4 min read

Combe International Ltd v Dr August Wolff GmbH & Co. KG Arzneimittel [2021] FCAFC 8

Following on from our previous article, in a successful appeal by Combe International Ltd, the Full Federal Court disagreed with the primary judge’s approach to assessing deceptive similarity. As a result, it refused registration of the VAGISAN trade mark by Dr August Wolff GmbH & Co. KG Arzneimittel.

Background

Dr August Wolff GmbH & Co. KG Arzneimittel(Dr Wolff) is a German pharmaceutical company. It filed an application for VAGISAN on 27 May 2015 for the following goods:

Class 3: Soaps and cosmetics, all aforementioned goods not for the indication and application of tired legs and/or arms

Class 5: Pharmaceutical products, sanitary products for medical purposes; dietetic substances for medical purposes, all aforementioned goods not for the indication and application of tired legs and/or arms

Combe International Ltd (Combe) is a US company that markets and sells a range of personal cleansing, health and grooming products and is the owner of prior registrations for or incorporating VAGISIL. These registrations include the following goods:

Class 3: Medicated lotions and medicated creams; non-medicated products for feminine use

Class 5: Medicated products for feminine use; vaginal lubricants; medicated creams, gels, lotions

A delegate of the Registrar of Trade Marks refused registration of the VAGISAN trade mark on 29 September 2017 under s60 of the Trade Marks Act 1995 based on Combe’s prior reputation in its VAGISIL trade mark.

Federal Court Decision

The primary judge disagreed with the delegate’s decision and decided that Combe had failed to establish any ground of opposition.

On the issue of deceptive similarity (section 44), the primary judge found that the VAGISAN and VAGISIL trade marks are likely to be understood as indicating products to be used in relation to the female genital area. The primary judge took the view that the prefixes VAG and VAGI are descriptive, and that, as a consequence, the words VAGISAN and VAGISIL do not have a close phonetic resemblance. In his view neither of the words lends itself to mispronunciation, and the suffixes SIL and SAN are quite distinct.

Combe was also not able to establish that a significant or substantial number of potential customers might be confused or deceived by the VAGISAN mark such as to wonder whether there is any connection between it and VAGISIL, given Combe’s reputation (section 60) in the VAGISIL trade mark

Regarding the final opposition ground (section 59), the primary judge considered the fact that soap and cosmetic products were proposed to be introduced into Australia was sufficient intention to use the VAGISAN trade mark in respect of the designated goods.

The Federal Court decision is reported here.

Appeal to the Full Federal Court

In its Notice of Appeal, Combe claimed that the primary judge erred in his assessment of deceptive similarity between VAGISIL and VAGISAN by:

  • comparing the two words side by side;
  • engaging in a meticulous comparison of the two words, letter by letter and syllable by syllable with a clear pronunciation;
  • failing to give proper consideration to the notional consumer’s imperfect recollection of VAGISIL;
  • failing to give proper regard to the importance of the first syllable of each word and the tendency of English speakers to slur the endings of words;
  • breaking each word into component parts, assessing the descriptive and distinctive qualities of those parts and thus failing to pay proper regard to the whole of each mark;
  • failing to assess the whole of each mark as a coined term with no actual meaning; and/or
  • assessing the SAN element of VAGISAN as a distinctive and not descriptive feature, despite finding that SAN is readily understood as a reference to sanitary.
  • not giving sufficient weight to the high-volume and low-value nature of the VAGISAN Goods when making his assessment.

Section 44 – Deceptive Similarity

After consideration of the primary judge’s reasoning regarding deceptive similarity, the Full Court disagreed with the primary judge’s approach for a number of reasons.

Firstly, the VAGISAN and VAGISIL trade mark both have the same first five letters, they both have three syllables, and the VAGIS component is pronounced the same way. The only differences between the marks is the final two letters “AN” and “IL, and the only aural difference, being that between SIL and SAN, may be mispronounced or slurred.

Secondly, the idea of the mark is important in the consideration of deceptive similarity. In this case, consumers are likely to consider VAG or VAGI to be a reference to the vagina. Further, the first two syllables of both marks are likely to be remembered. While a similarity in idea may be insufficient for a finding of deceptive similarity if there is an absence of visual or aural similarity, in this case, the VAGISAN and VAGISIL marks also have visual and aural similarity.

Thirdly, the primary judge appeared to wrongly assume that the classes 3 and 5 goods of both the VAGISAN and VAGISIL trade marks were confined to goods for vaginal use, due to the descriptive nature of the prefixes VAG and VAGI. However, when assessing deceptive similarity, the notional use of the respective marks should have been considered, and the range of goods went beyond those for vaginal use.

In light of the above, the Full Court concluded that VAGISAN was deceptively similar to VAGISIL. The VAGISAN trade mark was refused.

Section 60 – Reputation

This ground of opposition was not considered, as the matter had already been decided by the Full Court’s findings on the conflict with Combe’s earlier registrations.

Takeaway and final comments

The Full Court decision provides guidance on the various factors that should be considered when assessing the deceptive similarity of trade marks. In particular, it is a reminder that marks should be considered and compared in their entirety.

In a further development, Dr Wolff has filed an application for the composite mark DR WOLFF’S VAGISAN, covering similar goods in classes 3 and 5 to its VAGISAN word mark. This application has been opposed by Combe.

Authored by Danielle Spath and Sean McManis

10 min read

Office of the Retirement Commissioner v Cash Converters Pty Ltd [2020] NZIPOTM 27 (23 December 2020)

This recent decision provides helpful guidance on the principles for partial revocation of trade mark registrations in New Zealand and the determination of a “fair description” for goods and services.

The decision also highlights important differences between the law and practice on non-use removal proceedings in Australia and New Zealand.

Background

Cash Converters Pty Ltd (“Cash Converters”) sought partial revocation of the Office of the Retirement Commissioner’s (ORC) Registration No. 637400 SORTED. It covered Class 36 services in providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement, and providing financial information relating to retirement.

They also sought partial revocation of Registration No. 976028 SORTED, which covered broadly worded Class 36 services “financial affairs; monetary affairs; real estate affairs” and various services in providing advice, consultancy and information the areas of finance, monetary affairs, retirement, real estate, property and insurance and Class 41 educational services and services in providing educational material and information relating to insurance, financial affairs, monetary affairs, real estate affairs.  The full specifications for the registrations are at [1].  

Revocation was sought on the basis of non-use of the SORTED mark for a continuous period of three years.

Facts/evidence

ORC started using its SORTED mark in 2001, when it established its website www.sorted.com for providing information and tools, such as online calculators, to help New Zealanders prepare for, and manage, their finances during retirement. 

From at least 2013 ORC’s use of SORTED expanded to a broader range of services in providing information, advice and resources to promote “the life-long financial literacy of New Zealanders”.  With this expansion in 2013, ORC obtained the later Registration No. 976028 SORTED for the broader range of services. 

ORC’s evidence of use included use of the SORTED mark on guides, booklets, seminar and course details, on online tools and calculators and on an online forum.  [2]

Discussion

As the SORTED mark had not been used on all of the services covered by the registrations, partial revocation was in order.   

The Assistant Commissioner noted the High Court decision in Sky Network Television Ltd v Sky Fiber Inc (Sky Network) confirming how partial revocation applications should be considered:

The case law establishes that the first task is to find as a fact what goods or services there has been genuine use of the trade mark in relation to; and then to ‘arrive at a fair specification of goods having regard to the use made’.”  [3]

ORC was found to have used the SORTED mark to provide generalised information, advice and education on retirement planning and financial literacy generally.  ORC was also found to have used the mark to provide online calculator tools and an online community forum which provided users with more specific information and recommendations. 

In considering what was a “fair description” of those services provided under the mark, the Assistant Commissioner identified the principles set out by Mallon J in Sky Network:

“(a) The assessment has “nothing to do with the defendant.” Defining the goods negatively by reference to the defendants’ activities is therefore not the approach. 

(b) The proprietor has protection outside his or her specification of goods in areas where he or she can demonstrate a likelihood of deception under other provisions. “There is no pressing need, therefore, to confer on the proprietor a wider protection than his [or her] use warrants by unduly broadening the specification of goods.

