Wendy's International Inc v Wendy's Supa Sundaes Pty Ltd

[2001] ATMO 30

TRADE MARKS ACT 1995

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

Re:Opposition by Wendy's International Inc. to the registration of trade mark application numbers 660203 and 673385 in the name of Wendy's Supa Sundaes Pty Ltd.

Background

Application numbers 660203 and 673385 were filed, on 4 May 1995 and 25 September 1995, respectively, in the name of Wendy's Supa Sundaes Pty Ltd (the applicant).  The applications were for the registration of the trade mark as shown below (in the case of 660203) and the word WENDYS (in the case of 673385).

The specifications of goods covered were, respectively:

1. "Icecream, sundaes, icecream and soft serve iced confections, ice cream and soft serve cones, flavoured ice, ices, milk ices, fruit ices, frozen carbonated beverages, and all other ice confections included in this class; hot dogs; and doughnuts", in Class 30.

1. "Paper, cardboard and goods made from these materials, including paper cups, paper cone holders, paper bags and printed material", in Class 16,

"Milk and milk drinks, yoghurt and yoghurt drinks, hot milk based drinks, cream, jellies, jams and fruit sauces", in Class 29,

"Icecream, sundaes, icecream and soft serve iced confections, icecream and soft serve cones, flavoured ice, ices, milk ices, fruit ices, frozen carbonated beverages, and all other ice confections included in this class; hot dogs; and doughnuts", in Class 30,

(673385)

(continued)"Soft drinks, non-alcoholic carbonated drinks and sodas, fruit juice and fruit drinks, mineral and aerated waters, syrups and other preparations for making beverages", in Class 32, and

Restaurant, snack bar, coffee shop, icecream parlour, cafe and catering services, all relating to the provision of food products and beverages being icecream, sundaes, icecream and soft serve iced confections, icecream and soft serve cones, flavoured ice, ices, milk ices, fruit ices, frozen carbonated beverages, and other ice confections; jellies; hot dogs; doughnuts; soft drinks; non-alcoholic carbonated drinks and sodas; fruit juice and fruit drinks; and mineral and aerated waters; milk and milk drinks; yoghurt and yoghurt drinks; and/or hot milk based drinks", in Class 42

Following examination, the trade marks were advertised as being accepted in the Australian Official Journal of Trade Marks of 14 August 1997 (660203) and 21 August 1997 (673385), respectively.  On 9 December 1997, following the granting of extensions of time within which to do so, Wendy's International Inc. (the opponent) filed notices of opposition to the trade marks' registration.  These notices of opposition each listed a number of grounds.  The opponent's counsel advised at the hearing set down to decide the matter that the opponent was not abandoning any of the grounds listed.  However, the only one on which he made submissions was that under s.44 of the Act.  Thus, that ground is the subject of this decision and the reasons for it.

Both parties requested a hearing in the matter and it came before me, as a delegate of the Registrar, in Canberra on 31 January 2001.  Representing the opponent at the hearing was Mr Anthony Franklin of Counsel, instructed by Baker & McKenzie.  Appearing on behalf of the applicant was Mr Bruce Caine of Counsel, instructed by Mr Craig Vinall of Madderns.

The Evidence

Declarant	Dated	Exhibits	Type
Raymond W. Baker	20 November 1998	RWB-1 to RWB-5	Support
Geoffrey Kent Davis	25 November 1999	GKD-1 to GKD-35	Answer
Ross Winston Tisch	19 December 1999	Nil	Answer
Ian Edward Newton	20 December 1999	Nil	Answer
Laraine Finlay	21 December 1999	LF1	Answer
Rohan Charles Singh	9 June 2000	RCS1	Reply
Craig Laurence Vinall	18 August 2000	Nil	Further

The opponent is an American company which has been selling restaurant franchises internationally, under the trade mark WENDY'S OLD FASHIONED HAMBURGERS and others, since 1969.  It also owns the Australian trade mark registrations WENDY'S and WENDY'S HAMBURGERS QUALITY IS OUR RECIPE and device, in various Classes, including 29 and 42.  Some of these registrations date from 1975 and applications for the registrations of the opponent's various WENDY'S marks continued throughout the 70s.  It opened its first restaurant in Australia, through a franchisee, in March 1982.  However, it appeared to go out of business in this country during 1985.

