Case: Blount Inc v Registrar of Trade Marks [1998] FCA 440 ; (1998) 83 FCR 50
Outcome: considered
41(2) requires the Registrar to reject an application where the purported trade mark is "not capable of distinguishing the applicant's goods ... in respect of which the trade mark is sought to be registered from the goods ... of other persons". Whether a trade mark is "capable of distinguishing" goods from those sold by other traders is to be determined by reference to subss 41(3)-(6). As Branson J said in Blount Inc v Registrar of Trade Marks [1998] FCA 440 ; (1998) 83 FCR 50 ( Blount ) at 56, subss 41(3)-(6) are "designed to control the process by which the Registrar is to reach a conclusion as to whether the trade mark for which registration is sought is capable of distinguishing the applicant's goods". That "process" involves the following steps: (a) The Registrar must first "take into account the extent to which the trade mark is inherently adapted to distinguish" the relevant goods from the goods of others: subs 41(3); (b) If that consideration leads to a conclusion that the trade mark is capable of distinguishing the goods from those of others, then, so long as the Registrar is not satisfied that any other grounds for rejecting the IRDA exist, she must accept the IRDA: reg 17A.24 (cf s 33 of the Act); (c) However, if the Registrar is "unable to decide" whether the trade mark is capable of distinguishing the goods by the "inherently adapted" consideration alone, then either subs 41(5) or subs 41(6) applies: see subs 41(4). Subsection 41(5) will apply if the Registrar finds that the trade mark "is to some extent inherently adapted to distinguish the ... goods ... from the goods ... of other persons but is unable to decide, on that basis alone, that the trade make is capable of so distinguishing the ... goods". By contrast, subs 41(6) will apply if the Registrar finds that the trade mark "is not to any extent inherently adapted to distinguish". (d) If the Registrar finds the trade mark is to some extent inherently adapted (subs 41(5)), the Registrar is then required to consider whether the trade mark "does or will distinguish the ... goods as being those of the applicant", by taking into account the combined effect of the following three matters (par 41(5)(a)): the extent to which the trade mark is inherently adapted to distinguish; the use, or intended use, of the trade mark by the applicant; and any other circumstances. (e) After taking those matters into account, the trade mark is "taken to be capable of distinguishing the applicant's goods ... from the goods ... of other persons" only if the Registrar is "satisfied" that the trade mark in fact does or will so distinguish the goods: par 41(5)(b). If the Registrar is not so satisfied, then the trade mark is taken not to be capable of distinguishing (see par 41(5)(c)), a ground for rejecting the IRDA will thereby exist and the Registrar is then required to reject the IRDA: reg 17A.24(3). (f) In the alternative scenario that the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish (subs 41(6)), then the trade mark is taken not to be capable of distinguishing the goods unless the applicant "establishes" that, because of the extent to which the applicant has used the trade mark prior to the relevant filing date of the application, the trade mark does in fact distinguish the goods as being those of the applicant: pars 41(6)(a) and (b). Prior to the commencement of the Act on 1 January 1996, "shape" trade marks were not capable of registration under Australian trade mark legislation: see Trade Marks Act 1955 (Cth) (the 1955 Act). However they are now recognised in the current Act. Section 17 defines "trade mark" as: a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person. The nature of an "appeal" to the Federal Court under s 35 (and in respect of a decision in an opposition proceeding under s 56) has been discussed at length in several cases: see Blount 83 FCR at 58D-59A (Branson J); Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [21] - [22] (French J); Registrar of Trade Marks v Woolworths Ltd [1999] FCAFC 1020 ; (1999) 93 FCR 365 ( Woolworths ) at [32]-[34] (French J). In hearing an appeal pursuant to s 35, the Court exercises its original jurisdiction and conducts a hearing de novo. It is to determine on the merits the same question that was before the Registrar namely, whether or not the trade mark should be accepted and in doing so, it is to apply the same legal criteria that the Registrar is required to adopt under the Act. The Registrar's decision is not to be presumed correct but the Court is entitled to have regard to the Registrar's opinion as that of a skilled and experienced person in the field of trade mark registrations: Woolworths [1999] FCAFC 1020 ; 93 FCR 365 at [33] (French J). Presumption of registrability and standard of proof In Blount 83 FCR at 58C, Branson J took the view that the question under s 41(2) whether a mark is capable of distinguishing is "governed entirely" by subss 41(3) (6). Accordingly, her Honour considered that it is not the case, as might be expected from the terms of s 33, that the