Wayne Maurice Gibson & Jillian Louese Gibson v Photodisc, Inc

[1998] ATMO 47

TRADE MARKS ACT 1995

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

Re:      Opposition by PHOTODISC, INC to the registration of trade mark application number 706289 in the name of Wayne Maurice Gibson and Jillian Louese Gibson

Pursuant to the Trade Marks Act1995, trade mark application 706289 (shown above) was filed on 15 April 1996 in the names of joint proprietors Wayne Maurice Gibson and Jillian Louese Gibson (the applicants).  The application was accepted for registration in respect of the following goods in class 9

Computer software for accessing digital images on read-only-memory compact discs

Acceptance was advertised in the Australian Official Journal of Trade Marks on 20 March 1997.

On 20 June 1997, PhotoDisc, Inc., of Seattle, Washington, in the United States of America, (the opponent) opposed the application on the following grounds:

1.   The opposed trade mark is not capable of distinguishing the applicant’s goods and/or services in respect of which the opposed trade mark is sought to be registered from the goods or services of other persons

2.   The use of the opposed trade mark would be contrary to law

3.   The use of the opposed trade mark would be likely to deceive or cause confusion

4.   The applicant is not the owner of the opposed trade mark

5.   The opposed trade mark is substantially identical with, or deceptively similar to, one or more trade marks that, before the priority date of the registration of the opposed trade mark in respect of its particular goods or services had acquired a reputation in Australia, and because of the reputation of that other trade mark the use of the opposed trade mark would be likely to deceive or cause confusion

As per Part 5 of the Trade Marks Regulations 1995, both parties filed and served evidence. 

• The opponent’s supporting evidence is a single declaration, provided by Robert Chamberlain dated 13 January 1998, with Annexures “A” to “D”

• The applicant’s evidence in answer is a declaration made jointly by the applicants, Wayne Gibson and Jillian Gibson, dated 12 February 1998.

• The opponent’s evidence in reply consists of a second declaration by Robert Chamberlain dated 5 May 1998 with Annexures “A” to “T”.

Hearing Details

In accordance with the provisions of regulation 5.14, the Registrar appointed a hearing, which took place before me on 17 July 1998, in Sydney.  Mr Gerard Skelly of Spruson & Ferguson represented the opponent, PhotoDisc, Inc..  The applicants did not attend the hearing but lodged written submissions in the form of a statutory declaration (dated 6 July 1998) which I handed to Mr Skelly at the start of the hearing.

Background

The opponent describes itself as ‘the leader in digital stock photography’. It provides large collections of photographic images on compact discs. Purchasers can access these images and can use them at will as their own electronic data. The opponent describes its business as a ‘high quality digital photo source’ which provides software featuring ‘colour corrected, indexed images arranged in a user-friendly slide show.  These no-fuss images are ready for placement in advertising, publishing and presentations.  Each PhotoDisc volume contains hundreds of first-rate photos … all for much less than the cost of traditional professional photography, and in less time than scanning photos yourself.’

The opponent has been providing this service in Australia, in association with the photodisc trade mark since January 1993. That is some three years before the subject application was filed.   The Australian sales of these goods are in evidence and range from a modest $1700 in 1993 to $165,140 in 1995.  Sales have since continued to rise and by September in 1997 had, for that year, exceeded ¼ million dollars.  Worldwide sales have been considerably more. USA sales since 1991 are estimated as above $55 million_(US), and world wide sales are above $77 million_(US).  Goods bearing the trade mark have, says Mr Chamberlain, been extensively promoted in Australia.  They were, for example, promoted at the Adobe Graphics Show in Melbourne in September 1995, and at the Mac World Expo in Sydney in November of that year.  36,000 product brochures have been distributed, and advertisements have been published in a range of magazines.  In evidence, are advertisements in Publishing Essentials (of August/September 1995),  Desk Top Magazine (of June 1994 and August 1995) and Design Graphics Magazine (of July 1994 and October 1995).  These advertisements are directed to the Australian market. There has been extensive promotion in the United States.  Further, Mr Chamberlain reports, the opponent’s products have received four awards from a “MacUser  magazine”.  In 1992 the opponent took the “Best Visual Resources” award.  It won “Best New Visual Resource” twice, once in 1993 for its photodisc Volume 8, and again in 1994 for its photodisc Signature Series.  In 1995 it won Best New Graphics Resource for its photodisc  Object Series.  

