Watches of Switzerland Pty Ltd v Mappin & Webb Limited

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Watches of Switzerland Pty Ltd to registration of trade mark application 1460601 (14, 35) – WATCHES OF SWITZERLAND & Device - in the name of Mappin & Webb Limited

Delegate: Debrett G. Lyons

Representation: Opponent: Luke Merrick of Counsel instructed by Nicholas Butera of Corrs Chambers Westgarth, Solicitors
Applicant: Carmen Champion of Counsel, instructed by Joanna Martin of F.B. Rice & Co., Patent & Trade Mark Attorneys

Decision:
2015 ATMO 23

s52 Opposition: ss42(b), 58, 59 and 60 – no ground established – opposition unsuccessful.

Background

In this matter Mappin & Webb Limited (“the Applicant”) has applied under the Trade Marks Act 1995 (“the Act”) to register the trade mark which appears below:
Application No:         1460601
Filing date:                 21 November 2011
Goods/Services:         Cl. 14: Watches, clocks, time pieces, horological instruments, jewellery, articles made of precious metals or coated with precious metals all being made in Switzerland; all watches, clocks, time pieces and horological instruments being made in accordance with the Swiss Federal Council Ordinance governing the use of the appellation Switzerland or Swiss for watches
Cl 35: Retail services in connection with watches, clocks, time pieces, horological instruments, jewellery, articles made of precious metals or coated with precious metals all being made in Switzerland; all watches, clocks, time pieces and horological instruments being made in accordance with the Swiss Federal Council Ordinance governing the use of the appellation Switzerland or Swiss for watches
Trade Mark:
(“the Trade Mark”)
The application was examined as mandated by section 31 of the Act and subsequently advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 22 March 2012.
On 21 June 2012, Watches of Switzerland Pty Ltd (“the Opponent”) filed Notice of Opposition (“the Notice”) to the registration of the Trade Mark. The Notice is broad in nature and includes the grounds under sections 42(b), 58, 59 and 60 of the Act which were argued by the Opponent at the hearing.
Other grounds listed in the Notice I treat as having not been established but can be argued should my decision be appealed.
As a delegate of the Registrar of Trade Marks I heard this matter in Melbourne on 18 March, 2014. The Opponent was represented in person by Luke Merrick of Counsel, instructed by Nicholas Butera of Corrs Chambers Westgarth, Solicitors. The Applicant was represented by Carmen Champion of Counsel, instructed by Joanna Martin of F.B. Rice & Co., Patent & Trade Mark Attorneys. Ms Champion attended by telephone.
Onus and Relevant Date
The Opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities[1]. The date at which the grounds of opposition must be established is the date of filing of the application[2]: 21 November 2011 (“the relevant date”).
[1] See Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787; (2006) 70 IPR 599; [2006] AIPC 92-146 per Gyles J at [6] to [26].
[2] See Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 595.
Evidence
The parties have filed the following evidence in relation to this matter:
Evidence in Support:
Statutory Declarations by:
·     Eric Paul van der Griend dated 7 November 2012 (“van der Griend 1”);
·     Jennifer Canestra dated 25 October 2012 (“Canestra”); and
·     David Dimmock dated 6 November 2012 (“Dimmock”).
Evidence in Answer
Statutory declaration by:
· Kate Elizabeth Gresswell dated 4 June 2013 (“Gresswell”).
Evidence in Reply
Statutory declaration by:
· Eric Paul van der Griend dated 1 October 2013 (“van der Griend 2”).
Preliminary findings
The Opponent is an Australian company incorporated in December 1993 which in 1995 established a retail store business selling and servicing Swiss made watches.
The first such retail store opened in 1995 in Surfer’s Paradise, Queensland, followed later by stores in other tourist centres and prominent retail strips in Australia (“the Opponent’s stores”)[3].
[3] Main Beach, Qld. – opened 2002, closed 2007; King Street, Perth – opened 1997, still operating; Burswood Casino, Perth – opened 2001, closed 2004; George Street near Circular Quay in Sydney – opened 1999, still operating; Collins Street in Melbourne – opened 2001, still operating; Brisbane – opened 2003, still operating.
The Applicant, a UK company, licenses use of the Trade Mark to an intra-group company which promotes and sells Swiss made watches in the United Kingdom through stores doing business under the Trade Mark.
Those stores are all in the United Kingdom.
The Opponent uses more than one trade mark in connection with its business. On the evidence, the most commonly used trade mark appears below. It is the trade mark which appears on the shop fronts of the Opponent’s stores and which appears in much of the Opponent’s business paraphernalia and advertising.
As a general rule, the words and the background framing are in black and white (sometimes reversed from that shown above so that there is black lettering on a white “block” background) but invariably the “Swiss flag logo” is shown in colour as seen. The block can vary in size and sometimes a coloured, often red, border circumscribes the block.
On some very few occasions (as the practicalities of the use dictate) the byline, “THE EXPERTS IN TIME”, takes on more of a life and so a composite mark of the following form has been used:
WATCHES OF SWITZERLAND THE EXPERTS IN TIME
The usage shown above also illustrates the way in which, from time to time, the “Swiss flag logo” is presented in a “round” rather than “square” format.
In this decision I refer to the trade marks shown and described above, collectively, as the “the WOS mark”.
The watches sold in the Opponent’s stores are those of well-known Swiss watch makers including CARTIER, TAG HEUER, JAEGER-LECOULTRE, BREITLING, ORIS, BAUME & MERCIER, IWC, DIOR, LONGINES, ROLEX and OMEGA.
There is no evidence of the sale of watches bearing the WOS mark as a maker’s name.
Outline of the dispute
With the exception of section 59 which provides a basis for refusal of the Trade Mark if the Applicant filed the application without an intention to use the Trade Mark, the grounds pressed by the Opponent depend for their success on use of some other trade mark.
The Opponent relies on use of the WOS mark and of the words “Watches of Switzerland” in respect of services in the nature of the marketing, sale and repair of Swiss made watches.
Insofar as section 58 is concerned, the Opponent’s claim is that it is the first user and owner in Australia of a trade mark substantially identical to the Trade Mark.
With regard to sections 42(b) and 60, it is the Opponent’s contention that by reason of the extensive use of the words “Watches of Switzerland” throughout Australia over the course of more than a decade, the Opponent has established a substantial and valuable reputation such that public confusion or deception is the likely consequence of use of the Trade Mark.