(c) The width of the surviving specification “must depend largely upon questions of fact and degree.”  “Wide words can cover what are commercially quite different sorts of articles”.  If there is shown to be use of just one of those things “it would be commercially nonsense to maintain the registration for all goods caused by the wide words”. [4]

In summary, and further quoting Mallon J in Sky Network, the Assistant Commissioner noted that:

The “fair description” is one “which would be given in the context of trade mark protection” and depends on the nature of the goods, the circumstances of the trade and the breadth of use proved” and should be approached as ““objective and impartial, balancing the competing interests” and “a view from the trade”.[5]

The Assistant Commissioner recognised the important “balancing exercise” of competing interests of the owner, competitors and the public:

  1. to have the Register uncluttered with unused marks or with registrations with overly broad specifications;
  2. to prevent parties being unjustifiably exposed to infringement of registrations with overly broad specifications; and
  3. “the owner’s interest in protecting its brand” which “aligns with the public interest in consumers not being deceived or confused by use of another trade mark” and the owner’s entitlement “to commercially realistic protection, remembering the test for infringement, extends to similar goods and services”.  [6]

Findings 

The scope of the original specifications was considered to “extend well beyond the actual use that had been made of the SORTED mark”.  [7]

The Assistant Commissioner considered that a “fair description” of the services offered under the SORTED mark could be reached by considering the “functions (the way the mark has been used) and the generalised, rather than personalised, nature of the education, information and advice ORC provides”.  [8] 

ORC was not using the SORTED mark in relation to all types of information, education and advisory services in the areas of insurance, finance, money, real estate and investment.  Those services were all provided in giving advice and information focusing on retirement and personal financial literacy, and not on all aspects of insurance, finance, money and other matters.

The Assistant Commissioner found that it was appropriate to limit the specifications to reflect the focus of the use and reworded the services more narrowly and as all “relating [or related] to retirement and personal finance”.

Further, ORC’s advice was not personalised advice given to individuals.  Rather, it was generalised advice and information.  The general description “advisory services relating to…” in the original Class 36 specifications for both registrations was considered too broad.  The Assistant Commissioner considered that it would be fair to describe those services as “general advice relating to…”.

The original term “consultancy services relating to…” used in the Class 36 specifications for both registrations was removed because ORC would not be reasonably understood to be a consultancy business.  The Assistant Commissioner noted that “there is no aspect of the ORC business that technically requires the description to be used. ORC is able to have commercially realistic protection without the reference to consultancy”.  [9]

The full specifications as amended are at footnote  [10].

Earlier cases considering partial revocation

The Assistant Commissioner provided a helpful summary of earlier partial revocation cases and what was found to be a “fair description” for the goods and services.  This can be found at paragraph 71. 

These decisions show that precise descriptions are applied in partial revocation actions and that broad and unqualified descriptions are unlikely to be allowed under New Zealand practice. 

Comparison with Australian law

The decision highlights some important differences between the law on revocation/non-use removal actions in Australia and New Zealand. 

1. Discretion to remove or restrict a registration

The Assistant Commissioner noted in the decision that there is no “overriding discretion to refuse to revoke or partially revoke a registration”, which follows from the decision Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [97].  [11]  Under New Zealand law, a trade mark owner must show use during the three year non-use period, or special circumstances that justify non-use of their mark, to successfully oppose a revocation application.

Unlike New Zealand, under Australian law the Registrar has the discretion under s 101(3) of the Trade Marks Act 1995 not to remove a registration even where there has not been use of the mark if “satisfied that it is reasonable” not to remove the registration.  Further, s 101(4) provides that in deciding under subsection (3) not to remove a registration the Registrar may take into account use of the mark on similar goods or closely related services or similar services or closely related goods. 

2. Standing to apply for removal for non use

New Zealand law requires that only an “aggrieved person” can apply for revocation of a registration.   As noted in the decision “the term “aggrieved person” is given a wide and liberal interpretation.  This will generally include trade rivals.  As well as someone who is disadvantaged in a legal or practical way.”  [12]

However, under Australian law any person can apply for removal of a registration for non-use and there is no requirement for the removal applicant to show aggrievement to have standing to apply for removal. 

3. Date of revocation

In the New Zealand decision, the Assistant Commissioner noted that “the result of revocation is that the owner’s rights cease to exist on the date the application revocation was filed, or at an earlier date if the Commissioner is satisfied the non-use ground has been made out at an earlier date.”  [13]

Under Australian law, the date of removal of a registration for non-use is the date of the Registrar’s decision and the Registrar does not have the discretion to determine an earlier date for removal.

Takeaway

There are important differences in relation to standing and discretion in revocation/non-use removal proceedings in New Zealand and Australia which trade mark owners should note.

When defending a non-use removal action in Australia, and there has been no use of the mark during the 3 year non-use period, trade mark owners should still consider whether there are grounds for convincing the Registrar to refuse removal of the registration, such as some residual reputation in the mark from earlier use or possibly overseas reputation.

In New Zealand, it is much more likely than it is in Australia that broad descriptions will be restricted to more specific and limited descriptions.


[1] Services covered by Registration No. 637400 SORTED:

Class 36:Providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement; providing financial information relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet

Services covered by Registration No. 976028 SORTED:

Class 36: Financial affairs; monetary affairs; real estate affairs; providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement; advisory services relating to real estate ownership; providing financial information relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet; consultancy services relating to insurance; information services relating to insurance; insurance advisory services; insurance information; provision of insurance information; consultation services relating to real estate; providing information, including online, about insurance, financial and monetary affairs and real estate affairs; provision of information in relation to real estate; provision of information relating to property (real estate); provision of information relating to real estate; real estate advisory; services; real estate investment advice

Class 41: Dissemination of educational material; education services; educational services; life coaching (training or education services); provision of educational information; provision of education services via an online forum; publication of educational materials; publication of educational texts; the aforementioned relating to insurance, financial affairs, monetary affairs, real estate affairs

[2] Arguing that ORC did not provide financial advisory services, Cash Converters’ evidence in support of the revocation application referred to ORC’s disclaimers on its website that its information and tools “should be treated as a guide only” and should be used before seeking professional advice.  It was also noted that ORC’s “Investor Kickstarter” guide is referred to on the website as a guide only which  “does not constitute investment advice to any person”.  The evidence also noted that ORC is not a registered financial services provider under the Financial Services Provider (Regulation and Dispute Resolution) Act 2008 (RDR Act). 

In reply, ORC filed evidence that it is not required to be registered under the RDR Act as it is not a business which provides financial services as defined under the Act.  ORC also noted that their “Investor Kickstarter” tool asks high level questions to categorise participants into one of five types of investors and that their disclaimer clarifies that the advice given through this tool is not the type of financial advice to which the Financial Advisors Act 2008 would apply. 

[3] Office of the Retirement Commissioner v Cash Converters Pty Ltd [2020] NZIPOTM 27 (23 December 2020), paragraph 39.

[4] ibid, paragraph 44.

[5] ibid, paragraph 45.

[6] ibid, paragraph 52.

[7] ibid, paragraph 110.

[8] ibid, paragraph 113.

[9] ibid, paragraph 96.

[10] Registration No. 637400

Class 36: Providing information services and general advice relating to finance, investment and financial planning for and during retirement; providing financial information and general advice relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the worldwide web, an intranet or the Internet

Registration 976028

Class 36: Providing information and general advice, including online, about insurance, financial and monetary affairs and real estate affairs related to retirement and personal finance; provision of financial calculation services relating to retirement and personal financial planning including budgeting, personal debt, home buying, mortgages, superannuation, investment and savings, including by way of online; calculators; providing information services and general advice relating to finance, investment and financial planning for and during retirement; providing financial information and general advice relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet.

Class 41: Education services related to retirement and personal financial matters including financial planning and budgeting, debt, home buying, mortgages, superannuation, investment and savings; provision and dissemination of educational material and information related to retirement and personal financial matters, including by way online communication, websites, web blogs, social media, forums, publications (including texts, guides and brochures), news articles, training, courses, seminars and meetings.

[11] ibid, paragraph 12 quoting  Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [97]

[12] ibid, paragraph 28.

[13] ibid, paragraph 11.

Authored by Michelle Howe and Sean McManis

8 min read

There was no sweet victory for the owners of the WICKED SISTER trade mark, used mostly for dairy desserts, in their attempt to prevent use of the WICKED trade mark for dipping sauces and related products.

The recent Federal Court case of PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2020] FCA 1078 (30 July 2020), heard by Markovic J, involved numerous issues relating to competing registrations, infringement and validity, but ultimately PDP was unsuccessful in its claims against Grasshopper for trade mark infringement, misleading and deceptive conduct under the Australian Consumer Law and passing off under the common law.

PDP also failed in its claim to cancel Grasshopper’s trade mark registration, although it partially succeeded in its challenge to the registration on the basis of non-use.

Grasshopper’s cross claim to cancel the Wicked Sister registrations also failed, but it partially succeeded to restrict the registrations on the basis of non-use.