The applicant first started trading in Adelaide in July 1979 and, by mid 1982, was operating 18 WENDY'S SUPA SUNDAES outlets around Australia. It filed its first trade mark application for that name in September 1979 and further applications were made in 1982. These applications were accepted under the provisions of s.34(1) of the Trade Marks Act 1955, on the basis of their honest concurrent use with the opponent's registered trade marks.

There was some ongoing conflict between the parties, in relation to their respective sets of marks, including that the applicant here made applications for the removal of the opponent's registered marks on the grounds of non-use.  After the opponent's opening of its first restaurant, in March 1982, that party was approached by the applicant regarding potential conflict because of its use of a mark containing the word WENDY'S.  Following this, there was some exchange of correspondence between the parties, which then resulted in a co-existence agreement in late 1982.  This document's purpose was to clarify each party's respective rights in relation to the word WENDY'S.  What was intended in this "agreement" by each party, with respect to what would be sold in the respective outlets, forms the basis of the present dispute.

Submissions and analysis
The notices of opposition, as filed, each listed 13 opposition grounds.  As far as I can see, the evidence, although directed to the ground under s.44 of the Act, did not clearly support any of the other grounds stated.  Mr Franklin, for the opponent, also did not make any submissions in relation to them.  Notwithstanding this, as I have already said, he did say that the opponent was not abandoning any of those other grounds but would be relying "mainly" upon the ground under s.44.  Mr Caine, on behalf of the applicant, said in reply that such a practice, where an applicant was faced with a wide number of grounds, only to find that only one or two grounds were pressed at a hearing, was an abuse of process.  He said that the applicant here had been forced to prepare a case to answer all of the grounds listed in the notice of opposition and that this had added unnecessarily to its costs.

It is the case that many notices are opposition are filed which include a broad range of grounds of opposition, including some cases where all, or most of the grounds shown in Division 2 of Part 5 of the Act are relied upon. The notices here fall into that category.  It is also true that, in most cases, it becomes obvious from the evidence in support what grounds will be pursued by the opponent at the final hearing.  However, as claimed by Mr Caine here, it may not always be apparent what course the opponent will pursue in the matter and an applicant may be forced to prepare submissions to counter all of the claims made in the notice of opposition in order to protect its position.  The Registrar is always concerned about minimising costs for all parties and making the most efficient use of time at hearings, while allowing both sides the fullest of opportunities to present their cases.  To this end, it has become the practice for a Support Officer in the Hearings Section to send a letter to an opponent, before the substantive hearing, seeking their cooperation in notifying the applicant of the grounds of opposition that will be referred to in submissions.  The opponent is also advised in this letter that, if the hearing is protracted due to failure to abandon grounds that are clearly untenable, then this may have a bearing on the extent of any award of costs.  Such a letter was sent by facsimile to the opponent here before the hearing.

In the light of all of this, I have reviewed the oppositions and cannot find that there has been established a prima facie case for the applicant to answer - except in relation to the s.44 ground.  Consequently, I find that the oppositions, as they are based on any grounds other than that section, are unsuccessful.  I will consider the effect on costs in the matter, if any, due to the non-abandonment of the broad range of grounds not supported by the evidence or submissions, at the end of this decision.

Section 44
In so far as is relevant to the present oppositions, s.44 of the Act reads:

Identical etc. trade marks

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

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

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

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

Note 1:  For deceptively similar see section 10.

Note 2:  For similar goods see subsection 14(1).
Note 3:  For priority date see section 12.

[Section 44(2) is in similar terms and relates to trade marks in respect of services].

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

(a) that there has been honest concurrent use of the 2 trade marks; or
(b) that, because of other circumstances, it is proper to do so;

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

Note:  For limitations see section 6.