The section 59 argument is that the Applicant’s evidence is “conspicuously silent” as to any planned use of the Trade Mark in Australia. The Opponent submits that “[I]f the Applicant had any firm plans to use the [Trade Mark] in Australia, it would have been a simple matter to identify and explain those plans in the lengthy declaration made by Ms Gresswell. It can be inferred from the Applicant’s silence on this issue that it lacks the requisite intention.”
The Applicant’s opening submission is that:
The evidence relied upon by the opponent is focused on the use of the opponent’s mark in respect of retail services relating to the offering for sale and sale of luxury Swiss watches bearing the trade marks of their respective manufacturers. That focus is reflective of the fact that the opponent has never used the opponent’s mark as a trade mark on any of the Relevant Goods. Accordingly, any finding adverse to the applicant should be confined to the class 35 services.
The Applicant’s primary position is that:
“both trade marks identify the source of the goods/services provided by the reference to the words ‘Watches of Switzerland’. In the case of the opponent’s mark that geographical identifier is emphasised by its association with the flag of Switzerland (consisting of a red flag with a white cross (a bold, equilateral cross) in the centre) which appears to the left or right of the words ‘Watches of Switzerland’. The opposed mark includes a distinguishing feature consisting of the letter “O” containing the letter W in capital letters and the letter “s” in lower case attached to the right side of its circumference.” … Accordingly, as “Watches of Switzerland” is a descriptor, the issue becomes whether the use thereof by the opponent in respect of its retail services prior to the priority date had given it a signification and associations it did not previously possess. The fact is that the use of “Watches of Switzerland” is used by the opponent as a descriptor of its services which involves the marketing and sale of high quality watches manufactured in Switzerland.
The Applicant submits that, on the evidence, the Opponent has not established the requisite reputation and so has not met the threshold requirement of section 60 of the Act, nor section 42 (b) which in this case is premised on alleged breaches of sections 18 and 29(1)(g) and (h)[4] of the Australian Consumer Law 2010 (“the ACL”).
[4]Section 18 of the ACL is the prohibition on conduct which is misleading or deceptive or likely to mislead or deceive. Section 29(1)(g) prohibits the making of false or misleading representations that goods or services have sponsorship or approval. Section 29(1)(h) prohibits the making of false or misleading representations that the person making the representation has a sponsorship, approval or affiliation.
The Applicant’s alternative position is that even if a reputation is found to exist, “the issue for determination is whether the use by the applicant of the opposed mark is causative of the requisite confusion or the likelihood of persons being misled” and in that regard it is argued that:
The burden of proof on an opponent is greater the more appropriate the descriptor is as a description of goods or services. Where descriptive words are involved it will be more difficult for an opponent to establish the probability of deception especially if the opponent has, as is the case here, not used the word or name simply as a trade mark, but primarily for the propose of denoting the particular kind of article/service to which he has applied it, and only secondarily, if at all, for the purposes of distinguishing his goods/services.
...in the case of a descriptive name there will always be the possibility of confusion, and that the application thereof to a like business would not ordinarily mislead the public . Further, the fact that the kind of business each party carries on is conveyed by their names is of considerable importance in making the assessment.
…
the applicant submits that this is an instance where the use of a descriptor mitigates against the possibility of the relevant consumer either being misled or confused, especially as the application of a descriptor to a like business would not ordinarily mislead the public.
With regard to section 59 and the allegation that at the relevant date the Applicant had no intention to use the Trade Mark in Australia I was reminded by the Applicant that filing an application for registration raises a prima facie presumption of intention to use in favour of the applicant[5] and whilst that presumption is rebuttable[6] a mere allegation of lack of intention to use is not enough by itself to shift the onus[7]. The Applicant submitted that non-use does not by itself imply lack of intention to use and there is nothing else in the evidence to raise such an inference and so the Opponent has failed to meet its onus.
[5] See Aston v Harlee Manufacturing Company [1960] HCA 47; [1960] 103 CLR 391 at 401.
[6] See Sapient Australia Pty Ltd and Sapient Corporation v SAP Aktiengesellschaft [2002] ATMO 31; Danjaq, LLC v Resource Capital Australia Pty Ltd [2004] ATMO 18).
[7] See Medley Distilling Co v Croakers Gully Australia Pty Ltd (2000) 53 IPR 430; NSW Lotteries Commission v Novamedia BV 52 IPR 638, Torrag Pty Ltd v Pah Pty Ltd [2006] ATMO 59; 70 IPR 349.
Discussion and reasoning
The little that need be said of the Applicant’s evidence has been noted or is discussed later.
So far as the Opponent’s evidence is concerned, I note firstly that none of it shows use of the words “watches of Switzerland” solus.
I also note that whilst the Swiss flag logo, whether in “square” or “round” format, is not a physically dominant part of the WOS mark, is a visually noteworthy aspect of it. That does not seem to be accidental. For example, exhibit 7 to Griend 1 shows a 10^th anniversary motif which omits the phrases “Watches of Switzerland” and “The Experts in Time” altogether and can best be described as a trophy-style wreath embracing the number “10”, subscripted by the words “celebrating ten years” and “1997 – 2007”, generally composed in blanded shades of dark gray but including, strikingly in colour, the Swiss flag logo.
The WOS mark itself is, on any view of the evidence, well used in and throughout Australia. Griend 1 estimates that the Opponent’s advertising and promotional activities have involved expenditure of $300,000 - $500,000 each year for at least the last ten years and he declares to its use since 2003 in national print advertisements in The Australian Financial Review, The Australian Financial Review Magazine, The Weekend Australian Magazine, The Australian and Vogue Australia and regionally in The Sunday Telegraph, Good Weekend Magazine, GQ Magazine, The Wentworth Courier, Brisbane Courier Mail, The West Australian, MAP Magazine, MX Melbourne, The Sunday Times Magazine, The Age, The West Weekend Magazine, Sunday Life Magazine, Brisbane News, Mosman Daily and North Shore Times.
