Walton International Limited v Ferdinando Giordano S.p.A

[1999] ATMO 48

TRADE MARKS ACT 1995

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

RE:      Trade  Mark  Application  No.  669065  for  the  word  mark  GIORDANO  in  the  name  of FERDINANDO  GIORDANO  S.p.A.  and  opposition  to  registration  by  WALTON INTERNATIONAL LIMITED.

Background

Ferdinando  Giordano  S.p.A.  (the  applicant)  lodged  applications  numbered  669065  and  669066

under the Trade Marks Act 1955 on 8 August 1995, for the word mark GIORDANO, in classes

29 and 33 respectively. Before examination of the applications they were amalgamated to a single application, numbered 669065, in two classes under the provisions of the Trade Marks Act 1995

(the Act). The application was accepted in respect of a specification of "edible oils" in class 29 and

"wines" in class 33. Acceptance was advertised in the  Official  Journal of  Trade  Marks  of  15

August 1996.

Walton International Limited (the opponent) filed a notice of opposition on 15 November 1996. The grounds under the Act, on which opposition is based, are listed under sections 41, 42, 43, 44, 58,

59, 60 and 62(a). The opponent also alleged that registration and use of the mark would be contrary

to discussions held between it and the applicant.

The Evidence

The evidence in support of the notice of opposition was served by 25 September 1997 and consists

of four Statutory declarations detailed below.

• A  declaration  made  on  15  August  1997  from  Penelope  Biddle,  a  former  employee  of  the

Government of South Australia, as Manager of the Northern Asia sector for the International

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Business Division of the Economic Development Authority, containing exhibit "PB1" (the Biddle declaration).

• A  declaration  dated  15  August  1997  from  Dr  Drazen  Lesicar,  attorney  for  the  opponent,

containing exhibit "DL1" (the Lesicar declaration).

• A declaration dated 25 August 1997 from Masa Higuchi, a Divisional Manager for Daimaru

Australia Pty Limited (the Higuchi declaration).

• A  declaration  dated  12  September  1997  from  Mok  Yuen  Yin,  Anne,  a  Director  of  the opponent, containing exhibits "GHK1" to "GHK19" inclusive (the Mok declaration).

The evidence in answer was served by the applicant by 25 March 1998 and consists of a Statutory declaration  from  Ferdinando  Giordano,  President  of  the  applicant,  declared  on  13  March  1998 containing exhibits “A” to “F”.

The evidence in reply was served by 26 October 1998. It consisted of two Statutory declarations,

as detailed below.

• A declaration dated 26 October 1998 from Megan Rose Low, an employee of the attorney for the opponent (the Low declaration).

• A declaration dated 21 October 1998 from Chan Kui Tim, Jimmy, a Director of the opponent, containing exhibits "CKTJ-1" to "CKTJ-5" inclusive (the Chan declaration).

The total evidence is extensive and I only intend to describe the material submitted in detail where it

is relevant to a particular issue under consideration.

Following the submission of the evidence, both parties requested to be heard in the matter and it came before me in Canberra on 23 February 1999. The trade mark applicant was represented by Ms Margaret Ryan of the Melbourne office of Phillips Ormonds Fitzpatrick, whilst the opponent was represented by Mr Howard Schulze of the Adelaide office of Collison & Co.

Submissions

Mr  Schulze  directed  my  attention  to  the  following,  which  he  said  were  the  main  points  of  the opponent's case, when he presented his submissions.

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• The opponent is the registered owner in Australia of trade marks 453173 and 466432, both for class 25 goods, 716193 for class 9 goods and 723805 for class 18 goods each, for the word GIORDANO. It is also the registered owner of 501626 in class 25 for the mark GIORDANO BLUES.