Background

PDP has manufactured and sold a range of chilled dairy desserts and snacks under the Wicked Sister brand since 2008.

PDP owns registrations for WICKED SISTER in plain word and stylised forms which cover various goods in classes 29 and 30 (collectively “the Wicked Sister marks”). The earlier stylised mark

dates from 2008 and is owned by PDP Fine Foods Pty Ltd (“PDP Fine Foods”). The later stylised mark

and plain word mark WICKED SISTER both date from 2016 and are owned by PDP Capital Pty Ltd (“PDP Capital”), a related IP holding company. PDP Capital’s marks achieved registration by consent from PDP Fine Foods.

Grasshopper is an IP holding company which has authorised the use by various entities selling dipping sauces since 2002 under the WICKED brand.

Grasshopper owns a registration dating from 2005 for

(“Wicked tail mark”) in class 30. The WICKED brand was modified in 2014 to

(“new Wicked mark”) with the original branding phased out by early 2016. Grasshopper also owns a pending application for the new Wicked mark, and an accepted application for the plain word WICKED (which has, since these proceedings, been successfully opposed by PDP in proceedings before the Trade Marks Office, on the basis of a lack of distinctiveness. In that case, the Hearing Officer expressed the view that “the ordinary signification of the trade mark is a colloquial word for ‘excellent’ and when applied to the goods there is an implication of decadence”).

Grasshopper extended its product range to include waffle dippers in 2018.

The Wicked Sister and Wicked products are sold through Coles supermarkets.

The products sold under the Wicked Sister marks are flavoured rice puddings, custard, tiramisu and panna cotta, made from fresh ingredients and found in the refrigerated section of the dairy aisle.

The Wicked dipping sauces are not made from fresh ingredients and therefore do not require refrigeration, although they are still sometimes placed with frozen berries in the fresh food section of the supermarket.

Common Issues

Markovic J initially considered two main issues common to the parties’ various claims in the proceedings:

»  whether the new Wicked mark is substantially identical or deceptively similar to the Wicked Sister marks; and

»  whether the goods covered by the respective marks are the same or of the same description.

The marks were not found to be substantially identical. In making her determination that the marks were also not deceptively similar, her Honour considered a number of factors including:

  • the new Wicked mark and the Wicked Sister marks are not visually or aurally similar;
  • the adjective “wicked”, when used on its own, is an abstract concept which could describe anything. In contrast, the word “wicked”, used in conjunction with the noun “sister”, is not a strongly distinguishing feature of the Wicked Sister marks;
  • despite her Honour agreeing that the goods are fast moving consumer goods sold at a low price point, based on the evidence, the goods are found in different parts of the supermarket, consumers are able to view the products and their associated trade marks, and confusion is unlikely; and
  • the evidence of confusion advanced by PDP was ultimately given little weight as it was not evidence of an “ordinary person”, but of people who have a personal or trade affiliation with PDP.

This conclusion had significant implications for a number of the claims brought by the parties, but perhaps most significantly meaning that there could be no finding of trade mark infringement.

Her Honour then determined that dipping sauces and waffle dippers are not similar to desserts, rice pudding or any of the other goods covered by the earlier stylised Wicked Sister mark owned by PDP Fine Foods. However, dipping sauces were specifically covered by the later Wicked Sister registrations owned by PDP Capital, and waffle dippers being bakery products, were also encompassed by those registrations.

Grasshopper’s cross-claim for rectification

Grasshopper sought rectification under section 88 of the Trade Marks Act for cancellation of the registration of the Wicked Sister marks.

There was a difference in ownership between the later WICKED SISTER registrations and the first registration, which was principally for tax minimisation reasons. This conflict was resolved at the examination stage by the owner of the earlier registration providing a letter of consent to the subsequent applicant. However, interestingly, her Honour upheld Grasshopper’s claim under the section 58 ownership ground finding that PDP Capital was not the owner of the later registered Wicked Sister marks because PDP Fine Foods, which owned the earlier registered Wicked Sister mark, was also the true owner of the later marks. Despite this finding, her Honour decided not to exercise discretion to cancel the registrations because there was no risk of consumer confusion due to the “unity of purpose” between PDP Fine Foods and PDP Capital being related companies [applying the principle enunciated in the Full Federal Court case of Trident Seafoods Corporation v Trident Foods Pty Ltd [2019] HCAFC 100]. This nevertheless leaves open the possibility of a similar claim in succeeding opposition proceedings, since the discretion exercised by the Court in this case does not exist in those proceedings.

Grasshopper’s non-use applications

PDP was able to establish use of the earlier stylised Wicked Sister mark for dairy desserts, yoghurt desserts, creamed rice, rice puddings, rice tapioca and cheesecakes. PDP also sought to rely on use of flavoured rice puddings to retain “sauces for rice”, but this was not accepted and these goods were removed together with all other goods for which use could not be shown.

Regarding the challenge to the later registered Wicked Sister marks under section 92(4)(a) for lack of intention to use, her Honour found evidence of actual use for various goods including, dairy products, dairy-based desserts panna cottas; crème caramels, custard, cheesecakes, cakes, frozen yoghurts, creamed rice. She also held that use of the marks for panna cotta was sufficient to retain the broad claim for “all other desserts in this class including prepared desserts”. However, as there was no intention to use or actual use of the trade marks for bakery products, confectionery, ice cream confections, dipping sauces and yoghurt products, these goods were removed.

PDP’s claim for trade mark infringement

For trade mark infringement, PDP needed to establish the threshold issue that the new Wicked mark is substantially identical or deceptively similar to the Wicked Sister marks and that dipping sauces and waffle dippers are the same as or of the same description as the goods for which the Wicked Sister marks are registered.

As the marks were not found to be substantially identical or deceptively similar, PDP’s infringement claim failed at the first hurdle and it was therefore not necessary to consider whether Grasshopper had any defences to infringement. However, in case her Honour was wrong in relation to her conclusions to PDP’s infringement claim, she went on to consider the threshold issue – whether Grasshopper’s authorised use of the new Wicked mark is capable of constituting trade mark infringement.

While Grasshopper did not deny that it authorised use of the new Wicked trade mark to other entities within the meaning of the Trade Marks Act, it argued that it could not be subject to direct liability for infringement under section 120 because there is no statutory tort of authorisation in the Act. Her Honour agreed and indicated that the threshold issue would have been decided in Grasshopper’s favour. She did add, however, that this does not mean that no cause of action could have succeeded against Grasshopper as a joint tortfeasor, had that been pleaded.

PDP’s claim under the Australian Consumer Law (ACL)

PDP alleged that Grasshopper’s conduct breached sections 18 and 29 of the Australian Consumer Law. Grasshopper argued that (1) as a mere IP holding company it could not have made any of the alleged misrepresentations and (2) there was no real likelihood of confusion. Her honour rejected Grasshopper’s first contention which indicates that Grasshopper could have been liable under the ACL if the marks were otherwise found to be sufficiently similar and PDP had an established reputation in the Wicked Sister marks as at 2014 when use of the new WICKED trade mark commenced. However, ultimately her Honour found that there was no real likelihood of confusion and, consequently, PDP’s claim under the ACL failed.

PDP’s claim for passing off

PDP’s passing off claim followed her Honour’s findings in relation to the ACL. While Grasshopper’s conduct may amount to conduct for the purposes of establishing passing off, PDP had not established a sufficient reputation in the Wicked Sister marks as at 2014, nor that a sufficient number of consumers were likely to be deceived by Grasshopper’s use of the new Wicked mark.

PDP’s non-use application

PDP sought removal of the Wicked tail mark on the grounds of non-use under sections 92(4)(a) and 92(4)(b). As her Honour had found that Mr Valentine had an intention to use the mark, the section 92(4)(a) ground was dismissed. In relation to the section 92(4)(b) ground, Mr Valentine could establish use during the non-use period for dips including chocolate dips, but conceded that the mark had not been used for dessert toppings and sauces and confectionery products. Despite this, her Honour exercised discretion to retain the registration for all goods except savoury dips.

Takeaways

When comparing marks for the purpose of determining deceptive similarity, whether the combination has a meaning that differs from that of the word alone can impact on whether that word is determined to be an essential feature of the mark.

The case also provides a timely reminder to business owners, who wish to protect and enforce their marks, to ensure that they are filed in the name of the legal entity who will use or authorise use of the mark. Further, it confirms that there is no statutory tort of authorisation in the Trade Marks Act with the result that an IP holding company which merely authorises use of a mark cannot be subject to liability for direct infringement, although it may be liable as a joint tortfeasor.

