Wattyl Australia Limited v Orica Australia Pty Limited

[2003] ATMO 7

TRADE MARKS ACT 1995

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

Re:Opposition by Wattyl Australia Pty Limited to registration of trade mark application 847941(2) - TUSCAN EFFECTS - filed in the name of Orica Australia Pty Limited.

Date of Decision:	30 January 2003
Delegate:	Hearing Officer Geoff Purvis-Smith
Representation:	Opponent - Mr Eric Ziehlke of Chrysiliou Law Applicant - Mr Bruce Caine of counsel instructed by Phillips Ormonde Fitzpatrick
Decision:	s.41 ground of opposition allowed ss. 42, 43, 58, 59, and 60 grounds dismissed Costs awarded to the opponent

Background

On 25 August 2000, Orica Australia Pty Limited (Orica) applied for the following trade mark:

TUSCAN EFFECTS

The application sought registration in relation to the following goods in class 2: coating materials, paints, varnishes, lacquers, enamels, hardeners, powder coatings; thinners, thickeners; binding preparations for paints; pigments; wood stains; preservatives against rust and against deterioration of wood; colourants; tinters; mordants; dyestuffs; raw natural resins; metals in foil and powder form for painters, decorators, printers and artists; wall paper removing preparations.

The application was duly accepted and advertised in the Australian Official Journal of Trade Marks dated 4 January 2001.

Within the time allowed to do so, Wattyl Australia Pty Limited (Wattyl) lodged a notice of opposition to registration.

The matter proceeded through the evidentiary stages and came on for hearing before me, as a delegate of the Registrar of Trade Marks, on 27 November 2002 in Canberra.  Orica was represented by Mr Bruce Caine of counsel, instructed by Philips Ormonde Fitzpatrick.  Wattyl was represented by Mr Eric Ziehlke of Chrysiliou Law.

Evidence

The following evidence was filed and served by the respective parties:

Name	Date	Exhibits	Referred to as
Evidence in Support
Michelle Hopkins	12.09.01	Hopkins 1
Robert Kennedy	05.02.02	1 through 8	Kennedy 1
Robert Kennedy	05.02.02	RK1 through RK4	Kennedy 2
Evidence in Answer
Susan George	12.07.02	George
John Lyons	12.07.02	JL1 through JL12	Lyons
Evidence in Reply
Robert Kennedy	14.10.02	RKA	Kennedy 3

Grounds of Opposition and Findings

The notice of opposition set out 10 grounds of opposition. However, at the hearing Wattyl relied on only four grounds, and these rested primarily on sections 41 and 43 of the Trade Marks Act 1995 (the Act). 

Section 41
Section 41 provides:

Trade mark not distinguishing applicant's goods or services

41.(1) For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

Note 1:  For applicant and predecessor in title see section 6.

Note 2:  If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

(2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

Note:  For goods of a person and services of a person see section 6.

(3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

(4) Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so  distinguishing the designated goods or services:

(a) the Registrar is to consider whether, because of the combined effect of the following:

(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and
(c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons.

Note 1:  For goods of a person and services of a person see section 6.

Note 2:  Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

(6) If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
(b) in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

Note 1:  Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a)  the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

(b)  the time of production of goods or of the rendering of services.

Note 2:  Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

Section 17 of the Act defines a trade mark as follows:

... a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

Accordingly, a trade mark application must be rejected if the applied for trade mark is incapable of distinguishing the applicant's goods from those of other traders.  The trade mark may be inherently adapted to distinguish, may have become distinctive through past use, or may, because of the particular circumstances of the case, become distinctive in the future. 

The process to determine which, if any of these possibilities apply to the trade mark in question was set down by Branson J in Blount v Registrar of Trade Marks (1998) 40 IPR 498 at 504-505 and recently confirmed by Mansfield J in Philmac Pty Limited v The Registrar of Trade Marks [2002] FCA 1551. Branson J's approach confirmed that the Registrar is entitled to find:

(a)   that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and is capable, on that basis alone, of distinguishing the designated goods or services; or

(b)   that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or

(c)   that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of distinguishing the designated goods or services.

Each of these findings will result in a different consequence.  If the Registrar reaches conclusion (a), he must accept the application in accordance with subsection 33(1) of the Act.  If the Registrar reaches conclusion (b), the provisions of paragraphs (a) and (b) of subsection 41(6) apply.  Finally, if the Registrar reaches conclusion (c), the provisions of paragraphs (a), (b) and (c) of subsection 41(5) apply.

To determine whether the trade mark is inherently adapted to distinguish, one must have regard to the tests laid down in cases such as Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 per Kitto J, FH Faulding & Co Ltd v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537 per Kitto J, and Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177 per Wilcox J.

In Clark Equipment, Kitto J stated:

... the 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.