Registrar must accept an application if he or she is uncertain whether the mark is capable of distinguishing an applicant's goods. Her Honour's analysis of s 41 has been followed in a number of cases, including Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177 ; (2000) 47 IPR 579 ( Ocean Spray ) and Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd [2004] FCA 968 ; (2004) 61 IPR 257 ( Austereo ). Reconciling s 41(4) and Branson J's decision in Blount , with the presumption and French J's decision in Kenman Kandy , is not entirely free from difficulty. The matter is further complicated by the fact that the onus is reversed under s 41(5) (the Registrar must be "satisfied" that the mark does or will distinguish) and s 41(6) (the applicant must "establish" that the mark does distinguish). In its submissions, the Registrar accepts that the presumption applies in relation to s 41(3), but says that the use of the term "satisfied" in s 41(5) suggests that the presumption no longer applies once the inquiry moves to s 41(5). I agree. Sections 41(3)-(6) contemplate that there are degrees to which a mark might be inherently adapted to distinguish: see Kenman Kandy [2002] FCAFC 273 ; 122 FCR 494 at [82] (Lindgren J); Austereo [2004] FCA 968 ; 61 IPR 257 at [35] (Finn J). The ultimate question under s 41(3) is whether the mark is inherently adapted to a sufficient degree to conclude that it is "capable of distinguishing". In my view, the effect of the presumption of registrability on s 41(3) is that, in considering whether a mark is capable of distinguishing by reason of the "inherently adapted" criteria, it should be presumed that the mark is sufficiently adapted unless the Registrar is satisfied otherwise on the balance of probabilities. If the Registrar is otherwise satisfied, then he or she will be "unable to decide the question" (see s 41(4)) whether the mark is capable of distinguishing on the basis of any inherent adaptation alone, and must then proceed to consider s 41(5) or (6). Under those provisions, the presumption no longer has any operation, as the applicant is then required to either "satisfy" the Registrar (s 41(5)), or "establish" (s 41(6)), that the relevant criteria set out therein is met. As Branson J said in Blount 83 FCR at 56, referring to Rejfek v McElroy [1965] HCA 46 ; (1965) 112 CLR 517 at 521, a test of satisfaction requires the Registrar to "be persuaded of the matter according to the balance of probabilities". In short, Guylian contends that its long standing and extensive sales and promotion of its sea shell range with the seahorse shape beginning in 1980 and continuing up to the priority date (16 April 2002) and beyond demonstrate that the shape itself has been used as a trade mark and was therefore capable of distinguishing Guylian's chocolate goods as at the priority date. By reference to its annual retail sale figures and marketing expenditure (see [39] above), Guylian emphasises that its sales, advertising and promotion of the sea shell range with the seahorse shape has been not only significant in scope but continuous over a long period of time. It refers to its promotional material, including its chocolate box packaging, and placed particular reliance on its seahorse shaped boxes, which it commenced selling in 1999, together with their related point of sale display units. It points also to its relationship with the Project Seahorse initiative and some of the advertising exposure that the initiative has provided. In the circumstances, it says, the evidence of large, sustained sales and promotion bears out the "common sense" approach suggested by Branson J in Blount 83 FCR at 61G: Nonetheless, common sense suggests that significant promotion and use of a trade mark amongst people concerned with the relevant market will have a tendency to enhance, rather than diminish, the trade mark's capacity to distinguish the goods in respect of which it is used from the goods of others. Certainly, the absence of evidence of promotion and use is likely to assume significance where distinctiveness resulting from use is in issue. As has become common in trade mark registration appeals, Guylian seeks to rely on the ACNielsen survey results as evidence of an association by consumers of the seahorse shape with Guylian, an association it says is "clear" and "strong" and demonstrats that Guylian has been, and is, using the shape as a badge of origin. Particular reference was made to the survey responses being "unprompted" (ie respondents were not, for example, provided with brand names and asked to choose between them), as well as the fact that the Registrar did not, whether by cross examination or opposing expert evidence, controvert any of Mr Callaghan's evidence, most notably his conclusions (1) that consumers' association of the shape with Guylian was of a "very high level", and (2) the strength of the association with Guylian, when compared to associations made with other brands, was statistically "very significant". In the absence of evidence from the Registrar, Guylian says, any attack on Mr Callaghan's conclusions should be given no weight. Registrar's submissions