Authored by Kathy Mytton and Sean McManis

8 min read

In the recent decision of Ceramiche Caesar S.p.A. V Caesarstone Ltd [2020] FCAFC 124 (28 July 2020) the Full Federal Court decided that the primary judge had erred in finding “honest concurrent” use of the CAESARSTONE mark.  The decision also considers the requirements for “quality control” and a finding of “authorised use”.

Proceedings

The decision involved Ceramiche Caesar S.p.A’s (Ceramiche Caesar) appeal of the primary judge’s decision to allow Caesarstone Ltd’s (Caesarstone) Australian Trade Mark Application No 1058321 for the word mark CAESARSTONE (CAESARSTONE Mark) to proceed to registration for certain class 19 floor and wall goods on the basis of honest concurrent use.

The decision also involved proceedings in Ceramiche Caesar’s appeal of the primary judge’s decision to allow Caesarstone’s Australian Trade Mark Application No 1211153 for

to proceed to registration for certain goods and services in classes 19, 35 and 37 (Caesarstone Device Mark) and to allow Caesarstone’s Australian Trade Mark Registration No 1211152 for the word mark CAESARSTONE to remain registered for services in classes 35 and 37 (Caesarstone Services Word Mark).

The parties agreed that the result in the first proceeding would determine the results in the second proceedings and almost entirely determine the result in the third proceeding.  The discussion below therefore relates only to the first proceeding.

Facts

The appellant, Ceramiche Caesar, has manufactured ceramic tiles for indoor and outdoor flooring and wall cladding in Australia since 1988. Effective from 23 November 2004, Ceramiche Caesar has had a registration in class 19 covering  “ceramic tiles for indoor and outdoor use” for a CAESAR device mark:

The respondentCaesarstone, is an Israeli company that manufactures and sells large quartz slabs which have been labelled on the underside of the slab with the mark “CAESARSTONE” since 1987.

Caesarstone’s slabs were distributed in Australia from 2003 by two distributors: Caesarstone’s licensee, Tessera Stones and Tiles Pty Ltd (Tessera) and Tessera’s sub-licensee, Carsilstone Pty Ltd (Carsilstone). In 2006, Caesarstone incorporated an Australian subsidiary, Caesarstone Australia Pty Ltd (Caesarstone Australia).

From 2003 the distributors, Tessera and Carsilstone, sold the slabs to stonemasons in Australia who would then convert them into finished products, including benchtops and countertops, vanities and surrounds and splashbacks, which would then be sold on to customers.

Ceramiche Caesar’s CAESAR device mark registration was cited against the  application to register the CAESARSTONE mark on 2 June 2005.  To overcome this citation, Caesarstone amended its goods specification to disclaim “tiles” as follows:

Panels for floors, floor coverings, wall cladding, ceilings; non-metallic covers for use with floors and parts thereof; profiles and floor skirting boards; none of the foregoing being in the nature of tiles.”

The CAESARSTONE application was subsequently successfully opposed by Ceramiche Caesar, with the Registrar’s delegate deciding that the CAESARSTONE mark was deceptively similar to the CAESAR device mark and that, based on the facts, the exception for “honest concurrent use” under s 44(3)(a) and/or “prior continuous use” under s 44(3)(4) of the Trade Marks Act 1995 should not apply.

Caesarstone appealed the decision and the primary judge in Caesarstone Ltd v Ceramiche Caesar S.p.A. (No 2) [2018] FCA 1096 (Caesarstone (No 2)). found that there had been “honest concurrent use” of the CAESARSTONE mark on floor panels and wall cladding and that the use of the CAESARSTONE mark by Caesarstone’s distributors was “authorised use”.

On the appeal the two main issues in dispute in the first proceedings were whether the primary judge erred in concluding that:

(1) there was honest concurrent use of the CAESARSTONE mark on the designated Class 19 goods;

(2) the prior use of the trade mark was authorised use under Caesarstone’s control”.  [1]

Honest concurrent use

The interpretation of the disclaimer of “tiles” in the goods description was crucial to the question of whether there was honest concurrent use.

Caesarstone argued that the exclusion of “tiles” from its specification was of no significance because it did not limit the goods specifically listed in the specification.  They relied on the primary judge’s finding that the disclaimer did not “subtract all content from” the words “panels for floors” and “wall cladding”.  [2]

Ceramiche Caesar argued that the disclaimer effectively excluded tiles.  As the primary judge found that the goods in honest concurrent use were floor panels and wall cladding in the nature of tiles, there was therefore no honest concurrent use of the mark in respect of the goods covered by the application.

Their Honours considered that “as a matter of plain English, the words “none of the foregoing being in the nature of tiles” operate to limit the class 19 goods to include only panels for floors, floor coverings and wall claddings which are not in the nature of tiles”.  They said that “the primary judge’s conclusion that the tile disclaimer did not “subtract all content” from the words “[p]anels for floors, floor coverings, and wall cladding” which are not “in the nature of tiles” was a statement of the obvious” and “not a statement which supports the conclusion that the tile disclaimer was “ineffectual” in the sense contended for by the respondent”.  [3]

The Full Court held that the primary judge erred in finding honest concurrent use because honest concurrent use must be in respect of the goods covered by the application. In this case, the finding of honest concurrent use was for goods which were all “in the nature of tiles”.  As tiles had been expressly excluded from the specification they were not covered.

The Full Court also refused Caesarstone’s request to remove the disclaimer, because this would effectively widen the scope of the registration to include tiles.

Authorised use

While the Full Court found that there had not been honest concurrent use, and the second question of whether Caesarstone’s use would have been “authorised use” did not therefore strictly arise, the judges considered the question briefly.

Section 8(1) of the Trade Marks Act 1995 states that a person is an authorised user “if the person uses the trade mark under the control of the owner of the trade mark” and section 8(3) provides that:

(3) If the owner of a trade mark exercises quality control over goods or services:

(a) dealt with or provided in the course of trade by another person; and

(b) in relation to which the trade mark is used;

the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.

The primary judge’s finding that Caesarstone’s prior concurrent use was authorised use under Caesarstone’s control and therefore use in accordance with section 8(3) of the Trade Marks Act was on the basis that Caesarstone:

“(1) gave instructions regarding slab transport and storage to the Australian distributors;

(2) provided technical and marketing support services to the Australian distributors;

(3) sought to exercise quality control by ensuring that the Australian distributors provided fabrication and installation manuals to the stonemasons, and contributing to the content of these manuals.”  [4]

However, on appeal their Honours decided that the evidence did not support this and that the primary had judged erred in finding authorised use.

The Full Court stated that “Authorised use requires the trade mark applicant to establish “control as a matter of substance”: Lodestar Anstalt v Campari America LLC [2016] FCAFC 92(2016) 244 FCR 557 (Lodestar) at [97]. What constitutes control as a matter of substance is informed by the function of the trade mark, which is to indicate a connection in the course of trade with the registered owner – see PioneerKabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56(1977) 137 CLR 670 (Pioneer) at 683 per Aickin J”. (pgh 39).  [5]  The court also noted “the critical enquiry is whether there was quality control with respect to the designated goods”.

The court held that Caesarstone did not exercise quality control because the control was not in relation to the designated goods, being panels for floor covering and wall covering.  Further the quality control was not in relation to the work of the stonemasons who fabricated the slabs into the finished products and were therefore responsible for the ultimate quality of the designated goods.  Their honours found that “not only did Caesarstone not have any contractual relationship with the stonemasons, but there was no evidence that Caesarstone ever inspected the stonemasons’ work or conducted any quality control regarding the final product.” [6]

In relation to the evidence on which the primary judge based his finding of quality control, the court noted that:

  1. Caesarstone’s storage and transport instructions only ensured that the slabs were not damaged, they did not enforce quality control over the finished products covered by the application being the panels for floor covering and wall cladding;
  2. The installation and fabrication manuals provided by the distributors to stonemasons were for guidance only and the “provision of technical information is not, at least of itself, the exercise of quality control”. [7]
  3. There were no terms relating to “quality control standards, brand guidelines, marketing approval mechanisms or rights of inspection of fabricated product” in Caesarstone’s distribution agreement with Tessera. [8]

Authorised use on a wider basis

The primary judge had also found that there had been control “on a wider basis than… exercising quality control”.  However, their Honours held that this was not the case because “the application of the mark to a slab is not indicative of control over the designated goods” [9] and the various claims of wider control, such as Caesarstone’s website listing ideas on possible uses for the slabs did not “operate to constrain or demand the stonemasons to use the slabs in any particular way or require fabrication in any particular way” [10].  Further, the general communications between Caesarstone and its distributors did not include reporting back to Caesarstone on the ultimate application of the slabs and did not “translate into a finding of “control” over the designated goods”.  [11]

Decision

Their honours found that the primary judge erred in concluding that there had been honest concurrent use in respect of the goods covered by the amended application. They also found the claimed use was not authorised use under Caesarstone’s control and that Caesarstone did not exercise quality control and general control on a wider basis.