The Opponent’s customer base is in some part measurable by the evidence that since 1997 the Opponent has provided Swiss watch repair services to approximately 50,000 customers in Australia. Griend 1 declares that more than 20,000 customers are registered with the Opponent and from time to time catalogues and other promotional material is sent to those people.
Use of the WOS mark in respect of the sale of Swiss watches is referred to in the declarations of Jennifer Canestra, the Chief Operating Officer of Richemont Australia Pty Ltd and a David Dimmock, General Manager of a luxury goods supplies in Australia, about which I will have more to say later.
It is clear from the arrangement of Mr Merrick’s written submissions and from his submissions at the hearing that he felt the Opponent was putting its best foot forward with its section 60 ground of opposition. Likewise, Ms Champion had much to say about reputation, distinctiveness and the likelihood of confusion or deception.
However, prior to the hearing I had noted that the Opponent intended to press section 58 of the Act and argue that the Applicant is not the owner of the Trade Mark, but that Ms Champion’s written submissions were silent on section 58.
At the hearing and in my opening remarks I commented on this and was advised by Ms Champion that she had no submissions (directly) relating to section 58. She conceded that there was no actual use of the Trade Mark in Australia[8], but I was advised that she had made other representations having relevance to section 58 including the submission that the compared marks were not substantially identical.
[8] Greswell has something to say of mail shots to Australian customers and of Australian travellers passing through the international terminal of Heathrow airport where the Applicant has three shops doing business under the Trade Mark.
Given the concession regarding non-use by the Applicant in this country and the evidence of use for many years before the relevant date of a competing mark, section 58 would ordinarily call first for my attention. If the marks are substantially identical, that section may be dispositive of the opposition. However, in this case the section 58 ground is informed by an assessment of the nature of the compared marks and so sections 60 and 42(b) are considered now.
Section 60
Section 60 provides:
60 Trade mark similar to trade mark that has acquired a reputation in Australia
The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, 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.
Note:For priority date see section 12.
The question of whether a trade mark would be likely to deceive or cause confusion for the purposes of section 60 requires, in practical terms, assessment of the likelihood of deception or confusion resulting from the combined effects of the reputation of the “other trade mark”, the degree of similarity of the trade marks and the nexus of the goods or services. What is missing from that simplified formulation which is fundamental in this case is the assessment of the nature of the compared signs claimed as trade marks.
The Opponent states that: “If it is shown that the opposed mark is substantially identical with, or deceptively similar to, the mark in which the relevant reputation subsists, it will often[9] follow that the necessary likelihood of deception or confusion will be made out.” The Opponent’s further submissions (slightly redacted) are that:
The Opponent’s WATCHES OF SWITZERLAND trade mark[10] had a very significant reputation in connection with Swiss watches and retailing services related to those watches as at the priority date of the Applicant’s Mark (21 November 2011) – see paragraphs 9 to 21 above. The reputation is plainly sufficient to found an opposition under s 60. … The Applicant’s Mark is substantially identical with the Opponent’s WATCHES OF SWITZERLAND trade mark for the following reasons. … The words contained in the Applicant’s Mark are identical to the words which comprise the Opponent’s WATCHES OF SWITZERLAND trade mark. It can readily be seen that these words are the essential feature of the Applicant’s Mark. Ordinarily, they are the only parts of the Applicant’s Mark that would be articulated by a person seeing the Applicant’s Mark. The graphic elements of the Applicant’s Mark are inconsequential – they are not essential features of the Applicant’s Mark. The word “of” is stylised, but it does not change the identity of this part of the Applicant’s Mark. The logo which appears in the top right hand corner of the Applicant’s Mark is peripheral and does not attract significant attention. It is no more than the letter “w” in a circle (perhaps depicting a watch face?) and, as such, is not an eye-catching part of the Applicant’s Mark. … The word elements of the Applicant’s Mark are of particular significance in assessing deceptive similarity. The Applicant’s Mark and the Opponent’s WATCHES OF SWITZERLAND trade mark are orally and aurally identical.
[9] Restating s.10 of the Act, although the added word “often” is a departure from the meaning of the section.
[10] By this, the Opponent means, I believe, the merely the words “Watches of Switzerland”.
The Applicant states in reply that:
A descriptor may acquire a secondary meaning if it includes an addition of something that will draw attention away from its natural meaning. That requirement was emphasised in S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd[11]. There the primary judge had considered the problem that the word “triathlon” itself was the name of a sport and descriptive of the contents of the two magazines in question. His Honour concluded, correctly in the opinion of the Full Court that the word “triathlon” was not of itself a word over which a monopoly of use could be asserted in the name of a magazine[12]. The Court said at page 589.35: “It is difficult to see how the name of a sport on its own could ever become distinctive of particular products of a person. No such suggestion is directly made in the present case. But no doubt the name of a sport, like the name of an article such as an opal, may be used as part of a get-up including a name such that it could become distinctive of a particular person's business or product. However, it will not be the name of the sport that creates the necessary distinctiveness to enable the circumstances to fall within s. 52. Rather it will be a combination of names or the get-up adopted which will bring about this result.”
[11] S & I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd 43 IPR 581.
[12] Ibid. at 584,[30]-[40].

