goods is said to be a highly specialised niche market. The applicant's products are expensive, at prices two to three times higher in price than comparable supermarket products (the applicant's prices are detailed in Annexure 2 to the Pickett declaration).

Mrs Pickett states that the applicant's trade channels include a retail store, mail order, internet and wholesaling activities. She says that the applicant is one of the few sellers of Neem products in Australia, and probably the only retail outlet in New South Wales. The confidential sales figures provided in the Pickett declaration show a steadily increasing turnover that commenced in the tens of thousands of dollars.

The remainder of the Pickett declaration is not strictly evidence, but rather submissions. These matters were raised at the hearing and will be discussed below.

The Thilo 2 declaration states that Ms Thilo conducted internet searches on 21 November 2000 and 29 May 2001. The searches used the Google search engine and searched for "neem" and "organic". The first search resulted in 5800 hits, while the second resulted in 8190. Exhibited with the Thilo 2 declaration are copies of some of the websites identified by the internet search.

Ms Thilo offers the opinion that her searches demonstrate that the words "neem" and "organic" are descriptive. She also makes submissions regarding the descriptive nature of the words and about the similarity of the competing marks.

Submissions, Considerations and Findings

Mr Elkington, for the opponent, relied on two principal contentions. The first was that the applicant's mark neem organics is deceptively similar to the opponent's organics marks that have been the subject of significant use since 1994. The second is that the neem organics mark is not entitled to registration because it is not capable of distinguishing the applicant's goods from those of other traders.

The first principal contention raises the issues of the section 44 and section 60 grounds of opposition. I shall consider both below along with the relevant submissions of the parties.

I shall consider submissions relating to the section 41 - capable of distinguishing - ground below.

As no submissions or evidence were put forward in support of the other grounds, I dismiss them.

Section 41 - Capable of Distinguishing
Section 41 provides for the assessment of the capability of trade marks to distinguish the designated goods or services of one trader from the goods or services of other persons. The initial step is provided for, in terms of subsection 41(3):

(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.

The classic statement of the test involved is that of Kitto J in Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 at 514:

[T]he question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.

The opponent submitted that the applicant's mark was not capable of distinguishing the applicant's goods from those of other traders. The opponent says the phrase neem organics is descriptive of the applicant's goods: neem is name of the tree from which the principal ingredients for the goods are derived, and the ingredients are all organically produced. The phrase neem organics is merely a rephrasing of organic neem. In the mark the applicant is employing the ordinary name of a principal ingredient and a commonplace description; the resulting trade mark should not, in the opponent's submission, be registrable.

The opponent further submitted that the leaf device of the applicant's mark does not render the mark distinctive and capable of distinguishing. It was submitted that the device is no more than a rendition of the neem leaf, or several neem leaves. References to D.R. Shanahan, Australian Law of Trade Marks and Passing Off (2^nd ed; Law Book Company Limited, 1990) pp. 111 - 113 were made regarding the lack of distinctiveness of a device that is common to the trade or descriptive of the goods or services in question. It suggested that descriptive devices could be distinctive only if sufficiently unique that other traders would not be likely to want to use a similar device, and so striking as to impress and be recalled as something more than a mere representation of the goods. The opponent submitted that the applicant's device was neither unique to the applicant nor striking in appearance.

The opponent also submitted that consumers were likely to refer to the applicant's goods by name, the word portion of the mark, thus rendering the device portion superfluous. Even if the device were found to be not totally devoid of distinctiveness, it is overshadowed by the word portion of the mark.

The applicant submitted that its mark was a combination of elements. The distinctiveness was derived from the entire visual effect. The applicant said that the mark was suggestive rather than descriptive. Its logo was important to distinguish its goods from other neem-based products.

It is clear from the evidence from both parties that the word neem is descriptive of the source of the applicant's products. It is similarly clear that Organics (and/or organic) is a commonly used descriptive term regarding production methods, both in the market for neem products and in the marketplace generally.

The words Neem and Organics constitute one element of the applicant’s composite trade mark.  It would be a mistake to seize upon elements within a composite trade mark and, having supposed those elements to lack inherent distinctiveness, to conclude that the trade mark as a whole also lacks inherent distinctiveness[1].  The assessment must apply to the trade mark as a whole.  In this regard, while the graphic element in the trade mark is a representation of a stalk of neem leaves, part of the overall assessment of a trade mark containing such a representation must be with reference to whether other traders would need to use such a representation, and combination, without improper motive. 

[1] Application by the Diamond T. Motor Car Company to Register a Trade Mark (1921) 38 RPC 373

I note that the representation of the leaves in the trade mark is a stylised and idealistic element rather than an accurate botanical representation. The stalk is erect, unlike the prone or recumbent stalks represented in the annexures to the Thilo 2 declaration. The leaves are plumper, wider and more curvaceous than those exhibited. I also note that most of the depictions of neem leaves in the Thilo 2 declaration appear to show stalks of more than seven leaves, and many seem to show seeds or blossoms attached to the stalks. In addition to the romanticised sprig of leaves, there are the two purely graphical curved and twisted stripes or swirls at the base of the stalk, which have no reference whatsoever to the goods at hand.

Where the graphic representation of an item common to the trade is sufficiently unusual or fanciful, I believe that it is understood that the rights that the applicant seeks, as far as they might extend to the fanciful representation of the item, are not in the item itself but the way in which it is represented within the trade mark.  While other traders providing neem products might need to use a representation of a neem leaf or neem leaves in respect of their similar goods, the probability of them needing to use the same, somewhat fanciful, representation as that in the opposed trade mark must be assessed as being non-existent.  It therefore follows that, whatever the denotation of the words Neem Organics, the word element may therefore be ‘carried’ by the graphic element and the trade mark as a whole assessed as having sufficient adaptation to distinguish to be registrable. I find that neem organics has sufficient adaptation to distinguish to be registrable.