The second proceeding was resolved in the same way as the first and third proceeding also went the same way as the first.

The appeals in all three proceedings were allowed, the primary judge’s orders were set aside, Ceasarstone’s application numbers 1058321 and 1211153 were refused and registration number 1211152 was cancelled.

Takeaway

The decision is an important reminder that quality control must be exercised as a matter of substance. This is essential if the use of the trade mark is to be considered authorised use that can be relied upon by a registered owner for the purposes of defending a non-use removal action, or to support an applicant’s claim to registration based on use.

It serves as useful clarification that disclaimers in goods specifications are to be interpreted as a matter of plain English and is a reminder that to establish “honest concurrent use”, it is necessary to prove use on the goods covered by the application.


[1] Ceramiche Caesar S.p.A. V Caesarstone Ltd [2020] FCAFC 124 (28 July 2020), paragraph 22.

[2] Ibid, paragraph 27.

[3] Ibid, paragraph 29

[4] Ibid, paragraph 45.

[5] Ibid, paragraph 39.

[6] Ibid, paragraph 60.

[7] Ibid, paragraph 52.

[8] Ibid, paragraph 58.

[9] Ibid, paragraph 64.

[10] Ibid, paragraph 70.

[11] Ibid, paragraph 75.

Authored by Michelle Howe and Sean McManis

8 min read

Representations on Packaging and in Advertising – the Full Federal Court finds that Kimberley-Clark has not Engaged in Misleading Conduct by using “Flushable”.

The Australian Competition and Consumer Commission (ACCC) has lost its Full Court appeal that Kimberly-Clark Australia (KCA) had misled and deceived consumers, by representing on its website www.kleenex-cottonelle.com.au and on product packaging, that its  Kleenex Cottonelle Flushable wipes (KCFC wipes) were suitable for flushing down toilets.

The full decision can be found here.

Background

Earlier Federal Court Proceedings

In 2006 the ACCC commenced Federal Court proceedings against KCA alleging that KCA had, by its advertising and marketing of the KCFC wipes during May 2013 and May 2016:

(1)     engaged in conduct in trade or commerce which was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18(1) of the Australian Consumer Law, being Sch 2 of the Competition and Consumer Act 2010 (ACL);

(2)     made false or misleading representations that its KCFC wipes had a particular quality in  contravention of s 29(1)(a) of the ACL and/or had particular performance characteristics, uses and/or benefits, in contravention of s 29(1)(g) of the ACL; and

(3)     engaged in conduct in trade or commerce that was liable to mislead the public as to the nature, characteristics, and suitability for purpose of KCFC wipes, in contravention of s 33 of the ACL.

 The ACC alleged that KCA’s packaging and website represented that the KCFC wipes:

(1)     “were suitable to be flushed down the toilet and into sewerage systems in Australia” (flushability representation);

(2)     “had similar characteristics to toilet paper when flushed”, as they would behave in a similar way to toilet paper when flushed in that they break up or disintegrate in a timeframe and manner similar to toilet paper” (characteristics representation); and

(3)    “would break up or disintegrate in a timeframe and manner similar to toilet paper” (disintegration representation).

The representations included statements on the webpages of KCA’s website www.kleenex-cottonelle.com.au , such as “Flushable Cleaning cloths” and “will break up in the sewerage or septic system like toilet paper”, use on the product packaging of words, such as “flushable” and “Cloths break down in sewerage system or septic tank” and of the logo (depicted below).

At the time there was no legislation or generally accepted industry standards governing the characteristics of what could be marketed as “flushable”, although KCA argued that the KFCF wipes met the tests for flushability under the “GD3 Guidelines for flushability”, which had been developed by manufacturers, including Kimberley-Clarke Corporation.

KCA denied making the characteristics or disintegration representations but accepted that it made the flushability representation. However, it argued that the flushability representation was not false or misleading and was within the G3 Guidelines.

While accepting that the KCFC wipes do not break down as quickly or easily as toilet paper, Gleeson J found that the characteristics and disintegration representations had not been made.  This was because in the website or packaging context in which the alleged representations appeared, they would not convey to an ordinary reasonable consumer anything about how the flushed KCFC wipes behaved, except that they might be “flushable” (although not equivalently flushable to toilet paper).

Having regard to the ACCC’s concession and the evidence, Gleeson J found that the flushability representation had been made by KCA. However, her Honour found that the flushability representation was not false, misleading or deceptive because there was insufficient evidence that harm had actually eventuated to household plumbing and the sewer network to demonstrate that the KCFC wipes were unsuitable for flushing.

While there was disagreement over the G3 Guidelines being an acceptable standard, Gleeson J found that, in the absence of this evidence of harm, they were an “appropriate framework for assessing flushability” and a “reasonable benchmark for making a flushability claim”.

The Appeal to the Full Federal Court

The ACCC unsuccessfully appealed Gleeson J’s decision to the Full Federal Court on 8 appeal grounds, all of which were dismissed. Appeal grounds 1 to 6 related to the flushability representation.

In the 1st ground of appeal,  the ACCC argued that the trial judge, Gleeson J was in error because she “approached the question of ‘harm’ as might be done in a damage claim in negligence, elevating the inquiry to proof of causation as opposed to assessing falsifiability under the consumer law”. The ACCC argued that her Honour should have considered the question of whether  there was a real risk of harm or that the KC wipes had the potential to cause harm rather than that the KC wipes contributed to or caused actual harm (including blockages) to household plumbing (including septic tanks) or to the sewerage network.

The Full Court dismissed this ground of appeal for two reasons.  First, there was no error in the primary judge’s reasons because her Honour simply responded to the case argued by the ACCC at trial on the flushability representation, which was on the basis that the actual harm had been caused, not that flushing the KC wipes posed a risk of harm. The Full Court said “No such case was run at trial. It cannot be run now”, as it was a different case.

Secondly, the Full Court found that Gleeson J had, in any event, considered and addressed the risk of harm but concluded that it was not shown to be materially greater than the risk posed by toilet paper, and that it was not erroneous to take into account, as the primary judge did, whether any harm in fact eventuated to household plumbing and the sewerage network, when assessing the level of risk posed by the KCFC wipes.

Related to this second issue, the ACCC argued in its 2nd  and 3rd  appeal grounds  that Gleeson J’s  findings that the KCFC wipes did not present a risk of harm “over and above” or “materially greater” than that posed by toilet paper and her finding that flushing the KCFC wipes down the toilet would contribute to, or cause harm, were in error because they were inconsistent with and against the weight of the evidence.

In dismissing these grounds, the Full Court found that It was not erroneous (for the trial judge) to have regard to “the paucity of evidence of harm in reaching the conclusion that the risk posed by KCFC wipes was not materially greater than the risk posed by toilet paper”.

Some of the problems identified by the primary judge in the evidence led by the ACCC were:

  • Most of the evidence was directed to how wipes in general caused blockages, but not that the KCFC wipes caused blockages. The ACCC had presented only very weak evidence of blockages in household drain lines and in the sewer (beyond the household drain line) caused by the KCFC wipes.
  • It was accepted, as a matter of logic, that the more quickly an item breaks down after flushing the less the risk of snagging or clumping in the sewerage system. The KCFC wipes were shown to break down and disperse more slowly than toilet paper but this did not support an inference that flushing KCFC wipes down the toilet led to a materially greater risk than toilet paper of causing blockages to the sewerage system, when there was a lack of evidence that KCFC wipes actually did cause blockages.
  • KCA’s change of packaging in October 2015 to indicate that it did not recommend KCFC wipes be flushed into a domestic septic tank was insufficient to support the inference (contended for by the ACCC) that the KCFC wipes contributed to or caused harm to household plumbing or the sewer network.

In the 4th ground of appeal, the ACCC argued that the trial judge erred in finding that the evidence of 26 consumer complaints in KCA’s business records (regarding how their household plumbing (including septic tanks) had been blocked by KCFC wipes) was “weak” and insufficient to support a finding that the KCFC wipes were not suitable to be flushed down toilets.