In Faulding, Kitto J rephrased the test in the following terms:

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

In Orica's submission, the test in Clark Equipment can be broken down to the three elements, namely:

1. the likelihood that other traders will want to use the applied for trade mark;

2. the motivation that those other traders will have in wanting to use the applied for trade mark; and

3. the use to which the other traders will wish to put the applied for trade mark.

In relation to the third element, Orica submits that the Clark Equipment test is clear in establishing that only non-descriptive, infringing use should be taken into account.  In other words, the only use to be considered is that which would lead another trader into conflict with the applied-for trade mark - for instance by using the relevant expression to give the false impression that its goods were in some way sourced from or associated with the applicant.  Use of the expression in a purely descriptive sense would not, in Orica's submission, lead to an infringement of the applied for trade mark, and therefore, is not to be taken into account in applying the Clark Equipment test.

Wattyl submits that Orica's submission is flawed in a number of respects, most particularly with regard to the application of the test to descriptive use.  I am minded to agree with the tenor of Wattyl's submission on this point.  My reasons for this are as follows.

Firstly, Kitto J did not apply the test in the way Orica suggests.  In Clark Equipment, when finding that the geographic name "Michigan" did not have the requisite present or future capacity to distinguish, his Honour stated:

[515] The consequence is that the name of a place or of an area, whether it be a district or a county, a state or a country, can hardly ever be adapted to distinguish one person's goods from the goods of others when used simpliciter or with no addition save a description or designation of the goods, if the goods of the kind are produced at the place or in the area or if it is reasonable to suppose that such goods may in the future be produced there.  In such a case, the name is plainly not inherently, ie in its own nature, adapted to distinguish the applicant's goods...

and

[516] But even allowing for the cumulative effect of these considerations it seems to me impossible to conclude that there is no likelihood of other traders, in the [517] ordinary course of their businesses and without any desire to get for themselves a benefit from the appellant's reputation, wishing in advertisements and otherwise to describe (e.g.) their power cranes from Michigan as Michigan power cranes. They may well wish by such means to take legitimate advantage of a reputation which they believe or hope that the State of Michigan possesses among Australians for the quality of its manufacturing products, and it would be contrary to fundamental principle to grant a registration which would have the effect of denying them the right to do so by using the name of the State. It is no answer to say that if registration be granted such a manufacturer may nevertheless describe his goods as "made in Michigan" or in some other ways indicate that Michigan is their place of origin. He is not to be excluded by the registration of a trade mark from any use of the word Michigan that he may fairly want to make in the course of his business. [emphasis added]

His Honour makes no mention of a need to show that the use would amount to an infringement.  On the contrary, the decision was based on the aptness or appropriateness of the use of the expression "Michigan" to describe the geographic source of goods or allude to some quality or attribute that the goods possess.  The fact that such use might or might not have been an infringement of the then appellant's trade mark was irrelevant at this stage of the inquiry. 

In Faulding, which was decided a year after Clark Equipment and notwithstanding an obvious similarity in the language used in the tests, Kitto J chose to omit any reference to infringement.  Instead, His Honour again relied on apt descriptiveness, and confirmed that, at this stage of the test, the legality of use is not to be taken into account.  He stated:

[556] The conclusion seems inevitable that at least by the year of the initial registration of the appellant's trade mark (1943) the word Barrier had caught on as a word peculiarly apt, according to its ordinary signification, for descriptive use in connexion with skin protective creams, so that any trader in such creams would be very likely indeed, in the ordinary course of business and without any improper motive, to desire to use the word in order to distinguish such creams in general from creams intended for other purposes. We have not to inquire, on this aspect of the case, whether or not the respondent began its use of the word with a view to appropriating to itself some of the goodwill which the [557] appellant had built up for its own product. What matters is that at all material times the word has had such a place in the vocabulary of persons concerned with skin protective creams that according to the principle which must be applied under the Trade Marks Acts the appellant cannot be allowed a monopoly of its use in connexion with such creams. [emphasis added]

Subsequent case law confirms the approach.  In Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417, Gibbs J found that other traders were likely to want to use the expression "Whopper" to describe the size of their goods. In Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) 47 IPR 579, 589, Wilcox J found that the expression "Cranberry Classic" was to be assessed in light of the likelihood that other traders "might well wish to use the laudatory word 'Classic' in conjunction with the identification of the juice used in their product" as a means of describing the nature and quality of the juice. In Blount Inc v Registrar of Trade Marks (1998) 40 IPR 298, Branson J found a trade mark incorporating the word "Oregon" and an oval device was insufficiently inherently distinctive to give the word "Oregon" a significance other than its ordinary geographic significance or its significance in respect of a particular kind of timber. Finally, in Philmac supra, Mansfield J concentrated on the extent to which the coloured insert to an agricultural pipe fitting might have inter alia, a descriptive/ornamental function.