In the time since the hearing this Office has decided the case of Cars on Demand IP Pty Ltd v Cars on Demand Limited [2014] ATMO 87 (16 September 2014) (“Cars on Demand”) which concerned an application under the Madrid Protocol to extend protection of the trade mark appearing below to Australia.
The opposed application covered class 39 services, being: “Transport services; vehicle rental and leasing”. The holder of the international registration was a UK company with plans to use the trade mark in Australia. The opponent in that case brought opposition under sections 43, 44 and 58 of the Act and claimed use for the same services in Australia of both the bare words “CARS ON DEMAND” and the device mark appearing below:
Those passages of the decision of Hearing Officer Kirov relevant to the matter before me are extracted below.
[on section 43]
In short, deception or confusion caused as a result of similarity to another trade mark is outside the scope of s 43. I would only add that I agree with Mr Covell that the Opponent’s submission in any event appears to overlook the significance of the descriptive nature of the words “cars on demand” in the context of hire car or similar services. As Mr Covell put it:
The three descriptive words “cars on demand’ are perfect for describing businesses which supply cars on demand to consumers. This connotation merely describes a feature of Class 39 services that concern the hire, rental or booking of vehicles which are available immediately upon request.
The Opponent’s Written Submissions do not acknowledge the obvious meaning of these descriptive words when considering the connotation of the Holder’s mark. Indeed, the meaning of these words is avoided altogether in the Opponent’s submissions.
The ground based on s 43 of the Act is accordingly not established.
[on section 44]
As noted in the Opponent’s submissions, s 10 of the Act defines the term “deceptively similar” as follows:
For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.
The Opponent’s submissions continue:
Any difference in appearance of the marks must be balanced against the “idea of the marks”. Jafferjee v Scarlett [1937] HCA 36; (1937) 57 CLR 115 where Latham CJ citing from Lord Herschell’s Committee’s report at pages 121 and 122:
Two marks, when placed side by side, may exhibit many and various differences, yet the idea left upon the mind by both may be the same, so that a person acquainted with a mark first registered and not having the two side by side for comparison, might well be deceived if [services] were allowed to be impressed with the second mark, in a belief that he was dealing with [services] which bore the same mark as that with which he was acquainted.
The Opponent submits that the shared “idea” of the trade marks is the feature by which they will be recalled – in this instance the words “CARS ON DEMAND” – rather than the precise details of each trade mark.
…
In response Mr Covell submitted that there was no authority for the proposition that “merely because the identical words [in this case the words “cars on demand”] are found in both marks ... [this] ipso facto lead[s] to a finding of deceptive similarity”. He pointed to the following relevant factors identified in IP Australia’s Australian Trade Marks Manual of Practice and Procedure at Part 26, paragraph 6.4, under the heading “Marks which contain another trade mark”:
A finding of deceptive similarity in wholly contained trade marks is not automatic and may depend on a number of factors. These include:
(a) The extent to which the shared element has retained its identity as an essential feature of the trade marks (See: Bulova Accutron Trade Mark [1969] RPC 102 (Ch D).