• The opponent has an immense reputation throughout Asia and the Middle East in relation to clothing,  as  the  evidence  shows.  This  reputation  has  become  widely  known  in  Australia,  by means of the spillover effect of travel by tourists into these regions. (Ref. to tests developed in the decided cases of  Anheuser-Busch  Pty  Limited  v  Castlebrae  Pty  Limited  and  Others

  [1991] 23 IPR 54 and ConAgra  Inc  v  McCain  Foods  (Aust)  Pty  Limited  [1992] 23 IPR

193).

• The opponent has substantial use of the mark in respect of clothing in Australia.

• Despite differences in the nature of the goods of the applicant (wines and edible oils) and the opponent (clothing, eyewear and articles of leather or imitation leather), similarity exists in that all

  of these goods are caught by fashion or image marketing.

• The applicant is infringing the opponent's mark. Under s.120(3)(d), the interests of the registered owner are likely to be adversely affected, in terms of the opponent's trade mark image and goodwill in the mark, if the applicant uses the GIORDANO mark on other products. This may

  be especially the case if the applicant's wine and edible oils are not at the prestige end of the market, as the evidence appears to indicate.

• Due to the opponent's sizeable reputation, there is an onus on the applicant to show that there will not be confusion, if the trade mark is registered, because people might wonder if all of the goods come from same source.

• In McDonald's Corporation v. Joburgers Drive-Inn Restaurant (Pty) Limited and Another

[1996] 36 IPR 11, under the Trade Marks Act 1993 (South Africa), McDonald's international reputation was sufficient to mount a successful opposition, despite their not having traded in

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South Africa at all. In the current circumstances, the opponent has an immense reputation and has already traded in Australia.

• In a decision related to a trade mark opposition issued by the Taiwanese Central Bureau of the Ministry of Economy, the present opponent was successful in preventing the present applicant from gaining a registration in Taiwan for the goods of this application.

• The onus falls on the applicant to convince the Registrar that there is no reasonable probability that  deception  or  confusion  will  arise,  as  shown  in  Carnival Cruise  Lines  Inc.  v  Sitmar Cruises Limited 31 IPR 375 at 378-9.

Ms Ryan then presented submissions on behalf of the applicant with the following arguments.

• The infringement provisions outlined in s.120 are not relevant to this opposition question. As discussed in Tecmo Kabushiki Kaisha v Tokyo Denki Kabushiki Kaisha (1995) AIPC ¶91-

  177 at 39,582, the Registrar is not entitled to speculate on matters of infringement.

• The opponent's reputation in Australia in the mark GIORDANO is not high. The opponent has used  the  mark  in  relation  to  clothing,  and  the  reputation  is  not  sufficient  to  displace  the applicant's right to claim registration in the same mark, in Australia, for wines and olive oil.

• Sales of the opponent's goods are not of a sufficiently high figure to establish a reputation in Australia. Despite some reputation in Asia, it is the opponent's renown in  Australia which is the critical factor for s.60 (Pioneer  Hi-Bred  Corn  Co.  v  Hy-Line  Chicks  Pty  Limited  [1979] RPC 410 at 423 and 424).

• Most of the material in the Chan declaration should have been submitted as evidence in support, rather  than  evidence  in  reply.  The  material  was  not  a  response  to  details  in  the  evidence  in answer and was known at the earlier stages.

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• Many issues were also raised concerning the level of reputation of the opponent in Australia that could result from its reputation in Asia. (Ref. ConAgra (supra) at 239.)

• The  Biddle  declaration  should  be  afforded  little  weight,  as  far  as  its  value  as  evidence  is concerned. There is no indication that the declarant learned of any reputation of the opponent in Australia at all, perhaps it is simply the reputation in Asia to which the declarant attests.

• Much of the evidence of use, particularly that outlined in the Chan declaration, post-dates the present  application  date  and  should  not  be  considered  as  providing  any  reputation  for  the opponent.  The  date  of  application  is  the  date  at  which  the  rights  in  the  mark  are  to  be determined  for  the  purposes  of  s.60   (Southern  Cross  Refrigerating  Co.  v  Toowoomba Foundry Pty Limited (1954) 91 CLR 592 at 595).