The Full Court said that the small number of consumer complaints (most of which related to  blockages in septic tanks not the sewerage systems as argued by ACCC at trial) and the absence of evidence from any consumer or plumber to verify the facts in any of the complaints  was “hardly a sound basis” for reaching the conclusion that KCA falsely representing that KCFC wipes were flushable, and “rather suggests that the KCFC wipes were suitable to be flushed into domestic drain lines”.

In the 5th ground of appeal, the ACCC argued that the trial judge erred in finding that the GD3 Guidelines were an “appropriate framework for assessing flushability”, because manufacturers, including KC had developed the guidelines themselves, “to avoid government regulation which might constrain their business”.

The Full Court dismissed this ground.  They found that the primary judge was “plainly aware that the manufacturers were developing their own guidelines” and their development had been informed by various “real world” tests.

The ACCC’s 7th and 8th grounds of the appeal concerned the characteristics and disintegration representations.

The Full Court found that the primary judge was correct to conclude that the characteristics and disintegration representations were not made and so it was not necessary to consider then whether they were false and misleading.

The Full Court noted that of the 8 representations relied upon by the ACCC, 6 did not mention toilet paper at all or compare the KCFC wipes with the characteristics or performance of toilet paper. The 5th representation, that the KCFC wipes “will break up in the sewerage or septic system like toilet paper” (appearing on a webpage of the www.kleenex-cottonelle.com.au website) was the only statement which directly compared the KCFC wipes to toilet paper. However, the Full Court agreed with the judge at first instance that this representation had to be considered in the context of the immediately following sentience; “However, do not flush an excessive amount of wipes at one time (no more than two wipes per flush)” The Full Court said that in this context (i.e. the direction not to flush any more than two wipes)the reasonable consumer would not have understood that the KCFC wipes broke up in the same way as toilet paper .

Regarding the eighth representation, the  image,  the Full Court said that he image did not, of itself, or together with the other representations read in context, convey that KCFC wipes “had similar characteristics to toilet paper when flushed” or that they “would break up or disintegrate in a timeframe and manner similar to toilet paper”.

Comment

The ACCC’s case ultimately failed because it could not prove that KCA made the false and misleading statements that the ACCC alleged.  The ACCC didn’t help its own cause by arguing at first instance (which could not be changed on appeal) that the KFCF wipes were not suitable for flushing because they caused actual harm to the sewerage system. With this argument the ACCC gave itself a higher evidentiary burden to meet than the argument that the KCFC wipes posed only a risk of harm. It is worth noting that the ACCC’s argument at first instance that the flushabiilty representation by KFA was in respect of a “future matter”, and so within section 4 of the ACL, was not successful.  If the ACCC had succeeded with this argument and section 4 found to apply, the evidentiary burden would instead have been on KCA to present evidence that it had “reasonable grounds” for making the flushability representation and so (for that reason) the representations could not be taken as misleading.

Authored by Sean McManis

5 min read

In the recent decision of the Intellectual Property Office of New Zealand, Frucor Suntory New Zealand Limited v. Energy Beverages LLC [2020] NZIPOTM 5 (11 May 2020), Energy Beverages LLC (Energy Beverages) was unsuccessful in its application for revocation of the green colour mark (V Green mark) owned by Frucor Suntory New Zealand Limited (Frucor).

The full decision can be found here.

Background

The parties are competitors in the energy drink market. Energy Beverages produces the “MOTHER” branded energy drink and Frucor the “V” branded product.

In June 2017, Energy Beverages filed an application for non-use revocation of Frucor’s registration 795206 in class 32 for “Energy drinks; none of the aforementioned being cocoa – based beverages”.

Below is a representation of the V Green mark and endorsement that appears on the NZ Trade Marks Office database:

V Green mark

“The mark consists of the colour green (Pantone 376c), as shown in the representation attached to the application, applied as the predominant colour to the goods, their packaging or labels., Section 18(2) of the Trade Marks Act 2002 applies.”

The relevant non-use period is 21 May 2014 to 21 May 2017.

Energy Beverages filed the revocation application following a threat of infringement from Frucor arising from its use of an ink mix equivalent to Pantone 376c in its “KICKED APPLE get-up” for its MOTHER energy drink.

Energy Beverages claimed that Pantone 376c looks like:

Pantone 376c

which is different to the registered mark. It consequently claimed that Frucor had not made genuine use of the V Green mark in New Zealand during the relevant period, applied as the predominant colour to its goods, their packaging or labels.

Both parties gave evidence regarding the Pantone Colour Matching System (PCMS), which is an internationally recognised system of standardising colour tones.

Frucor established that it had submitted an original square sample cut from a roll of labels coated with PMS 376 with metallic finish with the application for registration of the V Green mark. PMS 376 is a base formula for a green colour.

Energy Beverages argued the Frucor could not have used Pantone 376c on its V cans because the “c” suffix indicates it is a colour that can only be applied to coated paper stock and not metallic substrates.

Frucor admitted that the colour swatch supplied with the application was not Pantone 376c, but only “the PMS reference which best reflects the colour of 376 when printed on a metallic substrate” such as a can or metallic foil label. This view was consistent with Energy Beverages’ own evidence – “Frucor has mixed up a colour – the “V” green – to match or mirror Pantone 376C as closely as possible”.

Frucor submitted that the difference in colour between the sample provided at filing and the representation appearing on the register was due to the degradation in colour from the copying and scanning processes undertaken during the digitisation of IPONZ IP records in 2009. Energy Beverage’s own evidence demonstrated how printed colour degrades through such repeated processes.

Issues for determination

  • What is the appropriate representation of the trade mark for the purposes of assessing use?

In the High Court decision in Levi Strauss & Co v Kimbyr Investments [1994] 1 NZLR 332, Williams J held that the written explanation of the mark defines the trade mark and not the image of the mark on the register:

the opening words of the written description state that “the mark consists of”. In the absence of any other words explicitly stating that the pictorial representation is to govern, those words are decisive”.

While noting that the colour swatch attached to the trade mark application was a considerably different shade of green to that appearing on the register, the Assistant Commissioner applied Levi Strauss and found that the relevant representation is that attached to the application for the trade mark, as specified in the written explanation. Accordingly, she did not consider that the different representation of the colour on the register was relevant to the assessment of use of the trade mark.

Although not strictly necessary for the Assistant Commissioner to reach a conclusion as to the reason for the difference between the colour chip as shown on the register and the colour as described in the application, she accepted Frucor’s explanation that the difference appears to have arisen from the process of uploading the colour swatch to the register during the digitisation process in 2009.

  • Was there genuine use of the V Green trade mark in the course of trade during the relevant period?

Having found that the written explanation of the trade mark overrides the representation provided, the issue for determination is whether the evidence of use relied upon by Frucor constitutes qualifying genuine use of “the colour green (Pantone 376c) as shown in the colour swatch attached to the application, applied to the goods, their packaging and labels”.

Energy Beverages claimed that Frucor’s evidence of use was insufficient to establish genuine use of the mark in the course of trade in New Zealand. It argued that the representation of the mark as attached to the application and the reference to “the colour green (Pantone 376c)” are inconsistent, or otherwise incapable of together describing a trade mark, or being used as such. The Assistant Commissioner rejected this argument as an attempt by Energy Beverages to challenge the validity of the mark itself (which is not permitted under s66).

The Assistant Commissioner agreed with Energy Beverages’ contention that the goods referred to in the written explanation of the trade mark are the beverages themselves (Frucor did not contend that the trade mark is applied to the liquid drink), but accepted Frucor’s submission that the use of the trade mark on cans or bottles is use “in relation to” the goods. She said this conclusion is of little significance to the revocation application, because if use of the trade mark on cans or bottles does not constitute use in relation to the goods, it will certainly constitute use in relation to packaging.

After reviewing the different categories of use, the Assistant Commissioner was satisfied that there was sufficient evidence of use of the V Green trade mark by Frucor in New Zealand during the relevant period, on V cans, can multipack shrink wrap and paperboard packaging for multipack bottles, as well as related promotional and advertising materials.

Consequently, the application for revocation failed and the V Green trade mark was permitted to remain on the register.

Takeaway

This decision is informative in clarifying how to interpret depictions of non-traditional marks that appear on the Register of Trade Marks in New Zealand, and indicates the importance of accurately describing such trade marks in the application for registration.

Authored by Kathy Mytton and Sean McManis

2 min read

To celebrate International Women in Engineering day (23 June 2020), Shelston IP would like to highlight our outstanding female patent attorneys and patent engineers qualified in this field.