In relation to this ground, The opponent has said that the subject trade marks are either substantially identical with or deceptively similar to a number of prior registered trade marks owned by it, which include the name WENDY'S, for the same or similar goods or services.  It has submitted further that, despite the present trade marks being accepted under the provisions of paragraphs 44(3)(a) [660203] - because of honest concurrent use; and 44(3)(b) [673385] - because of "other circumstances", there are goods and services, covered by the present applications, which fall outside the November 1982 agreement between the parties and that, accordingly, the conditions of their acceptance under s.44 are no longer valid.

The tests to determine whether trade marks are substantially identical or deceptively similar are conveniently laid out in such cases as Australian Woollen Mills Ltd v F. S. Walton & Co Ltd (1937) 58 CLR 641, and Shell Co of Australia v Esso Standard Oil (Australia) Ltd, (1961) 109 CLR 407, where, in the latter case, Windeyer J said, at 414, in relation to substantial identity:

(the marks should) be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison,

The prior registered trade marks, which Mr Franklin at the hearing, alleged the present applications are either substantially identical with or deceptively similar to are:

292380(29)

Meat, fish, poultry and game, meat extracts; preserved, dried and cooked fruits and vegetables; jellies, jams; eggs, edible oils and fats, preserves, pickles

315432(16) - WENDY'S

Printed matter, paper and paper products including but not limited to stationery, napkins, wrapping paper, paper sacks, condiment containers, restaurant displays and promotional materials, all being in this class

320713(30) - WENDY'S
  Coffee, tea, ice cream confections, sauces and sandwiches for food

320698(32) - WENDY'S

Beer, ale and porter; mineral and aerated waters and other non-alcoholic drinks; syrups and other preparations for making beverages

328788(42) - WENDY'S

Restaurant and carry out (take away) restaurant services excluding restaurant and carry out (take away) restaurant services dealing with the sale of yoghurt, milk and dairy products, ice cream and soft serve iced confection

In my opinion, the word WENDYS, covered by application number 673385, although differing in the apostrophe is, when Windeyer's test is applied, close enough to all of the opponent's registered marks listed, to be considered substantially identical to all of them - save that under 292380(29).  However, that is obviously not the case when the opponent's WENDY'S marks are compared with the composite mark covered by application number 660203 - repeated here for ease of reference.

There are, here, quite distinct differences and I believe that this trade mark and the opponent's marks are not substantially identical.

In relation to deceptive similarity, Windeyer J went on to say, at 415, supra:

The marks are not now to be looked at side by side.  The issue is not abstract similarity, but deceptive similarity.  Therefore the comparison is the familiar one of trade mark law.  It is between, on the one hand, the impression based on recollection of the plaintiff's mark that persons of ordinary intelligence and memory would have; and, on the other hand, the impressions that such persons would get from the defendant's television exhibitions.

Section 10 of the Act defines a trade mark as being deceptively similar to another trade mark if it so nearly resembles that mark that it is likely to deceive or cause confusion.  Consideration should also be given to a normal person's impression based on a recollection of the opponent's marks.  In this regard, Luxmoore, L.J. expounded the test referred to as the doctrine of "imperfect recollection" in Rysta Ltd.'s Appn. (1943) 60 RPC 87.

I think that, once this latter test is applied, then it is the case that the memorable portion of all of the marks is the word WENDYS - with or without the apostrophe.  The other material in the respective parties' device marks is not particularly remarkable.  In the case of application number 660203, word Wendy's dominates the mark, while the device is suggestive of ice cream - some of the goods in the specification.  With respect to the mark under the opponent's registration number 292380, the most prominent feature is the word WENDY'S - the portrait device and other words, eg OLD FASHIONED, being of lesser importance.  Notwithstanding this, I think that, when the respective parties' composite marks are compared with each other, the devices are enough to differentiate them - despite the presence of the common word.  Therefore, it is reasonable, I think, to infer that the applicant's composite mark is deceptively similar to all of the opponent's registered marks, except that covered by registration number 292380.