The opponent filed an application to register the word photodisc in 1995 for a range of electronic apparatus. This application (651993) encountered objections to registration, and because additional evidence was required, and time was running short, this application, was allowed to lapse. In early 1997 the opponent filed fresh applications, including 732074 in class 9.  That application is now in the course of examination, but is deferred per the provisions of section 36. 

There is no evidence of any sales or promotional activities on the part of the applicants apart from the statement that their trade mark has been in use.

Submissions

Mr Skelly commenced submissions by indicating that the grounds relied on by the opponent were first, the claim for proprietorship, and second, the likelihood of deception and confusion resulting from the reputation developed by the opponent in its trade mark photodisc.

In the applicants’ written submissions they make no claim to a reputation in the subject trade mark. They simply declare that they intend to use the trade mark in association with viewing software which, they say, is provided free of charge to clients. This software enables them to access images, documents and text which have been archived to CD-ROM.  They attached to their submissions, copies of examiner’s reports issued on the opponent’s lapsed application (651993) and a pending application (732074) in class 9, both being for the word photodisc. These copies, I understand, are to give weight to the applicants’ argument that the term photodisc is apt for normal description, and is therefore not capable of distinguishing the opponent’s goods from the similar goods of other traders, and a term with no potential to deceive or confuse about respective trade origins.

The applicants do not take issue with the opponent’s material evidence, although they do challenge the relevance of the evidence, and they broadly allege that the Chamberlain statements are unsubstantiated.  They say they have no knowledge of the trade shows, and that they do not know of any significant advertising or promotion over the years 1995 - 1997. The applicants’ submissions themselves, however, are no more than unsupported allegations and therefore do not disturb the opponent’s evidence which, as Mr Skelly points out, has the material support of the Chamberlain annexures. 

I will mention here that in response to the applicants’ statement that they intend to use the trade mark in association with software (namely a compact disc) which is provided “free of charge” Mr Skelly raised the question of use.  Use, I note, is not one of the grounds of the opposition but the applicants put it in issue with their written submission.  Mr Skelly’s point is that trade is exchange for money’s worth and goods provided free are therefore not dealt with in the course of trade.  The provision of free goods, he says, is not use as defined under the terms of the Trade Marks Act 1995. It appears to me, however, that the applicants (like the opponent) are in the business of providing a digital imaging service.  Part of that service is the provision of information on compact discs.  The mere fact that they put no separate charge against the compact discs and the installing software does not mean that this equipment is not part of the commercial dealings.  It is commonplace for data processing services to charge according to the kind and extent of the data rather than on the basis of the medium which carries that data. If data is delivered to the consumer on a compact disc, then the disc constitutes a key part of the service, and must, I think, be regarded as a component of the trade. The same may be said for the installation program. In line with the reasoning of Justice Whitford, VISA Trade Mark, [1985] RPC 330, at 329, use of a trade mark in respect of these goods is to be distinguished from the kind of use proscribed in Hospital World Trade Mark [1967] RPC 595. His Honour says:

The relevant question must I think be: “does this applicant trade in these goods?” If he does and there is no other bar, he ought to be entitled to the protection of registration both in his own interest and the interest of the public.  The fact that he trades in the goods as part of a service is, in my judgment, wholly irrelevant.

I now turn to the grounds of opposition.

Section 58 - Ownership of the trade mark

The opponent’s first substantive ground of opposition is founded on section 58 of the Trade Marks Act, which reads:

58.  The registration  of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

The acquisition of proprietorship, or ownership, is dealt with in Settef S.p.A. v Riv-Oland Marble Co. (Vic.) Pty Ltd 10 IPR 402 at 413. The basic common law principle is that the first person who uses a trade mark within a country becomes the proprietor of that trade mark. Mr Skelly points out that there is no evidence of any use of the application mark. No evidence of use was submitted in the course of examination and none was provided in the course of the opposition. Further, the applicants do not challenge the opponent’s claim to prior use. The applicants’ proprietorship claim therefore derives from the making of the application and their rights to the mark, if registered, would commence on 15 April 1996. On the evidence of the Chamberlain declaration, the opponent demonstrated use of its trade mark photodisc in Australia in January 1993. There is no evidence of any earlier use by the applicants.