• All of the goods of opponent are fashion items. Such manufacturers or producers do not usually branch out into such goods as wines and edible oils. The cases relied on in this regard by the opponent all have a degree of of brand extension.

• The  McDonalds  case  (supra)  in  South  Africa  is  not  relevant  to  this  opposition.  That  case involved a different market and different legislation concerning well-known marks. In addition, although there had been no commercial use in South Africa, a large proportion of white South Africans recognised the trade mark. As this group would constitute a significant proportion of their South African market, these factors influenced the decision. Such factors are not present here.

Mr. Schulze responded to these submissions, on behalf of the opponent, with the following main points:

• The opponent sought to rely on either or both of s.120 and s.60. Whichever section of the Act was appropriate, the reputation of the opponent is substantial and has reached the point where

  the onus has shifted to the applicant.

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• The evidence in reply was indeed in response to the evidence in answer. This material answered the applicant's claims to reputation in Australia.

• In the  ConAgra  case (supra) there was no commercial use at all of the mark but here, the opponent has provided substantial use, in Australia, in the relevant market.

• The sector of the Australian market interested in the opponent's highly fashionable clothing and accessories is much smaller than the total Australian market. The reputation of the opponent in this sector is substantial.

• The clothing fashion business industry has an obvious crossover to wine because goods of either industry could reflect on the other due to the extreme sensitivity in those industries to either a good or a poor image. In this instance, the brand extension could readily be inferred since the trade marks involved are identical.

Ms Ryan responded on behalf of the applicant.

• There  is  no  indication  of  a  limited  market  for  the  opponent's  clothing  goods  leading  to  an assumption of an enhanced reputation for the opponent in that particaular group. The size of the market could be Australia wide, as it is also for the applicant's wine and olive oil. Thus, use of

  the opponent's mark is very limited, in view of the possible market in Australia, leading to the conclusion that a sizeable reputation simply does not exist for the opponent.

• The link between the opponent's clothing and personal accessory items on the one hand, and the applicant's wine and edible oils on the other, is so remote that no confusion would occur in the minds of consumers by use of the GIORDANO mark by the applicant.

Discussion

Although the separate grounds raised by the opponent in the notice of opposition covered eight sections of the Act, only s.60 was clearly contested at the hearing. The other grounds, however, were not withdrawn and so I intend to briefly comment on them as appropriate.

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Before embarking on that exercise, however, I note that much of the opponent's initial arguments were directed toward s.120 of the Act, concerning infringement of a registered  trade  mark.  As submitted by Ms Ryan, such a consideration is outside the domain of the Registrar. Hearing Officer Homann commented on this matter in Tecmo (supra) at 39,582 where he said "…I am not entitled

to  speculate  on  whether  a  court  would  find  that  the  use  of  the  applicant's  mark  would  be  an infringement of the opponent's mark, or to decide that it would be." Although I am not entitled to make  any  assessment  concerning  infringement  under  s.120  in  this  decision,  I  also  note  that  the opponent's  submissions  do  fall  under  the  considerations  to  be  made  in  terms  of  s.60  and  I  will examine them in that context.

The applicant also claimed that the opponent's evidence in reply was not a reply to the applicant's evidence in answer and had not been properly served because, if anything, it should have been part

of the evidence in support. However, given the nature of this opposition matter, both parties sought,

to some extent, to outline their overall reputations. On this basis, I consider that the evidence in reply could be seen as a response to build the opponent's reputation in the face of the material submitted

by the applicant in the evidence in answer.

(a) Sections 41, 42, 43, 59 and 62(a)

Although the above grounds were claimed in the notice of opposition, they were not supported by any evidence and no submissions were made concerning them at the hearing. Thus, I find that the opponent is not successful in relation to them.