I find that the opponent has not established this ground of opposition, I therefore dismiss this ground.

Section 44 - Substantial Identity or Deceptive Similarity

Section 44 reads:

Identical etc. trade marks

(1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:

(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:

(i)a trade mark registered by another person in respect of similar goods or closely related services; or

(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

Note 1:For deceptively similar see section 10.

Note 2:For similar goods see subsection 14(1).

Note 3:For priority date see section 12.

Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

(2)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:

(a)it is substantially identical with, or deceptively similar to:

(i)a trade mark registered by another person in respect of similar services or closely related goods; or

(ii)a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and

(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

Note 1:For deceptively similar see section 10.

Note 2:For similar services see subsection 14(2).

Note 3:For priority date see section 12.

Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

(3)If the Registrar in either case is satisfied:

(a)that there has been honest concurrent use of the 2 trade marks; or

(b)that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant’s trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant’s trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.

Note:For limitations see section 6.

(4)If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant’s trade mark for a period:

(a)beginning before the priority date for the registration of the other trade mark in respect of:

(i)the similar goods or closely related services; or

(ii)the similar services or closely related goods; and

(b)ending on the priority date for the registration of the applicant’s trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

Note 1:An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).

Note 2:For predecessor in title see section 6.

Note 3:For priority date see section 12.

The opponent's trade mark 678338 was registered from 17 November 1995. Therefore, it has a priority date which is earlier than the applied for trade mark.

The applicant's trade mark and the opponent's trade mark 678338 are registered for goods in class 3, including hair care products. I find the goods are similar goods.

The issue for determination is, therefore, whether the applicant's mark is substantially identical with, or deceptively similar to, the opponent's registered trade mark.

The opponent submits that it has devoted substantial sums of money to promote its goods under the organics trade mark. Consumers could easily be confused into thinking that the applicant's goods are related to those of the opponent. Customers might think that neem organics are a category of the opponent's goods that contain ingredients derived from the neem tree. This is particularly so as the word neem is merely descriptive and has no trade mark value itself.

The opponent further submitted that the leaf device in the applicant's mark did not provide significant assistance in differentiating the marks. Customers would more naturally refer to the words when ordering the product, particularly where the device is nondescript, as in this case.

The applicant submitted that its goods were part of a discrete niche market. Its customer base was actively seeking neem products only, not skin and hair care products generally. Such customers were very discerning and unlikely to be confused as to the source of the goods.

As Windeyer J pointed out in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd[2], the questions of substantial identity and deceptive similarity are quite different. Substantial identity is to be judged by a side by side comparison of the marks noting their similarities and dissimilarities, while deceptive similarity is to be assessed by the impressions left on the minds of persons of ordinary intelligence and memory based on recollection of the opponent’s mark and the impression created by the applicant’s mark. “Deceptive similarity” is defined by s 10 of the Act as follows:

[2] (1963) 109 CLR 407 at 414–15

For the purposes of this Act, a trade mark shall be deemed to be deceptively similar to another trade mark if it so nearly resembles that other trade mark as to be likely to deceive or cause confusion.

I am quite satisfied that a side by side comparison of the applicant’s and opponent’s marks shows that they are not substantially identical and I do not think it was seriously contended that they are. There is a common element in the word organics but otherwise the two marks are quite distinct in appearance containing different devices and layouts.

In relation to whether the respective trade marks are deceptively similar to each other, it is well established law that where an element that is common to the marks under comparison is descriptive or in common use in the trade, its presence must be to some extent discounted in considering whether the marks are deceptively similar. The extent to which the common element is discounted will depend on the extent to which that element is seen to be descriptive rather than distinctive: "Frigiking" Trade Mark.[3]

[3] [1973] RPC 739 at 752

As discussed under the section 41 ground, both neem and organics are descriptive words that are not, in themselves, inherently distinctive. Thus the critical features of the opposing marks, for the purposes of section 44, are the device elements - the sprig of leaves in the application mark and the innominate device of 678338. The devices are entirely dissimilar, and in my opinion considered as a whole, the neem organics trade mark is not likely to be confused with the organics trade mark. I find that the trade marks are not deceptively similar.

I find that the opponent has not established this ground of opposition, I therefore dismiss this ground.

The Section 60 Ground

Section 60 of the Act provides:

The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had acquired a reputation in Australia; and

(b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion.

Accordingly, to satisfy section 60, the opponent has the burden of establishing the following elements:

(a)       a pre-existing trade mark;

(b)substantial identity or deceptive similarity between the applied for trade mark and the pre-existing trade mark;

(c)the acquisition of a reputation in Australia by the pre-existing trade mark; and

(d)a likelihood that, because of that reputation, use of the applied for trade mark would be likely to deceive or cause confusion.

The opponent again relies on its trade mark registration 678338. Trade mark 678338 is clearly a pre-existing trade mark. However, I have also already determined that the marks are neither substantially identical nor deceptively similar. It is not necessary to consider the other elements of this ground.

I find that the opponent has not established this ground of opposition, I therefore dismiss this ground.

Decision

The opponent has not established any of its grounds of opposition. I therefore direct that the applicant's trade mark may proceed to registration unless, within one month from the date of this decision, the Registrar is served with a copy of a notice of appeal.

Costs

As to costs, I see no reason why costs should not follow the event. I direct that the opponent pay the costs of the applicant in accordance with the Official Scale (Schedule 8 of the Trade Marks Regulations 1995).

Jock McDonagh
Hearing Officer

18 January 2002