With 30 years of experience in the patent profession, Caroline Bommer is the female engineer that we aspire to be. She provides a wonderful example of the possibilities for our young female attorneys and is appreciated by all of her clients, particularly in her effective communication and her ability to understand their business strategies. Caroline’s mechanical engineering expertise is also extensive, including practical knowledge acquired prior to joining the patent profession in the industries of building, transport, aerospace, and defence. She has a keen interest in green technologies, with many years of personal involvement in solar car racing. Ask her to take you for a spin!

Tam Huynh works in the fields of electrical engineering and information technology patents. Growing up, Tam would find any excuse to integrate electronics into her arts and crafts projects. This included raiding her Dad’s electronics kit to make LED greeting cards for her family. She went on to study Computer Engineering at University and undertook a project exploring the use of solar power technologies and their application with mobile devices. Tam now assists with the ongoing management of patent portfolios in a range of fields, including electrical power systems, information and software systems, mining and automation, and medical devices. Tam also holds a Bachelor of Commerce degree and her accounting background adds additional depth to her handling of financial-system related inventions.

With childhood memories of jumping off a red billy cart and yelling “Newton’s third law”, Allira Hudson-Gofers brings her enjoyment of physics and engineering into her role as the head of Shelston IP’s Engineering and ICT Patents Group. Allira studied both mechatronics and biomedical engineering at University, going on to develop particular expertise in research, product development, regulatory affairs, and intellectual property in the medical technology space. She now applies this expertise, together with her recent MBA studies, to help her clients protect and commercialise their innovations.  

Connie Land had her interest in the human body and medical devices sparked in high school, which lead her to pursue a degree in Biomedical Engineering. Connie started her career with hands-on experience maintaining, repairing, and programming medical devices.  Last year, after discovering that the role of a patent attorney was a career option for engineering graduates, she hung up her tools and joined Shelston IP as a Patent Engineer. Connie now works with medical devices in a different capacity and uses her passion and knowledge of medical devices and technology to help her clients navigate the path to obtaining patent and design protection. She is currently studying a Masters in Intellectual Property and is looking forward to becoming a registered patent attorney in Australia and New Zealand. 

Authored by Allira Hudson-Gofers, Caroline Bommer, Tam Huynh and Connie Land

4 min read

Caterpillar Inc. v Sayvest Pty Ltd [2020] ATMO 16 (5 February 2020)

Caterpillar Inc. (Opponent), the well-known US construction equipment manufacturer, was partially successful in its oppositions to registration of two trade marks (Trade Marks) IRONCAT (Word Mark) and IRONCAT TYRES logo shown below by Sayvest Pty Ltd (Applicant) for various tyres in class 12 and related services in classes 35 and 37 (Sayvest Goods and Services):

Composite mark

The Opponent relied principally on grounds of opposition under ss44 and 60 of the Trade Marks Act 1995 (the Act). The opposition to the Word Mark was successful under ss 44 and 60, but it failed in respect of the Composite Mark.

Section 44

Section 44 involves a comparison of the Opponent’s trade marks with the Applicant’s Trade Marks, as well as a comparison of the respective parties goods and services.

The Opponent is the registered proprietor of over 150 Australian trade marks, but relied on four registrations for the word CAT covering goods and services in classes 12, 35 and 37 (Opponent’s Marks). The Applicant conceded that a number of the goods and services of the Opponent’s Marks are similar to the Sayvest Goods and Services, and the parties agreed that the issue to be determined was whether the marks are too close.

The Opponent did not contend that CAT is substantially identical with either of the Trade Marks and the delegate determined that the marks are not substantially identical.

The delegate then considered whether the marks are deceptively similar. A trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that its use is likely to deceive or cause confusion. Confusion is a lower bar than deception. It is enough to show that consumers would be caused to wonder whether the goods or services offered by the Applicant come from the Opponent.

In considering the impression conveyed by the marks, the word marks IRONCAT and CAT marks were found to be conceptually similar as both give the impression of a cat. The word IRON was considered to be mildly descriptive in the context of heavy machinery that commonly has iron and its alloys as a major element . Thus, the element CAT was found to be the more distinctive part of the trade mark IRONCAT and the delegate found the Word Mark was deceptively similar to the Opponent’s Marks.

With respect to the Composite Mark, while the emphasis in the comparison of the marks was still on the word CAT, the idea of the Composite Mark is that of a big cat, namely a tiger. This coupled with the word IRONCAT communicated an overall different impression of a powerful creature. Further, the design features are likely to be retained by the consumer as a distinctive feature of the Composite Mark. On that basis, the delegate found that the Composite Mark was not deceptively similar to the Opponent’s Marks.

Section 60

Section 60 is concerned with whether the Applicant’s use of the Trade Marks, in respect of the Sayvest Goods and Services, is likely to cause confusion as a consequence of the Opponent’s reputation in its trade marks

The Opponent’s evidence in support almost exclusively concerned the extent of reputation it enjoyed in its trade marks.

The Applicant argued that the Opponent’s reputation was a “compounded form of reputation” which involves the use of three brand elements in close proximity – a consistent yellow get up, the CATERPILLAR house mark and the CAT mark. However, the delegate was satisfied that the Opponent’s CAT word mark had acquired a significant Australian reputation in relation to heavy vehicles and machinery and other vehicles, and that it was a small step beyond to recognise that it extends to the servicing and spare parts of those goods, including solid rubber tyres.

Adopting the same analysis for confusion as under the s 44 ground, the delegate found that use of the IRONCAT word mark would be likely to cause confusion. However, the differences between CAT and the Composite Mark, featuring a distinctive orange tiger, reduced the risk of confusion and the s60 ground failed for the Composite Mark.

Conclusion

The Word Mark was refused but the Composite Mark was permitted to proceed to registration.

While the word mark in a composite mark is commonly the key feature, the present case demonstrates that a design element can change the impression conveyed, so that the composite mark conveys a different impression from that conveyed by the word alone.

Authored by Kathy Mytton and Sean McManis

6 min read

Dr August Wolff GmbH & Co. KG Arzneimittel v Combe International Ltd [2020] FCA 39 (3 February 2020)

On 3 February 2020, Dr August Wolff GmbH & Co. KG Arzneimittel (Dr Wolff) successfully appealed against a decision by the Registrar of Trade Marks, which refused registration of its VAGISAN trademark.

Background

The VAGISAN trade mark was filed by Dr Wolff on 27 May 2015 for a broad range of personal care products in classes 3 and 5.

This registration was successfully opposed by Combe International Ltd (Combe), the owner of prior VAGISIL trade mark registrations which also cover personal care products classes 3, 5 and 10.

A Delegate of the Registrar of Trade Marks refused registration of the VAGISAN trade mark on 29 September 2017 under s60 of the Trade Marks Act 1995 based on Combe’s reputation of its earlier VAGISIL trade mark.

Dr Wolff subsequently appealed this decision.

Grounds of Opposition

Section 44

The VAGISAN application covers the following goods:

Class 3: Soaps and cosmetics, all aforementioned goods not for the indication and application of tired legs and/or arms

Class 5: Pharmaceutical products, sanitary products for medical purposes; dietetic substances for medical purposes, all aforementioned goods not for the indication and application of tired legs and/or arms

(VAGISAN Goods).

The VAGISIL registrations cover the following goods:

Class 3: Medicated lotions and medicated creams; non-medicated products for feminine use

Class 5: Medicated products for feminine use; vaginal lubricants; medicated creams, gels, lotions

(VAGISIL Goods).

Dr Wolff accepted that the class 3 VAGISAN Goods are similar to the class 3 VAGISIL Goods.  However, it did not consider the class 5 VAGISAN Goods to be similar due to the “highly specialised” nature of the class 5 VAGISIL Goods.

Stewart J found that “pharmaceutical products” and “sanitary products for medical purposes” covered by the VAGISAN trade mark are similar to the class 5 VAGISIL Goods on the basis that:

(1) the goods would typically sold through the same trade channels (i.e. pharmacies, supermarkets and online);

(2) producers of pharmaceutical products might also produce medicated lotions and medicated creams; and

(3) producers of sanitary products for medical purposes might also produce medicated products for feminine use, medicated douches and various other goods.

On the issue of deceptive similarity, Stewart J found that both the VAGISAN and VAGISIL trade marks are likely to be understood as being associated with products to be used in relation to the female genital area. However, while the idea of VAG (or VAGI) is descriptive, the words VAGISAN and VAGISIL do not have a close phonetic resemblance and neither of the words lends itself to mispronunciation. Further, both words are invented words and the suffix elements SIL and SAN are quite distinct.

Stewart J also dismissed Combe’s argument that there is a greater likelihood of confusion as consumers of products for feminine use are not likely to pay attention to what they are purchasing.