Without exhaustively scrutinising each set of goods and services covered by the present applications and the opponent's registrations, it seems to me that it is commonly agreed by both parties and the acceptance officer here, that some of the goods and services covered by the trade marks at issue are similar to, or closely related to each other.  This is illustrated by the opponent having specifically excluded the provision of yoghurt, milk and dairy products, ice cream and soft serve iced confection from the Class 42 restaurant services of several of its registrations, and the acceptance of the present applications under the honest concurrent use provisions of s.44 of the Act.

From the evidence, the course of events in relation to the co-existence agreement seems to have been that, after some initial correspondence and discussion between the parties, the applicant sent a letter to the opponent, dated 4 August 1982.  This letter sought "to confirm and to further" the matters previously discussed, specifically that the two companies would agree to coexist on the Australian market, each marketing its "respective range of products" and that neither company would "trespass into the other's range of products".  Additionally, the applicant sought an agreement that the opponent would not trade in, "Supa Sundaes", "Cones", "Sundaes" and "freshly prepared fruits".  The applicant also attached a copy of its current menu, "which (gave) an indication of the kinds of product now comprised within those headings".  It further said that it envisaged that it may, "from time to time add to or delete or vary the products, but those general headings will continue to hold good".  It is worth noting here that the menu, marked as "effective 20/7/82" and attached to the letter, put into evidence by the applicant as GKD30 to Mr Davis's declaration, does include "Hot Dogs" and "Donuts" - albeit separately listed from the four headings previously quoted.  The applicant further said that, in return for this undertaking, it would agree not to trade in the "hamburger market".

In a letter in reply, dated 1 November 1982, the opponent sought to extend and clarify the term "hamburger" to include, "chicken hamburgers (sic), fish, roast beef, and any other filling possible to ensure that the product remains a hamburger as such".  The applicant's reply, on 4 November 1982, again set out the four headings which it sought to specify as being in its domain and referred to another "current menu" - which was not attached to the copy of the letter in the evidence.  The applicant also again undertook not to "trade in the hamburger market".

On 10 December 1982, the opponent sent a letter to the applicant confirming the "arrangements made and the understandings reached" between the parties.  It agreed not to trade in (goods under) the applicant's four headings and noted that the copy of the applicant's current menu "(20/7/82)" set forth "those kinds of products now comprised within the aforementioned general headings".  It reiterated the list of hamburger associated items which the applicant had agreed not to trade in, although it did insert a comma between, "chicken" and "hamburgers", and also substituted the word "sandwich" for "product".  On 13 January 1983, the applicant replied, acknowledging that the letter of 10 December 1982 "serves as confirmation" between the parties.  The opponent has also said, in its evidence in support, that the 10 December 1982 is the relevant date of the agreement.

From that time until the commencement of the present conflict between the parties, both sets of WENDYS/WENDY'S marks have remained on the Register for different statements of goods or services, seemingly without any intrusion upon the other's interests.  However, the status quo was breached, according to Mr Franklin, with the inclusion of the words "hot dogs", "doughnuts" and " frozen carbonated beverages" in the specifications of goods and services covered by the applications here.  The use of the marks, in relation to these goods and services is, according to him, outside the co-existence agreement and accordingly not honest concurrent use.  In rebuttal, Mr Caine has said that although the opponent had agreed not to trade in the type of products covered by the four ice cream/fresh fruit related headings, the applicant had merely consented to refrain from trading in the hamburger market.  He said that the term "hamburger" had been clarified but that no mention had been made of hot dogs or donuts.  Additionally, he said, the product defined as " frozen carbonated beverages" had not been well known or widely sold in Australia at the time of the agreement but that it was entirely consistent with the type of goods that were sold by the applicant at that time.

The present applications were accepted for registration, under the provisions of s.44, on the basis of "honest concurrent use" and also "other circumstances".  I have reviewed the evidence provided for the acceptance officer's consideration in those respects and his reasons for applying the provisions of s.44 in accepting them.  Having done so, I can see no prima facie reason to overturn the acceptances which were granted on that basis.  As I have said, even the opponent seems to agree that the marks can peacefully live together - so long as the present statements of goods and services do not contain hot dogs, donuts, or frozen carbonated beverages.