However, the trade mark used by the opponent is the word photodisc in ordinary type and without any additional features.  The opposed mark is the composite mark shown at the beginning of these reasons.  It consists of the hyphenated word photo-disk, in an arcuate form and shadowed font, above the descriptive expression ‘The CD ROM Photo Album’ and a decorative arabesque. This mark is clearly not the same as the trade mark the opponent has used. To establish prior use, the mark used by the opponent must be the same as, or at least substantially identical to the mark in question.  In Carnival Cruise Lines v Sitmar Cruises Limited (1994) AIPC ¶91-049 Gummow J confirmed this. With reference to The Shell Company of Australia Limited v Rohm and Haas Company (1949) 78 CLR 601, his Honour says:

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 s62……requires a total impression of similarity to emerge from a comparison between the two marks.

Mr Skelly referred me to three cases concerning proprietorship where the trade marks under consideration had been found to be substantially identical.  In the first of these, Kendall Co v Mulsyn Paint & Chemicals (1963) 109 CLR 300, the word trade marks polykin and polyken were found to be substantially identical. In the second, Warner-Lambert Co v Harel (1995) 32 IPR 189 the trade mark dermafilm was found to be substantially identical to a trade mark consisting of the word dermofilm together with a relatively small device of a stylised hand. The third was Contempo Pty Ltd v Signoles (1991) AIPC ¶90-770 in which the two trade marks being compared were composite marks containing the same word chipie together with a number of common features. Mr Skelly submitted that on the basis of these precedents, the opponent’s trade mark photodisc was substantially identical to the opposed trade mark.

After considering the two trade marks in the light of these precedents, I do not find that they are substantially identical.  If the comparison was between the hyphenated word photo-disk and the opponent’s trade mark photodisc, I would agree that the hyphenation and the replacement of the letter C by the letter K would not be sufficient to distinguish the two marks.  photo-disk and photodisc I would find substantially identical, as were polykin and polyken.  In Warner-Lambert Co v Harel (supra) the trade marks in dispute contained the words dermafilm and dermofilm in upper case type and the hearing officer found the addition of a relatively small, and nondescript device to the mark dermofilm did not significantly diminish the substantially identical nature of the marks. In the present case a side by side comparison of the two trade marks reveals more differences between them than the addition of a small and nondescript device.  The rendering of the dominant word photo-disk, while reasonably commonplace, adds something to the overall impression of the trade mark, and the location of the descriptive expression and the arabesque device under the word, give the mark a sense of shape which is lacking in the simple word mark photodisc, used by the opponent.  In the presence of these differences, comparison of the two marks does not lead to the “total impression of similarity” required for a successful proprietorship claim (see the words of Gummow J quoted above).  The third precedent referred to by Mr Skelly, Contempo Pty Ltd v Signoles, can be distinguished. The trade marks being compared there were both composite marks.  Each was composed on a triangular background and featured the word chipie and similar representations of a young man in a striped shirt. It was the sum of these similarities that resulted in an overall impression of identity. Furthermore, however, I decided Contempo Pty Ltd v Signoles some time before Carnival Cruise Lines v Sitmar Cruises Limited and, quite clearly, Carnival Cruise Lines is now the more compelling precedent.

Having found that the opponent’s trade mark photodisc is neither identical nor substantially identical to the opposed trade mark I must also find that the section 58 ground of opposition fails.

Section 60 - trade mark similar to a trade mark which has acquired a reputation in Australia.

The second major ground of opposition relies on section 60 of the Act, which 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 respect of those goods or services, had acquired a reputation in Australia; and

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

Mr Skelly submitted that if I should find that the two marks under consideration are not substantially identical, they are at least deceptively similar.  He referred me to the well known criteria in Pianotist Co’s App’n (1906) 23 RPC 774 at p777 pointing out that the test for deceptive similarity essentially comes down to the impression or recollection of the marks which would be likely to be retained by the prospective consumer. He pointed out that the essential feature of the opposed trade mark is the word photo-disk. This, he says, both visually and orally, is very similar to the opponent’s trade mark photodisc. I agree that the word photo-disk is the feature by which the opposed trade mark will be remembered and I am in no doubt that the close similarity between photodisc, the opponent’s mark, and photo-disk, the essential feature of the application trade mark, renders them deceptively similar.