(b) The distinctiveness of the common element/s and the distinctiveness of additional element/s. If the additional element changes the idea of the trade mark, this may point towards a finding that the marks are not deceptively similar.

(c) The nature of the additional element(s) – if the additional element(s) is/are particularly distinctive then the marks will most likely not be deceptively similar, even though they share a common element. And vice versa – if the additional element has a low level of distinctiveness then the marks are more likely to be deceptively similar (See: Application by Coles Myer Ltd, (1993) 26 IPR 577, BRATS: BONZA BRATS)

(d) The meaning behind the trade marks – where an additional element changes the meaning of the trade mark or the concept behind it then the trade marks are less likely to be deceptively similar.

(e) The placement, within the trade mark, of the common and non-distinctive elements, including size of text and any other elements may provide a different context and consequently alter the overall impression of the trade mark.

(f) When both the common element and additional element are distinctive – each case will turn on its own facts. See BAREFOOT: BAREFOOT RADLER. E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 934 at 63 per Flick J.

(g) Consideration must be given to the surrounding context of the goods and services, such as methods of sale and common trade techniques. Are customers purchasing goods by name? How are the goods presented? Who are the consumers? (General or specialist?).
Mr Covell noted that points (a) and (f) were not applicable in this case because they only came into play where the common material was distinctive. He then went through the remaining points highlighting their applicability to the comparison of the Opposed Mark with the Opponent’s Device Mark. As regards points (b) and (c), he emphasised the distinctiveness of the device element and the tagline in the Opponent’s Device Mark and contrasted this with the distinctive device element and absence of a tagline in the Opposed Mark. He submitted that inclusion of the tagline was relevant to point (d). He also highlighted the differing font sizes and configuration of the various elements appearing in each of the marks, as well as the fact that the Opposed Mark was limited to a specific combination of colours, submitting these factors were each relevant to point (e). Finally, he noted that where marks containing identical descriptive phrases were being compared then point (g) indicated that the degree of sophistication of relevant consumers was a pertinent factor. In this regard he submitted consumers of the relevant Class 39 services were likely on the whole to be relatively sophisticated compared with, say, consumers of common grocery items or people looking to have their shoes repaired.
With that as background, as it were, Mr Covell’s principal submissions concerned the fact that the words “cars on demand” common to the parties’ marks are on the face of it apt for normal description of the Class 39 services of interest to the parties. To the extent that there was any likelihood of deception or confusion amongst some consumers this would surely be because the Opponent had sought to trade by reference to such a convenient, descriptive phrase and the Opponent should not thereby be entitled to a de facto monopoly in the bare phrase. In this regard he submitted that:
Although the Opponent seeks to rely on the doctrine of imperfect recollection, the Opponent does not consider the effect on that doctrine where the words in issue aptly describe car hire and car rental services in class 39. The High Court decision in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216 is directly relevant here. This concerned the use by two different traders of three descriptive words, namely, “building information centre.” In the leading judgment Stephen J noted at 229:
The use by the [plaintiff] of the three descriptive words was no doubt convenient. It thereby acquired a name which at the same time very clearly described its activities.
The same can be said of the current facts and the three descriptive words “cars on demand” and, accordingly, as held by Stephen J at 229:
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor's trade name will render the latter immune from action (Office Cleaning Services Ltd. v. Westminster Window and General Cleaners Ltd. (1946) 63 RPC 39, at p 42, per Lord Simonds). As his Lordship said (1946) 63 RPC, at p 43, the possibility of blunders by members of the public will always be present when names consist of descriptive words - "So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be." The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.
This has been cited with approval in numerous cases including Australian Postal Corporation v Digital Post Australia Pty Ltd (No 2) [2012] FCA 862 per Marshall J at [77]; Dimokranitis v Exotic Limo Pty Ltd [2010] ATMO 69 at 43; Kosciuszko Thredbo Pty Ltd v ThredboNet Marketing Pty Ltd where it was found at first instance, [2013] FCA 563, that where there was evidence of confusion between businesses using a geographic description, this was caused by the nature of the word itself and therefore the “... risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words....” Office Cleaning Services Ltd v Westminster Window & General Cleaners Ltd (1946) 63 RPC 39 at 42 per Lord Simonds. This reasoning was recently affirmed on appeal by the Full Court of the Federal Court [2014] FCAFC 87 at [32]- [34] per Siopis, Rares and Katzmann JJ.
In Dimokranitis v Exotic Limo the hearing officer noted at 44:
If there is to be confusion resulting from the applicant’s use, I am satisfied that it is more likely to result from the descriptiveness of the trade marks themselves than from any reputation the opponent may have in its trade mark.
I am in general agreement with Mr Covell’s submission.
The parallels between the Cars on Demand case and the present case do not require amplification. Moreover, it is fair to say that counsel in the present case made essentially the same submissions as those presented by the parties to Hearing Officer Kirov. I note, too, that whilst the Notice listed section 41 as a ground of opposition (particularized as: “the Opposed Trade Mark is not capable of distinguishing the Applicant’s goods or services”) that ground of opposition was not pressed at the hearing and, as in the Cars On Demand case, the meaning of the words, “watches of Switzerland”, is avoided altogether in the Opponent’s submissions.
Against the Opponent’s submission that confusion is virtually inevitable, the Applicant relies on the Hornsby Building case (op. cit., para 47 above) in making the submission that “quite small differences in a competitor’s trade name is likely to render the latter immune from action because the law recognises the possibility of blunders by members of the public when descriptive words are used by two traders as part of their respective trade names.” My understanding is that it is implicit in this submission that such is also the case when descriptive words are the sole common feature of the claimed trade marks.
The Applicant’s further submission is that:
The relevant class of consumers consists of prospective purchasers of luxury watches manufactured in Switzerland who are familiar with the opponent’s Watches of Switzerland retail business as one that sells luxury Swiss watches under a range of well-known brands, and who encounter the opposed mark on any of the Relevant Goods and/or Services. Relevantly, the consumer would not be familiar with the use of the opponent’s mark on any of the Relevant Goods as there is no evidence that the opponent has used the opponent’s mark on any of them.