(b) Section 44 - Identical etc. trade marks

No specific submissions were made at the hearing in relation to s.44. However, the ground was raised in the notice of opposition. In addition, the opponent does have prior registrations for an identical trade mark, and so the matter merits some comment.

Section 44 provides a block to the acceptance of a trade mark application if three factors are met. These factors occur where another  trade mark: (1) is either substantially identical or deceptively

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similar to the mark of the application, (2) has a specification of goods and/or services considered similar to the application and (3) has a claim to a prior date of registration.

The opponent's GIORDANO trade marks which have been registered with a date of registration prior to the present application are 453173 and 466432. The opponent also has trade mark number

501626 registered for GIORDANO BLUES. I believe that these trade marks are either identical, in

the case of the first two marks, or deceptively similar in the case of the last mentioned mark, to the present GIORDANO trade mark. The remaining leg for consideration is the similarity or otherwise

of the goods or services of the marks involved.

The  opponent's  registered  marks  cover  specifications  of  "mens  clothing"  (453173),  "articles  of clothing,  including  boots,  shoes  and  slippers"  (466432)  and  "articles  of  clothing,  footwear  and headgear" (501626). I also note that the opponent has two other registrations, 716193 for goods in class 9 and 723805 for goods in class 18, which both post-date the present application and thus do

not present any difficulty for the applicant under s.44.

The present application covers two classes of goods, wines in class 33 and edible oils in class 29. The standard tests for similar goods, which deal with: the nature of the goods, their uses, and the trade channels through which they are bought and sold, are set out in  Re: Jellinek's Application

(1946) 63 RPC 59. I note that, broadly, the opponent's goods are clothing and the applicant's goods are foods. The nature and uses of these items are quite distinct. The trade channels are also different, with the only possible point of convergence at the end of the retail process, where they could all be sold in large department stores or extremely large supermarkets. I do not believe, however, that this provides sufficient qualification for the opponent's clothing goods to be considered

as having the same trade channels as the applicant's wines or edible oils. These three tests lead me

to conclude that clothing could not be considered as similar goods to either wines or edible oils.

Having decided that the opponent's goods, covered by prior registrations, and the applicant's goods are not similar, the opposition is not successful in terms of s.44.

(c) Section 58 - Applicant is not owner of trade mark

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In order to successfully mount opposition under s.58, the opponent would need to have used an identical trade mark, or virtually identical trade mark, prior to the present application. This it did. Further to this discussion, however, as established in Re Hicks' Trade Mark (1897) 22 VLR 636,

the opponent would also need to show that it had used its trade mark on "the same kind of thing"

prior to the applicant filing its application.

This "same kind of thing" arguably equates to a narrower interpretation of the goods involved than merely "similar goods" under the present Act, or to "goods of the same description" under the Trade Marks Act 1955 (the  repealed  Act).  I  have  already  found  that  the  opponent's  goods  and  the applicant's goods are not similar in the comments concerning s.44 above. Correspondingly, I also find that they are not "the same kind of thing" as is required by Hicks (supra) if the opposition were

to be successful.

On this basis I find that the opponent is not successful in terms of s.58.

(d)  Section  60  -  Trade  mark  similar  to  trade  mark  that  has  acquired  a  reputation  in

Australia

This ground of opposition was the only section of the Act directly argued by the opponent at the hearing. The relevant section of the Act reads:

60. 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 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.

The deception or confusion envisaged here is said to be produced as a direct result of the reputation

of the opponent. An investigation in terms of s.60 is only triggered if the opponent can provide sufficient evidence of its reputation in the mark in Australia. This reputation must be sufficient to produce  a  question  in  the  minds  of  a  substantial  number  of  purchasers.  The  present  s.60 corresponds to s.11 of the Trade Marks Act 1938 (U.K.). In discussing s.11 of that Act, the above

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requirement was outlined by Evershed J in Smith Hayden & Co Ltd's Application (1946) 63 RPC

97 at 101 with the words:

Having regard to the reputation acquired by the [opponent's mark], is the Court satisfied that the mark applied for, if used in a normal and fair manner in connection with any goods covered by the registration proposed, will not be reasonably likely to cause deception and confusion amongst a substantial number of persons.