From all of this, it would seem to me that this entire dispute has its roots in what was intended by both parties in the original agreement between them - including which Wendy's Supa Sundaes menu was the one which indicated the scope of goods that the applicant was selling on 20 July 1982.  Also relevant here, I believe, is whether hot dogs, donuts and frozen carbonated beverages can be inferred as belonging to the "hamburger market".  It is the case that the relevant date which both parties agree is that of the agreement is 10 December 1982.  The copy of the letter documenting the agreement, put into evidence by the opponent and exhibited to Mr Baker's declaration, does not include a copy of the applicant's "current menu (20/7/82)".  The copy of the agreement, included with Mr Davis's declaration in the applicant's evidence in answer, also failed to include a copy of the relevant menu.  However, a menu referred to as "effective 20/7/82" and said to be used by the "(applicant's) stores in the Marion Shopping Centre" in South Australia, was separately included as exhibit GKD4 to Mr Davis's declaration.  This menu includes donuts and hot dogs, besides the four ice cream/fresh fruit headings - and also prepared cold milk and fruit drinks.  Another menu, from late 1982, was also included in the evidence as GKD5 and includes hot dogs but not donuts.  This menu was said, in the applicant's evidence, to be the one on sale at the "majority of the (applicant's) stores" at that time.  However, the evidence goes on to say that there were variations in the product range offered at different stores, with some "managerial discretion" as to whether certain goods were sold in some stores.  Again, from the evidence, it appears that hot dogs and donuts were sold by some of the applicant's stores from early in the piece.  This is shown by a copy of a photograph, said to be of the applicant's Toombul store and taken "sometime in mid 1980", where the signage includes "HOT DOGS" and "FRESH CAKES".  Additionally, the applicant's evidence shows some other instances where at least hot dogs were advertised for sale at some of the applicant's outlets from early in the 1980's, including "The best darn dogs in town!" in a newspaper advertisement on 8 April 1980; and a photo of "Wendy's store image 1979 - 1982", which shows hot dogs offered for sale at a typical Wendy's Supa Sundaes store.

Nevertheless, it is the menu dated 20 July 1982 which formed the basis of the agreement between the parties here, and both hot dogs and donuts were included in that list.  I note, from the agreement, that the opponent did agree not to trade in the four ice cream/fresh fruit groups and that the menu of 20 July 1982 "...set(s) forth those kinds of products now comprised within the aforementioned general headings." (my emphasis).  I concede that the items, "hot dogs" and "donuts" do not reasonably fall into those categories - although it arguable that the item " frozen carbonated beverages" could be inferred as being within the then theme of the applicant's activities.  The applicant's undertaking, in return, was simply that it would not "...trade, or permit any franchisees or licensees to trade, in the hamburger market."

Mr Franklin said at the hearing that it was important that the applicant had not included hot dogs, donuts and frozen carbonated beverages in the statements of goods of previous applications for the registration of the various WENDY'S SUPA SUNDAE trade marks.  This was apparently because it had not, until now, wished to breach the co-existence agreement.  He said that the parties had agreed to trade side by side in well defined goods and services - the applicant dealing in ice cream related goods and the opponent with hamburgers and the like.  However, now that the applicant had made the present applications, it was clear that it should not be entitled to benefit from the honest concurrent use provisions of the legislation.  He added that there was nothing to show that the Registrar's discretion should be exercised in its favour.

On his part, Mr Caine said that the agreement between the parties had not been intended to prevent the applicant from trading in products which it had already been involved in at the time.  This had been obvious from the start, given the inclusion in the menu of 20 July 1982 of the items "hot dogs" and "donuts"  He said that the applicant had, from the evidence, been selling hot dogs and donuts from early in its trading history and the product, frozen carbonated beverages, was entirely consistent with the type of goods that were being sold at the time.  It now wished to honestly and accurately record these items on the Register, in relation to its trade marks.