In light of the not insignificant price of the Swiss made watches sold by the opponent, the reasonable member of that cohort would very likely be both sophisticated and discerning.
Further, the reasonable member of that cohort is likely to bring to bear to the aforesaid encounter, his/her imperfect knowledge of the opponent’s mark which is likely to focus on the Swiss flag integer because it carries with it the idea of an official endorsement.
Because of the message conveyed by the use of the Swiss flag its absence from the opposed mark is likely to be noticed leading to a more careful consideration of the opposed mark, in particular the WOS integer as the distinguishing feature. It is this feature that would draw the eye.
…
Taking all of the aforesaid into consideration, the applicant submits that this is an instance where the use of a descriptor mitigates against the possibility of the relevant consumer either being mislead or confused, especially as the application of a descriptor to a like business would not ordinarily mislead the public.
In the case of REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559 (‘REA’), Bromberg J stated at from para.[100] onwards:
Before going on to consider whether a not insignificant proportion of the ‘ordinary’ or ‘reasonable’ members of the relevant class were likely to have been misled or deceived, it is necessary to say something about the distinctiveness of the REA domain names which are used as the trading names for its residential and commercial property portals and to consider whether these names have acquired a secondary meaning.
…
That REA has established substantial brand recognition by consumers for its residential and commercial real estate portals is not in issue. Real Estate 1 conceded that by the use of the combination of the brand elements used to promote REA’s residential and commercial real estate portals, REA has developed a reputation in the Australian market. It was not suggested that the combination of those brand elements were not, in each case, sufficient to be distinctive of REA’s portal businesses.
Real Estate 1 relevantly contended that what REA had failed to establish was that the term “realestate.com.au”, when appearing on a search results page, had become distinctive of REA’s business. Given the specific nature of the impugned conduct expounded at trial (see further at [136]-[137] below), REA needed to establish that when “realestate.com.au” appeared in a search result, that term was distinctive of REA’s residential portal business.
It is difficult to establish that a descriptive name, as opposed to a concocted or invented name, is a name which has become distinctive of a trader’s business: Cellular Clothing Co Ltd v Maxton & Murray [1899] AC 326 at 336 (Earl of Halsbury LC). Whether a name is distinctive of a particular business is a question of fact and degree: Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139 at [19] (Chesterman J). A concocted name is far more likely to be distinctive of a business than a name which is based upon a description of the nature of the business that is being conducted: Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1985) 9 FCR 129 at 147 (Wilcox J). Whilst a name may at the same time be both descriptive and distinctive, the fact that a name prima facie retains its descriptive signification increases the difficulty of proving that it is distinctive of the goods of a particular business: Burberrys v JC Cording & Co (1909) 26 RPC 693 at 704 (Parker J); British Vacuum Cleaner Co Ltd v New Vacuum Cleaner Co Ltd [1907] 2 Ch 312 at 322-323 (Parker J); and South Australian Telecasters Limited v Southern Television Corporation Limited [1970] SASR 207 at 220 (Walters J).
In KettleChip Co Pty Ltd v Apand Pty Ltd [1993] FCA 546; (1993) 46 FCR 152 at 165-6, Burchett J stated:
“Of course, the mere fact that a word is descriptive does not warrant a trader in using it if it has also acquired a secondary meaning as to distinguish the products of a rival. As Lord Radcliffe said in de Cordova v Vick Chemical Co (supra) at 106:
‘To say that it is descriptive would not be enough, for...there is no absolute incompatibility between what is descriptive and what is distinctive. A descriptive word, such as ‘Sheen’, can be recognised in law as distinctive if the evidence clearly shows that it is distinctive in fact”.
In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2013] FCA 8 at [108] and by reference to the judgment of Lockhart J in Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals [1991] FCA 310; (1991) 30 FCR 326, Emmett J set out what is meant by the requirement that a term be “distinctive”. Whilst the analysis was given in the context of a trade mark case, it bears repeating here:
There must be a sufficient degree of distinctiveness to counterbalance the descriptive character of a word. A word that is prima facie descriptive may become distinctive in connection with particular goods but yet retain its descriptive meaning. However, the word must, to become distinctive, have a new and secondary meaning different from the descriptive one, and thus cease to be purely descriptive. Distinctive means that the mark distinguishes the registered proprietor’s goods from others of the same type in that market. However, distinctive does not mean that the goods must specifically identify the registered proprietor as the source of the goods. What is important is that a significant number of consumers in the relevant market identify the registered proprietor’s goods as coming from one trade source (Johnson & Johnson at 335-336).
As stated, there is no absolute incompatibility between what is descriptive and what is distinctive. Nonetheless, in this case the Opponent’s submissions confuse what might be distinctive from what is clearly descriptive. The Opponent would ask me to find a distinctive reputation in purely descriptive words. Further, it was put to me that:
(a) The words contained in the Applicant’s Mark are identical to the words which comprise the Opponent’s WATCHES OF SWITZERLAND trade mark. It can readily be seen that these words are the essential feature of the Applicant’s Mark. Ordinarily, they are the only parts of the Applicant’s Mark that would be articulated by a person seeing the Applicant’s Mark.
(b) The graphic elements of the Applicant’s Mark are inconsequential – they are not essential features of the Applicant’s Mark. The word “of” is stylised, but it does not change the identity of this part of the Applicant’s Mark. The logo which appears in the top right hand corner of the Applicant’s Mark is peripheral and does not attract significant attention. It is no more than the letter “w” in a circle (perhaps depicting a watch face?) and, as such, is not an eye-catching part of the Applicant’s Mark.
I disagree with both fundamental planks of that submission for the same reasons outlined in the Cars on Demand case – I disagree that the “words are the essential feature of the Applicant’s Mark” and I disagree that “[T]he graphic elements of the Applicant’s Mark are inconsequential – they are not essential features of the Applicant’s Mark.”
All of the evidence of a claimed reputation rests on use the WOS mark (as a whole). Not that section 60 relies on either of these findings, but I do not find the Trade Mark to be substantially identical to the WOS mark, nor do I find it to be deceptively similar to the WOS mark.