From the evidence provided, I have little doubt that the opponent enjoys a sizeable reputation in many Asian and Middle Eastern countries. The question to be answered, however, is how much of this reputation has been transferred into Australia by means of the spillover effect from international tourism.  Neither  of  the  cases  relied  on  by  the  opponent  in  relation  to  a  spillover  of  reputation concerned an opposition to registration. Anheuser-Busch (supra) was an expungement action and ConAgra (supra) was an action involving both passing off and ss.52 and 53 of the Trade Practices Act 1974. I accept, however, that the tests discussed in those cases are relevant.

Despite  the  figures  provided  for  tourism  between  Hong  Kong  and  Australia,  no  indication  is available to explain how much, if any, exposure the tourists had to the opponent's mark, save the Biddle  declaration  regarding  her  own  experience.  It  is  theoretically  possible  that  the  opponent's stores were situated in readily accessible areas and that virtually all tourists were exposed to the mark or, alternatively, that the stores were situated in areas that tourists would rarely frequent. The spillover effect of reputation for the opponent, by means of international tourism, is extremely difficult

to quantify. This line of reasoning is supported in ConAgra (supra) at 239 in the words of Lockhart

J:

Evidence of this kind has considerable difficulty, it seems to me, as proof of reputation. It is not possible to assess how many travellers on short visits to the United States would have watched television either at all or at the times of the appellant's advertising, or would have visited the shops or supermarkets… .

Today's  Australian  has  a  greater  awareness  of  the  significance  of  international  trade  marks. However, I am not convinced that the opponent has built a sizeable reputation in Australia, as a result of Australians travelling through Asia or the Middle East.

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The opponent also put to me a number of other factors to consider concerning its reputation in the GIORDANO mark. These included the reputation generated by sales in Australia. It has traded in one store in Australia since 1993, with approximate sales of A$100 000 per year over four years. I

do not believe that this provides a sufficiently compelling presence in the overall clothing market to enable the opponent to claim a sizeable reputation. Figures of this magnitude from one sale point, in my opinion, do not provide assurance that the mark has developed a sizeable reputation in Australia

in any relevant market.

Another factor was a decision of the Taiwanese Central Bureau of the Ministry of Economy, in which  the  present  opponent  was  successful  in  preventing  the  present  applicant  from  gaining  a registration  in  Taiwan,  for  the  goods  of  this  application.  I  note  that  the  decision  maker  on  that occasion commented that, such issues as English being a foreign language in Taiwan and the size of

the  opponent's  reputation  through  local  sales  and  advertising,  were  major  components  in  the opposition being successful. The circumstances in Australia in the present case are quite different from those in Taiwan, including the set of laws governing intellectual property.

A third factor to consider was the McDonald's case (supra) where, despite not having traded in the jurisdiction,  the  international  reputation  of  the  opponent  was  sufficient  to  mount  a  successful opposition.  Again,  the  size  of  the  opponent's  reputation  in  that  case  was  overwhelming.  Few international trade marks have reached the level of fame of the McDonald's marks. In the relevant market,  recognition  of  the  McDonald's  mark  was  surveyed  to  be  77%  and  90%  in  two  South African cities. Unlike the Australian Act, the Trade Marks Act 1993 (South Africa) has provisions

for well known trade marks (at s.35). It was in connection with those provisions that the opponent was successful. Additonally, I cannot accept that the present opponent's reputation in Australia is on

par with the international reputation of McDonald's, in relation to their mark. In addition, another element  in  that  case  was  significant.  The  applicant  in  South  Africa  sought  registration  for  an application  that  involved  the  specific  goods  in  which  the  opponent's  reputation  resided.  For  the above reasons I distinguish the McDonald's case (supra) from the present opposition.