The applicants’ submissions that photodisc is a purely descriptive term has relevance to the question of deception. It is clear from the opponent’s evidence that their compact discs are used to carry photographic images. The word ‘photo’ therefore appropriately identifies the content of the disc in just the same way as ‘education’ ‘games’ and ‘language’ identifies the contents of an ‘education disc’, ‘games disc’ or ‘language disc’. ‘Photo’ has long operated successfully to describe the contents of an album - and it is equally apt to describe the contents of a compact disc.  From this point, I think the applicants’ submission is that in respect of such a descriptive word, there can be no trade reputation.  The provisions of sub-section 41(6) of the Act, now however, recognise that purely descriptive marks may become distinctive through use.  But, for the purposes of a section 60 ground, it is not necessary to show that the trade mark is distinctive.  It is necessary only to show that, at the priority date, in the face of some established reputation in the opponent’s trade mark, the application mark would cause consumers to wonder whether there was a connection between the application trade mark and the opponent (see Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592).

The next question then, is whether, despite its descriptive character, the opponent’s trade mark photodisc had acquired such reputation in Australia before the date on which the application mark was filed  (15 April 1996).

The evidence of the Chamberlain declarations shows that the opponent has been in the field for some time before the applicants’ trade mark application.  The presence, in the main, is clearly in the international field, but there has been significant participation in Australia.  For goods of this kind, local sales are relatively modest. However, the opponent has been actively involved in major trade fairs, it has advertised its services in a number of publications directed to the domestic market and its success on the international stage has been reported in magazines for local distribution.  Then - a quite unusual and impressive feature of the evidence - there are the awards for excellence won by the photodisc products, from the “MacUsers magazine”. 

Mr Skelly submits that the very significant overseas use of the trade mark may also be considered in determining the degree to which the opponent’s trade mark has acquired a reputation in Australia.  There has been very substantial use in the United States since 1991.  Total sales in the United States of goods bearing the trade mark have amounted to over $55 million_(US) since 1991 with a total amount of over $4 million_(US) expended on advertising in the same period.  In this context he referred me to a recent Federal Court case (Campomar Sociedad, Limitada & Anor v Nike International Ltd & Anor [1998] 776 FCA (7 July 1998)). In his judgment, Justice Burchett commented on the recognition given by the courts to use in a foreign country when assessing the claims of persons who have an entitlement to marks overseas.  His Honour comments:

At the very close of the twentieth century, as international commerce is rapidly blurring the boundaries between countries, this point of principle is even more important than when it was first perceived.  It ought therefore be fully reflected in the decisions of the courts.

It is Mr Skelly’s submission that in a field where consumers are likely to be downloading digitised images from databases created and made available by overseas providers, the international boundaries do become blurred.  In such circumstances the effect of overseas use is more likely to impact on the acquisition of a reputation in Australia.

Taking into consideration promotion within Australia of the opponent’s trade mark photodisc and its use on digitised photographic images on CD-ROM, I am satisfied that the trade mark had a reputation amongst a significant number of persons by April 1996. In particular, I believe that this reputation would have been established among a significant number of the persons who make up the market for digital images and photographs.  Taking into account the medium in which such people would be accustomed to work, I agree with Mr Skelly that I should give weight to the fact that international boundaries are not what they used to be, and that in all probability, these people were likely to have felt the impact not only of the opponent’s Australian activities, but also the impact of its international success.   All told, I think the necessary reputation had been established and I find that at the date of filing, 15 April 1996, use of the application mark on the specified goods was likely to deceive or cause confusion.   The section 60 ground, therefore, I find is made out.

Decision

Of the two grounds relied on I have found that the section 58 ground fails but the opposition succeeds on the section 60 ground. I therefore refuse to register trade mark application 706289.

Costs

Mr Skelly applied for costs.  The opponent is successful, and is entitled to an award.  However, I note that the applicants’ evidence in answer was very brief, and the opponent’s evidence in reply went well beyond what could strictly be accepted as reply.  I consider that as a result, an award of costs excluding items 6 and 7 of Schedule 8 would be appropriate, and I make that award.

Helen R. Hardie
Deputy Registrar

30 September 1998