My consideration of the likelihood of confusion or deception for the purposes of section 60 is not helped by the declarations of Dimmock or Canestra.
Mr Dimmock is the General Manager of an unnamed “business that … sells luxury goods in Australia…”. He has worked closely with Mr van der Griend since 2002 and he “associates the name ‘WATCHES OF SWITZERLAND’ with Mr van der Griend’s business.” He declares that: “Throughout my 30 years experience in the watch industry, I have been exposed to approximately 60 luxury watch retailers. I do not know of, and cannot recall, any other company or trader in the Australian luxury watch industry, luxury goods industry or general retail industry that has born or bears the name ‘WATCHES OF SWITZERLAND’.” Put simply, that statement is not instructive.
Ms Canestra is the Chief Operating Officer of Richemont Australia Pty Ltd (“Richemont”). On the date of her declaration, 25 October 2012, she had worked in the watch industry for four and a half years. At the relevant date she had therefore worked in the industry for 3 and a half years. She declares that “[W]hen I see or hear the name Watches of Switzerland, I … instantly know that it means Mr van der Griend’s company.” Thereafter and before the following paragraph of her declaration is inserted prominently the WOS mark and so I read her statement as referable to that mark.
In that following paragraph Ms Canestra states: “As the name of the Applicant is identical to the name of the Opponent, if I saw the trade mark of the Applicant I would definitely think it was the [Opponent].
Those statements are either factually incorrect or reinforce my finding that it is only the WOS mark as a whole that might have a unique connection with the Opponent.
Additionally, I note that whilst the Opponent seeks to rely on the evidence of the CEO of Richement, at the same time Gresswell states that:
The [UK] business of [the Applicant][13] was acquired … in or about 2005 and it continues to promote only the finest Swiss brands under the [Trade Mark] including those referred to above [Rolex, Patek Phillipe, Girard-Perregaux], as well as other Richemont brands such as IWC … … we are Richemont’s largest customer.
[13] A business which can be traced back to 1924 when it was established in Ludgate Hill in London under the trading name, G&M Lane & Co (Watches of Switzerland).
Even if I were to disregard Ms Champion’s submission that Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348; 25 IPR 65 establishes that the issue of whether a mark is likely to deceive is for the delegate of the Registrar to determine and is not a matter for any witness to comment on, I do not find that the Opponent’s declarants in any way dissuade me from my finding that the likelihood of confusion or deception is low, or is otherwise merely the result of both parties using common descriptive words in their respective marks as described, for example, in the Sydney Building Information case already cited.
I accordingly find that section 60 has not been established.
Section 42(b)
Subparagraph 42(b) of the Act provides:
42Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
(a)…
(b)its use would be contrary to law.
As stated, the Opponent relies on section 18 and 29(1)(g) and (h)[14] of the ACL.
[14]Section 18 of the ACL is the prohibition on conduct which is misleading or deceptive or likely to mislead or deceive. Section 29(1)(g) prohibits the making of false or misleading representations that goods or services have sponsorship or approval. Section 29(1)(h) prohibits the making of false or misleading representations that the person making the representation has a sponsorship, approval or affiliation.
The Applicant reminded me that in Lumley Life Ltd v IOOF of Victoria Friendly Society (1989) 16 IPR 316 Lockhart J said (at 323-324):
The principles of distinctiveness and secondary meaning, developed in relation to passing off are also relevant to actions under ss 52 and 53. The proof of the existence of a misrepresentation in some form is central to all. Whether a name has acquired a secondary meaning or become distinctive of a particular producer’s product will have a direct bearing on whether the conduct in question is or is likely to mislead or deceive the relevant public.
Since the Opponent has not established that the use of the Trade Mark would be likely to deceive or cause confusion in terms of section 60, it follows that neither can it establish that the use of the Trade Mark would “mislead or deceive” under the ACL which is a higher standard. In Parkdale Custom Built Furniture Pty. Limited v Puxu Pty Limited [1982] HCA 44; (1982) 42 A.L.R. 1, Gibbs C.J. said (at page 6):
The words of s. 52 require the court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive . . . . . The words “likely to mislead or deceive”, which were inserted by amendment in 1977, add little to the section; at most they make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone. In McWilliams v. McDonalds [1980] FCA 159; (1980) 33 A.L.R. 394 it was rightly held by Smithers J. and by Fisher J. that to prove a breach of s. 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source, and that Southern Cross Refrigerating Co. v. Toowoomba Foundry Pty Ltd (1954) 91 C.L.R. 592, a decision on the Trade Marks Act 1905 (Cth) as amended, is distinguishable: I need not add to what their Honours said on this subject (33 A.L.R.) at 397-8 and 412-3. I agree too with those learned judges that the court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive, and that evidence that members of the public have actually been misled is not conclusive: see at 399-400 and 413-4. I would add that evidence that members of the public were misled, not by any conduct of the defendant, but by other circumstances for which the defendant was not responsible, would be quite irrelevant.
The opposition under section 42(b) is not established.
Section 58
Section 58 of the Act states that “The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark”. Layers of judicial gloss have been added to that apparently simple statement including a requirement that an opponent must show that a mark, identical to the applied-for mark, or one “substantially identical” thereto, was used for the same goods or services before the filing date[15].
[15] Or, as the case may be, the date of first use of the applied-for trade mark.
The Opponent made the bold claim that “the WATCHES OF SWITZERLAND trade mark has been used very extensively in connection with the WATCHES OF SWITZERLAND stores”, adding the comment that “the Opponent has used the WATCHES OF SWITZERLAND trade mark with a subordinate graphic element, but that does not materially alter the Opponent’s use of the words WATCHES OF SWITZERLAND as a trade mark”.