As Wattyl submitted, my assessment is therefore to be conducted in the following terms: whether other traders are likely, without improper motive, to want or need to use the expression "Tuscan effect" to describe their goods or the use to which they can be put. 

For the reasons set out below, I am satisfied that both elements of the test are satisfied.  I am satisfied that (i) other traders want or need to use the expression "Tuscan effects" in relation to their products, and (ii) that they will do so without improper motive. 

Orica correctly submits that use, including purely descriptive use, which is motivated by the existence of the applied for trade mark, would fall foul of the "proper motivation" element of the Clark Equipment test.  In the present case, Orica argues that due to the extent of its sales and marketing of TUSCAN EFFECT and EFFECT paints, the expression TUSCAN EFFECT is now so closely associated with the applicant in the minds of consumers and the trade, that no other trader is reasonably likely to desire to use the expression in connection with their goods, without improper motive.  Specifically, Orica points to its average sales in the four years following the launch of the product in March 1998 - some 100,000 litres of paint at a retail value of approximately $11.00 per litre - to establish the reputation that its trade mark has amongst consumers and the trade. 

While the argument has some merit, I am not satisfied that it is made out in the present case.  I am not satisfied that consumers, when presented with the expression "Tuscan effect" will necessarily think of the applicant's product.  Nor am I satisfied that when consumers use the expression, they will necessarily be referring to the applicant's product.  Accordingly, I am not satisfied that other traders will necessarily use the expression only with improper motives.  My reasons for this are set out below.

In determining the extent to which other traders might wish to use the expression "Tuscan effects", I have kept in mind the principles raised in cases such as British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281, 286 and 302, Blount supra at 509 and ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193, 233-234. While the latter case involved a discussion of s.60, the general tenor of Lockhart J's findings can be applied to the present situation. Here, Orica is in effect asserting that consumers and the trade are likely to be cognisant of its connection with TUSCAN EFFECTS paint - a reputation of sorts. Lockhart J stated, at 234:

The real question is whether the owner of the goods has established a sufficient reputation with respect to his goods within the particular country in order to acquire a sufficient level of consumer knowledge of the product and attraction for it to provide custom which, if lost, would likely to result in damage to him. This is essentially a question of fact.

In the same way, I believe that it is appropriate for Orica to establish, as a question of fact determined on the balance of probabilities, that the expression "Tuscan effects" does enjoy the association or connection which Orica asserts. 

It is not, I accept, necessary as a matter of law for a statistically sound market survey be undertaken and presented in evidence.  However, the applicant's case is to be assessed in the light of any evidence tending to the establish a contrary position and the absence of any evidence which the applicant might reasonably be expected to obtain in all the circumstances of the case - per Branson J in Blount at 509. 

Here, the overall impression of the evidence is that expressions such as "Tuscan effect" and "Tuscan style", as well as expressions which allude to the "look" of Tuscany or a Tuscan villa are in common usage.  Each expression is largely interchangeable with the other and means the same thing.  I am satisfied that the expression was one that was in use prior to the launch of the TUSCAN EFFECTS range and it was and remains a natural and ordinary way for one to describe a style of decorating which is reminiscent of Tuscany.  The applicant's own evidence, in the form of Ms George's declaration and Exhibits such as JL-3, 4 and 8 confirm this. I believe that from the late 1990s, the "Tuscan" style became more popular.  There is nothing before me to suggest that this was anything other than a cyclical trend, rather than the result of Orica's product coming on to the market.  On the balance of probabilities, I believe that Orica may have been the first to recognise the potential of a range of "Tuscan" style paints, but this does not, without more, establish some right to claim invention or proprietorial right to use of the expression.  Applying the Blount test, I do not believe that it would have been unreasonable for Orica to have obtained independent survey or declaratory evidence to demonstrate that there was a correlation between the launch of the TUSCAN EFFECTS paint and an upswing in the popularity of the Tuscan style.

I am therefore, not prepared to find on the balance of probabilities that the style has become popular as the result of the applicant's product or endeavours - the expression is one which falls within the "common heritage" to which Kitto J referred in Clark Equipment.  Nor am I prepared to find that consumers, when they use the expression "Tuscan effect" are alluding to the applicant's product.  Rather, they are referring to a style of decorating.  In my opinion, this means that other traders may legitimately wish to use such common and accepted language to describe their goods, the goods' attributes, or the uses to which the goods  can be put.  It is no answer to this for Orica to say that other, equally appropriate expressions such as "facade", "facade wash", "wash", "finish" or "textured finish" are available to other manufacturers when these are not the expressions used by consumers and the trade to describe a certain look.  The mere fact that an applicant has been the first to seek to fence in the common does not, of itself, establish its right to register that expression as a trade mark.