Even the combination of the various factors put to me, to indicate the opponent's reputation, is not of sufficient  force  to  convince  me  that  the  opponent  enjoyed  the  level  of  reputation  in  the  mark

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GIORDANO in this country, that is necessary to produce any onus on the applicant to counter such reputation.

The  opponent  also  made  detailed  submissions  concerning  the  applicant's  evidence,  particularly regarding  its  limited  use  of  the  mark  and  linked  this  to  the  applicant's  reputation.  However,  the applicant's evidence, apart from demonstrating that the application is bona fide and that some use of

the  mark  by  the  applicant  has  already  occurred,  is  irrelevant  to  the  issues  to  be  decided  in  the present case.

The  opponent  also  argued  that,  if  the  present  application  were  allowed  to  proceed,  that  the opponent's image would be eroded. The opponent has claimed that it has used its resources to build

an image of sophisticated, prestigous and exclusive clothing to attempt to capture the market of fashion  conscious  purchasers.  This  market  is  extremely  sensitive  to  fashion  perceptions  and  the opponent  was  concerned  that  activities  of  the  applicant,  in  using  the  GIORDANO  mark,  could undermine the opponent's standing. Despite the concerns of the opponent, I am of the opinion that

the real likelihood that a substantial number of the relevant purchasing public would be deceived or confused is not high. The opponent's reputation in Australia is simply not of the order, whereby a sufficient number of people would be given cause to wonder if the applicant's wines and edible oils

and the opponent's clothing goods were from the same source.

Section 60 does not require a direct comparison between the opponent's goods and the applicant's goods. The heart of the matter is whether or not deception or confusion will result, assuming that the application is registered and used in a normal manner, based on the opponent's reputation at the time that the applicant filed its application. Obviously, some comparison of the respective goods must be made, but not for the purposes of directly deciding their similarity. The comparison is to enable the

"balancing act" of the similarity of the applicant's and the opponent's goods and the prior reputation

of the opponent to be made. The less the similarity in the goods, the greater would be the reputation needed to produce a similar level of deception or confusion.

In  the  present  circumstances,  in  my  opinion,  any  similarity  between  the  opponent's  clothing  and personal  accessory  goods,  and  the  applicant's  wine  and  edible  oils  is  quite  tenuous.  In  general,

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clothing manufacturers do not also produce wine or edible oils. No single trader in both fields comes

to  mind.  The  opponent  submitted,  in  the  evidence  of  the  Chan  declaration,  that  it  had  held  a promotion in March - April 1998, at which French wine was offered free of charge to purchasers of

the  opponent's  GIORDANO  clothing,  provided  that  the  goods  purchased  were  above  a  certain designated value. However, I do not accept that this provides any clear reason to suppose that a link exists between clothing and wine. A claim could be made to link any two goods or services by hosting a promotion, whereby one was provided free on the purchase of the other. It is common to find advertisers using such tactics as, "be one of the first one hundred to take advantage of this magnificient offer and receive a free gift". I do not accept that the opponent's promotion provides any support to consider that its clothing has a similarity in any sense to the applicant's wine goods.

Because I believe that there is no obvious link between the respective goods of the parties, the opponent's reputation would need to be even larger than that required if there had been some link to determine that the goods shared a similarity. Even with the goods issue aside, I do not believe that

the opponent's reputation in Australia to be of a magnitude sufficient to cause a substantial number of people to wonder if the respective goods are from the same source.

I find, then, that the opponent is not successful in terms of s.60 of the Act.

Conclusion

From  the  foregoing,  I  have  found  that  the  opposition  has  not  succeeded  on  any  of  the  grounds indicated in the notice of opposition. Therefore, as a delegate of the Registrar, and subject to an appeal from this decision, I dismiss this opposition. I see no reason why costs should not follow the decision, and so I award costs to the applicant.

Don Nancarrow

Acting Hearing Officer
10 May 1999.