I repeat that the evidence does not show use of the words “watches of Switzerland” separate from the WOS mark, but the problem is deeper and, again, I cannot ignore the parallel with the Cars on Demand case where, on section 58, Hearing officer Kirov wrote:
I understand from the above quoted particulars from the Statement that the Opponent’s claim to ownership has two separate bases, that is based on its relevant prior use of (1) the claimed CARS ON DEMAND word mark and (2) the device mark shown in the above quoted particulars (being identical to the Opponent’s Device Mark minus the tagline “Keep Business Moving” and hereafter referred to as “the Opponent’s s 58 Device Mark”). The Opposed Mark is obviously not the same as either of these marks and the Opponent’s claim to ownership thus depends, as a threshold issue, on my finding that it is at least “substantially identical” to one or both of them. As discussed below, the Opposed Mark is not substantially identical to either mark in my view and thus the Opponent’s s 58 ground necessarily fails for this reason. Before discussing my reasons for so finding I think it is useful firstly to say something about the Opponent’s own claim to “ownership” of the bare words “cars on demand” themselves as a trade mark for relevant Class 39 services.
Hearing Officer Kirov then set out the opponent’s submissions as follows:
Section 58 provides for the registration of the [Opposed Mark] to be opposed on the ground that it [sic] is not the owner of the mark. For the purposes of s 58, “ownership” is common law ownership. McGarvie J said in the case of Settef S.p.A. v Riv-Oland Marble Co (Vic) Pty Ltd (1988) 10 IPR 402 [“Settef” at 414]:
The basic common law principle is that the first person who uses a trade mark of an appropriate type within a country becomes the proprietor of the mark there: Re Registered Trade Mark “Yanx”; Ex parte Amalgamated Tobacco Corp Ltd [1951] HCA 28; (1951) 82 CLR 199 at 203;Thunderbird Products Corp v Thunderbird Marine Products Pty Ltd [1974] HCA 51; (1974) 131 CLR 592 at 603; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73; (1984) 59 ALJR 77 at 83. A person who becomes proprietor of a trade mark in this way is entitled at common law to restrain a person who later commences to use the trade mark.
It is noted that it was the opponent’s own submissions in that case which describes the problem - “the basic common law principle is that the first person who uses a trade mark of an appropriate type” becomes the owner of that trade mark. These underscored words are crucial - neither “cars on demand”, nor “watches of Switzerland”, is such a “trade mark” in the context of the claimed goods/services.
Accordingly, the section 58 ground of opposition fails on three bases: (i) the words “watches of Switzerland” are per se incapable of taking on a trade mark life; (ii) they are, in any event, unused, abstracted from the WOS mark; and (iii) the WOS mark is not substantially identical to the Trade Mark for the reasons explained in Carnival Cruise Lines Inc v Sitmar Cruises Limited [1994] FCA 936; (1994) AIPC 91-049; (1994) 120 ALR 495, where Gummow J said:
When the decision is understood in this way, it does not supply any general authority for the proposition that in the case of disputed claims to proprietorship under the present statute anything less than substantial identity between the two marks will suffice. The phrase "substantially identical" as it appears in s. 62 (which is concerned with infringement) was discussed by Windeyer J in The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited [1961] HCA 75; (1963) 109 CLR 407 at 414. It requires a total impression of similarity to emerge from a comparison between the two marks. In a real sense a claim to proprietorship of the one extends to the other. But to go beyond this is, in my view, not possible.
Section 59
Section 59 of the Act provides:
Applicant not intending to use trade mark
The registration of a trade mark may be opposed on the ground that the applicant does not intend:
(a) to use, or authorise the use of, the trade mark in Australia; or
(b) to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services specified in the application.
The Opponent’s argument is simply that the Applicant’s evidence is silent as to any planned use of the Trade Mark in Australia. The Applicant’s submission is that:
The main thrust of the opponent’s arguments surrounding this ground of opposition focus on the fact that the evidence of the applicant does not deal with the use or prospective use of the opposed mark in Australia. It claims that this failure shifted the onus onto the applicant. That approach ignores the fact that the act of filing of a trade mark application is prima facie evidence of an intention to use the mark, and misconstrues how the onus operates. The onus is on the opponent to establish a prima facie case of lack of intention to use. It cannot satisfy that onus by simply saying “the applicant hasn’t said anything about its use or proposed use in its evidence in answer” as the only obligation the applicant has is to answer in its evidence in answer the issues raised in the evidence in support. No adverse inference can be drawn from the applicant’s silence on an issue that was not raised in the evidence in support.
The opponent has failed to meet the onus upon it.
77. I agree with the Applicant. On the basis of the evidence before me, the section 59 ground of opposition is without any foundation[16]. It has not been established.
[16] See Foxtel Management Pty Ltd v 111Pix.com Limited [2012] ATMO 29 for a recent overview of the law on this point.
Decision
78. Subsection 55(1) of the Act provides:
55 Decision
(1) Unless subsection (3) applies to the proceedings, the Registrar must, at the end, decide:
(a) to refuse to register the trade mark; or
(b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;
having regard to the extent (if any) to which any ground on which the application was opposed has been established.
Note:       For limitations see section 6.
79.     The Opponent has not to any extent established its opposition to registration.
80.     The trade mark application may accordingly proceed to registration one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal, if not discontinued, has been decided and that the disposition of the application be in accordance with the Court’s order or direction.
Costs
81.     Having been successful in this matter the Applicant is entitled to its costs which I award against the Opponent.
Debrett G. Lyons
Hearing Officer
Trade Marks Hearings
1 March 2015

[2015] ATMO 23

27 February 2015