Finally, there is no evidence before me that other traders have in fact, or will in the future, seek to apply the expression "Tuscan effect" to their product with improper motive.  The mere fact that one or two might apply the expression in bad faith does not mean that all traders will. The remedy against an improperly motivated trader does not lie in the registration of a common expression as a trade mark.  Rather, the remedy may be pursued under relevant laws, including consumer protection legislation and the common law relating to passing off.  

Accordingly, I am not satisfied that the applied for trade mark is to any extent inherently adapted to distinguish the designated goods from those of other traders. I must therefore consider whether the provisions of s.41(6) should be applied. In doing so, I must have regard to the extent to which Orica has used the trade mark in the period between the product launch and the application date - pre Branson J in Blount supra at 508. The evidence before me establishes that, in the four years between March 1998 and July 2002, average sales of TUSCAN EFFECTS paints amounted to 100,000 litres, with a retail value of approximately $1.1 million. The evidence also shows that the applied for trade mark has been extensively used in marketing the product - both on the cans and displays in retail outlets and advertising material such as brochures and a video. However, none of this evidence is provided in a form which allows me to ascertain the extent of use before the priority date. Nor is there any survey or independent declaratory evidence which sets out the extent to which the applied for trade mark distinguished the relevant goods as those of the applicant in the period prior to the application being filed. Accordingly, the provisions of s.41(6) cannot be made out or applied.

The opponent's grounds of opposition which rely on s.41 are therefore made out.

Section 43
Section 43 provides that registration may be refused if, because of some connotation that the trade mark (or a constituent part of the trade mark) has, the use of the trade mark is likely to deceive or cause confusion.

T.G.I. Friday's Australia Pty Limited v TGI Friday's Inc. [2000] FCA 720, confirms that the connotation must be in the mark itself, and cannot be determined as the result of external considerations, such as reputation.

The standard to be applied when testing for deception or confusion was set down by French J in Registrar of Trade Marks v Woolworths (1999) AIPC 91-499 at 39,695 (paragraph 43). In considering the phrase "likely to deceive or cause confusion", his Honour said:

The use of the word 'likely' in this context does not import a requirement that it be more probable than not that the mark has that effect.  The probability of deception or confusion must be finite and non-trivial.  There must be a 'real tangible danger of it occurring'. 

Here, Wattyl alleges that consumers are likely to be deceived or confused on the basis that they will believe the TUSCAN EFFECT paint actually originates from Tuscany.  For the reasons I have already provided, I believe that consumers, when presented with the applied-for trade mark will believe that the goods can be used to achieve a Tuscan look.  I do not believe that there is a real tangible danger of consumers believing that the goods are sourced from Tuscany or Tuscan ingredients.

This ground is dismissed.

Balance of Grounds
Further grounds based on ss. 42, 58, 59, and 60 were claimed in the notice of opposition, but not addressed by Wattyl at the hearing.  Wattyl also requested that the I exercise my discretion as a delegate of the Registrar of Trade Marks to find that some other, unspecified ground be allowed.  Again, this ground was not addressed at the hearing. On the basis that there appears to be no evidence or reason on which to find the grounds have been made out, I dismiss them.

Determination and Costs

I am satisfied that the ground based on s.41 has been made out, and as a result, the opposition is successful. The application for registration is refused.

Both parties have sought their costs.  The usual course is to award costs to the successful party.  However, during the course of his submissions, counsel for Orica requested that I consider the conduct of the opponent in determining what, if any, costs should be awarded.  Specifically, counsel drew my attention to the fact that, despite having claimed a multitude of grounds in the notice of opposition, Wattyl effectively abandoned all but three grounds.  The grounds that relied on ss.58, 59, 60 and 42 were all abandoned at the hearing, without prior warning to Orica.  Accordingly, Orica's representatives quite appropriately prepared the case on the basis that they would be required to each of the grounds set out in the notice of opposition.  There was no explanation by Wattyl's representative of why it had not informed the applicant that it did not intend to pursue the majority of the grounds.

In the circumstances, I accept that the opponent would normally be entitled to its costs.  However, I also accept that the applicant, while it has lost in the end, was put to time and expense in preparing submissions and evidence on each of the grounds. On the other hand, there is nothing before me to indicate that the applicant did anything to ascertain which of the grounds would be pursued.  There is no evidence of a request being made, or any telephone conversation.  Nor is there any evidence that the request was refused, reasonably or otherwise.

In the absence of such evidence, and given that neither side took what appear to be relatively simple steps to clarify the grounds prior to the hearing, I see no reason to stray from the usual orders. I direct that the applicant pay the opponent's costs in accordance with Schedule 8 of the Trade Marks Regulations 1995.

Geoff Purvis-Smith
Hearing Officer
Trade Marks Hearings
30 January 2003