The s44 ground of opposition was unsuccessful

Section 60

Section 60 requires a reputation amongst a significant or substantial number of people or potential customers in the relevant mark i.e. the potential customers of the VAGISAN goods. Although, there is not a significant distinction given the overlap in the goods provided by the VAGISAN and VAGISIL trade marks.

Combe sought to rely on evidence comprised of schedules of sales figures and consumption data for VAGISIL products, extracted from a computer database by IRi Australia. It argued that the evidence should be admissible as an exception to the rule against hearsay on the basis that it constitutes business records. Dr Wolff objected to the admissibility of the schedules, not the data contained in the schedules. However, Stewart J was satisfied that the schedules should be admitted.

Both Combe and Dr Wolff sought to tender survey evidence, although Dr Wolff’s evidence was in relation to consumer behaviour rather than Combe’s reputation. Dr Wolff objected to Combe’s survey reports on the basis that they were not business records of the survey companies or Combe itself. Stewart J was satisfied that the reports submitted form part of the records belonging to or kept by Combe in the course of, or for the purposes of a business. The survey evidence from both parties were admitted and Stewart J indicated that there is no reasons to suppose that the hearsay statements recorded in the reports are other than accurate.

There has been consistent use of the VAGISIL brand in Australia since 1986 for personal products for feminine use, which have been sold through approximately 6,400 supermarkets and pharmacies. Further, there has been significant advertising and promotional activity through various channels. Despite the relatively small market share based on the sales figures provided, Stewart J considered that reputation of the VAGISIL trade mark was established in Australia as at the priority date. However, the form of trade mark which enjoys reputation is the VAGISIL trade mark used in conjunction with a “V” Device, rather that VAGISIL on its own. It is used in this composite form:

Consequently, confusion between the trade marks is likely to be less in light of the distinctive “V” Device.

Combe was not able to establish that because of the reputation of the VAGISIL trade marks a significant or substantial number of potential customers might be confused or deceived by the VAGISAN mark such as to wonder whether there is any connection between it and VAGISIL.

Accordingly, the s60 ground of opposition was also unsuccessful

Section 59

As at May 2015, Dr Wolff had the intention to sell five VAGISAN products in Australia. Based on evidence provided on behalf of Dr Wolff, none of these products were directed for use on any part of the human body other than the female genital area. On this basis, Combe submitted that there was no intention to use the trade mark in relation to soaps and cosmetics for use on other body parts

Even though the goods were limited for use on a specific area of the body, Stewart J considered the fact that soap and cosmetic products were proposed to be introduced is sufficient intention to use the VAGISAN trade mark in respect of the designated goods.

The s59 ground of opposition was also unsuccessful

Decision

Combe failed to establish any ground of opposition and, therefore, Dr Wolff’s appeal was successful.

Combe subsequently filed an appeal to the Full Federal Court of Australia.

Takeaway

This decision is under appeal and it will be interesting to see if the first instance decision is maintained. Nevertheless, the decision provides some guidance regarding what might be admitted into evidence as business records, and the potential for difficulty establishing reputation in a word alone when it is used with other significant branding elements.

Other Opposition / Invalidity Actions

The VAGISAN trade mark has also been opposed by Combe in a number of other countries. The most recent decisions handed down were in Singapore and the United States.

Combe filed an application for declaration of invalidity with the Intellectual Property Office of Singapore based on the grounds of likelihood of confusion. Combe successfully invalidated the VAGISAN trade mark in Singapore, however, an appeal from this decision to the High Court is pending.

In the United States, the Trademark Trial and Appeal Board (TTAB) dismissed an opposition filed by Combe in the first instance. This decision was subsequently appealed to the US District Court. However, on appeal, the VAGISAN trade mark was found to be likely to cause confusion with the VAGISIL registration.

Authored by Danielle Spath and Sean McManis

4 min read

The relatively new “bad faith” (section 62A) ground of opposition can be a strong basis for action against misappropriation of a trade mark owners’ goodwill, where the more commonly used grounds of deceptive similarity with an earlier mark (section 44) and likelihood of confusion due to reputation in an earlier mark (section 60) would fail.

Recent Trade Marks Office decisions illustrate some types of exploitative conduct that can give rise to a finding of “bad faith”.

The issue

The key issue in all cases was whether Southcorp Brands Pty Ltd (SCB) met its onus of demonstrating that the applicant had acted in “bad faith” in filing its trade mark application.

Bad faith has been described in the following way:

“… mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character

(Fry Consulting Pty Ltd v Sports Warehouse (No 2) (2012) 201 FCR 565)

The Cases

SCB’s well known Penfolds” mark

SCB is a subsidiary of Treasury Wines Estate (TWE) Limited and produces wines under various well known marks, including “Penfolds”.

SCB filed evidence of the extensive reputation and promotion of its “Penfolds” wines, which have been in existence since 1844, and are labelled with the trade mark “Penfolds” in plain script or in red cursive script.

In each opposition case below, the applicant had applied to register its mark/s in relation to wines and other alcoholic beverages.

Facts in each case

Oppositions to “Barry Ford and “Ben Ford”
(Southcorp Brands Pty Limited v Li Li Shen [2019] ATMO 42 (26 March 2019)

SCB’s “Penfolds” Label

SCB filed evidence of use of the Chinese Characters  in relation to its “Penfolds” wines sold in China. Those characters are transliterated to “Ben Fu” – the Chinese phonetic approximation of “Penfolds”.  SCB also owns Australian registrations for its  and “Ben Fu” trade marks.

The applicant had repeatedly used its mark “Barry Ford” in red cursive font (similar to SCB’s font) combined with SCB’s  mark on its wine labels.  SCB also submitted evidence that the applicant had used trade dress similar to SCB’s, such as a red capsule attached to the bottle neck, red cursive font against a white label and the use of “BIN” to indicate wine vintages.

Prior to the date of filing, the Beijing High People’s Court had issued a decision regarding an application by SCB to remove one of the applicant’s Chinese trade mark registrations for non-use.  In that decision the Court recognised that the Chinese Characters   would be seen as identifying SCB’s wines.  The applicant was therefore clearly aware of SCB and its trade mark rights and reputation at the date of filing its application.

Opposition to “MAISON RICH”
(Southcorp Brands Pty Limited v BIN-VIN (Shanghai) Trading Co. Ltd [2020] ATMO 27 (24 February 2020)

The English translation of SCB’s Chinese Character version of the “Penfolds” mark is “Rush Rich”.  SCB was the owner of the trade mark MAISON DE GRAND ESPRIT.

The applicant’s mark combined the word “MAISON” with the word “RICH” – being the second word in the English translation of SCB’s Chinese Character version of “Penfolds”.

The applicant was part of a corporate group, with shared ownership and directors, which had applied to register various marks similar to SCB’s marks in the names of different, but related, entities.  SCB had opposed numerous applications filed by entities within the group and rather than defending those oppositions, new applications had been filed for additional marks similar to SCB’s in the name of different related entities.

Entities within the group had also been the subject of judgements in the Federal Court in Australia and the Shanghai Pudong District People’s Court for infringement of SCB’s marks or engaging in unfair competition through the making of false allegations. See for example Southcorp Brands Pty Ltd v Australia Rush Rich Winery Pty Ltd [2019] FCA 720 (3 May 2019) for the finding of infringement by some of the entities within the applicant’s group.

Again, the applicant was therefore clearly aware of SCB and its trade mark rights and reputation at the date it applied for “MAISON RICH”.

Opposition to mark


(Southcorp Brands Pty Ltd v Shanghai Benka Wines Co., Ltd [2020] ATMO 9 (29 January 2020)

The applicant had sought registration of various marks identical or similar to SCB’s marks in China and Australia, and one application in China had been opposed by the Opponent well before the filing date.

It had also produced wine labelling copying SCB’s trade dress by using similar script stylisation and colour schemes.

The applicant had also used a different company name for filing the Australian application to the name it had used to file the earlier Chinese applications which had been opposed by SCB. SCB argued (successfully) that this was intended “to obscure its true identity in order to prevent detection of its activity in Australia”.

Findings

In all three cases the Hearing Officer decided that each applicant was aware of the reputation in SCB’s “Penfolds” marks at the time of filing their application.  The pattern of behaviour in each case, such as adopting similar trade dress and trade mark stylisation to that used by SCB and applying for identical or similar marks to SCB’s in Australia and China in related company names, was found indicative of a desire to exploit SCB’s trade marks and reputation and to convey an association, affiliation or endorsement by SCB that did not exist.

The Hearing Officer found that the behaviour in each case fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons and constituted “bad faith”.\

Authored by Michelle Howe and Sean McManis