I have given the co-existence agreement between the parties, as outlined in the opponent's letter to the applicant of 10 December 1982, careful consideration.  For a document which is intended to define the concurrent business activities of enterprises, with deceptively similar trade marks and covering goods and services which are similar to, or closely related to each other, I find it to be relatively imprecise and ambiguous.  It would appear, with the benefit of hindsight, that the parties would have been better served utilising the services of legal professionals who might have more clearly defined what each party was agreeing to abide by.  The opponent stated, in its letter forming the agreement, that it agreed not to trade in particular ice cream/fresh fruit related categories.  It also rather ambiguously added that it understood that the applicant might, "from time to time add to or delete from or vary the specific products being offered by it, but the general headings will remain and International also understands that its undertaking applies not only to the general headings but also includes use of the product names".  Despite the opponent agreeing to all of this, the only thing that the applicant apparently gave an undertaking to do was not to trade in the hamburger market - which was then described as including "(the sale of) chicken, hamburgers, fish, roast beef and any other filling possible provided that the sandwich remains a 'hamburger' as such".  Given such a definition, I think that I am correct in inferring that hot dogs and donuts are not hamburgers.  I believe that these two goods, together with frozen carbonated beverages, are not what can usually be regarded as being related to "the hamburger trade".  Certainly, hot dogs comprise some sort of meat "product" in a roll.  However, in my view, the opponent had the opportunity to include this food form with the other items listed as being related to hamburgers.  I believe that this is particularly relevant given that the opponent is an American fast food company, which should have been well aware of this fast food, so aligned with American popular culture.  The opponent had also been involved in the Australian food industry for a time and should have been aware that hot dogs and donuts were well known and popular fast foods in Australia for many years before the co-existence agreement.  Also, if it was concerned that the applicant was going to move outside its "ice cream" image, then it should have been alerted to this possibility when it saw that hot dogs and donuts were included on the 20 July 1982 menu.  With respect to which of the menus in evidence was the relevant document, I must accept that the version which was included in the applicant's evidence as GKD30 was the one which both parties had agreed formed the basis of the agreement, in the absence of another menu marked with that date.  In this regard, I accept Mr Vinall's explanation, in his declaration of 18 August 2000, as to how another document had been erroneously put forward as the authentic menu.

Having taken all of the forgoing into consideration, I cannot agree with the opponent that the applicant has been other than "honest" in its dealings relative to the present applications.  Following the provision of evidence, the marks were accepted on the grounds of honest concurrent use and "other circumstances".  Although I agree that the respective parties' marks are deceptively similar, it is useful, I think, in relation to a consideration of the honest concurrent use of trade marks, to take into account if there have been a number of instances reported of deception or confusion occurring between the applied for trade marks and the marks covered by the opponent's registrations.  It is significant that there have been none at all shown to me in the evidence here.

There was nothing put to me at the hearing with respect to any inconvenience which would be suffered by the opponent if the present applications were registered.  On the other hand, the applicant has claimed that it would suffer hardship if it could not continue to sell items, in which it has been dealing for some considerable time, because of a denial of its marks' registration here.  This could be through a direct loss of income from sales and an exposure to an action for infringement which might be brought by the opponent relying upon its registered marks.  Accordingly, I believe that the greater measure of inconvenience, which might be suffered here, would be that by the applicant, particularly seeing the opponent does not appear to have traded in Australia since 1985.

For the foregoing reasons, I can find no reason to overturn the acceptance of the applications here under the terms of s.44(3).  I find, therefore, that the opponent has been unsuccessful, in relation to this ground of opposition.

Conclusion
Given all of the above, I find that the opponent has not succeeded on any of the grounds set out in the notice of opposition, or relied upon by its representative at the hearing.  Accordingly, as the delegate of the Registrar in this matter, I dismiss the opposition as a whole.  It follows that, providing that the relevant fee is paid, the application may proceed to registration.

Costs
In respect of costs, I can see no reason why they should not follow the result.  Accordingly, I order that costs in the matter be awarded against the opponent, in accordance with the Official scale.

However, even if the opponent had been successful in this matter, I would not have been inclined to award costs to it in the manner I have done here.  This is because, despite being invited to do so, it failed to advise the applicant of the specific grounds which it would be actively pursuing at the hearing and the consequent added expense to that party of preparing a defence to all of the grounds in the notice of opposition.

Ian Forno
Hearing Officer

20 April 2001