FEDERAL COURT OF AUSTRALIA

Allergan, Inc v Di Giacomo [2011] FCA 1540

ON APPEAL FROM THE REGISTRAR OF TRADE MARKS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The decision of the Registrar of Trade Marks be set aside.

3.    The opposition to the registration of Australian Trade Mark Application No. 1270294 be allowed.

4.    Australian Trade Mark Application No. 1270294 be refused.

5.    The respondent pay the applicant’s costs of this appeal and the opposition proceedings before the Registrar of Trade Marks.

6.    The applicant provide to the respondent copies of these orders by registered mail and also by standard mail by sending them prior to 5 pm on 2 December to the address 10 Tilford Place, Morley, Western Australia 6062.

7.    Orders 1 to 5 be stayed until 14 December 2011.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules.

ON APPEAL FROM THE REGISTRAR OF TRADE MARKS

REASONS FOR JUDGMENT

1        This is an appeal under s 56 of the Trade Marks Act 1995 (Cth) from a decision of the Registrar of Trade Marks. On 26 July 2011 the Registrar dismissed the applicant’s notice of opposition to the respondent’s application for registration of Trade Mark Application No. 1270294 for the mark, “No-Tox” in relation to “facial care products (cosmetic) in class 3” of Schedule 1 to the Trade Marks Regulations 1995 (Cth). The applicant, Allergan Inc, is the registered owner of a number of Australian registered trade marks comprising the word “BOTOX”. For the purposes of this hearing it is sufficient to concentrate on the registered trade mark no 1008655 for “Botox” in respect of goods in class 3, being “Cosmetics, face creams and lotions; skin creams and lotions”.

2        The appeal was heard on 30 November 2011. At the conclusion of the hearing I allowed the appeal and made the orders sought by the applicant. I undertook to publish reasons for the orders at a later date. These are my reasons.

3        The respondent did not appear at the hearing. As a precaution the appeal was called outside the Court but this elicited no response. The respondent also failed to appear at a directions hearing on 29 September 2011. In fact it appears that since filing the application for registration of the impugned trade mark the respondent has taken no part in any procedure concerning it. The applicant’s opposition to the mark’s registration was decided on the papers with no evidence or submissions from the respondent. Service of the notice of appeal was by registered post to the address given on the application for registration of the mark, 10 Tilford Place, Morley Western Australia 6062. The respondent has not entered an appearance in this proceeding.

4        In accordance with orders made at the directions hearing the applicant sent a copy of those orders, including the order listing the appeal for hearing on 30 November 2011, under cover of a letter from the applicant’s solicitors dated 30 September 2011. The letter was sent by registered post to the same address; it was returned to the applicant’s solicitors on or about 26 October 2011 marked “left unclaimed”. I can deduce from the markings on the envelope that notifications of there being an article for collection were sent by the postal authorities to the Morley address on 4 and 10 October 2011. I note however that the applicant’s evidence for the hearing of the appeal was also delivered by courier to that address without incident.

5        I am satisfied by the above evidence that the respondent was appropriately served with the appeal papers as well as the orders made at the directions hearing. That being so I am satisfied that the respondent was notified of the time, date and place of the hearing of the appeal. Nevertheless by way of further precaution I stayed the substantive orders for 14 days and directed the applicant to provide copies of the orders by standard and registered post to the respondent’s address of service and that orders 1-5 be stayed until 14 December 2011.

BACKGROUND

6        The respondent’s application for registration of the word “No-Tox” was made on 2 November 2008. The date of the application is the priority date for the No-Tox trade mark; Trade Marks Act, ss 12, 72. On 3 February 2009 the Registrar of Trade Marks (Registrar) accepted the application and pursuant to s 34 of the Act, notified both parties in writing of the decision. The application was then advertised as “accepted for registration” in the Official Journal of Trade Marks on 5 March 2009.

7        On 5 June 2009 pursuant to s 52 of the Act Allergan filed a notice of opposition (notice) to the registration of No-Tox. A copy of that notice was also sent to the respondent. As mentioned previously, the respondent did not file any evidence or submissions in respect of the applicant’s opposition to registration of the No-Tox mark. In support of its grounds of opposition Allergan relied on a statutory declaration made on 15 January 2010 by Christine Valda Green, a sales and marketing director of Allergan together with exhibits and provided written submissions.

8        The Registrar’s delegate held that there was no deceptive similarity between the Botox and No-Tox marks and no likelihood of confusion arising from the reputation of the applicant’s Botox mark. On 26 July 2011 she notified the parties of her decision in the following terms:

I find that the opponent has failed to establish any of the grounds of opposition on which it is relying. I direct that application 1270294 may proceed to registration one month after the date of this decision.

If the Registrar is served with a notice of appeal before the trade mark is registered I direct that registration may not proceed until the appeal has been discontinued, or, in the event of a decision by the court, if registration is not contrary to any court order.

THE APPEAL

Nature of appeal

9        An appeal from a decision of the Registrar of Trade Marks or the Registrar’s delegate is by way of a hearing de novo. In New England Biolabs Inc v F Hoffman-La-Roche AG (2004) 141 FCR 1 at [44] the Full Federal Court, referring to an appeal under s 104 of the Patents Act 1990 (Cth) from the decision of the Commissioner of Patents said:

The use of the word “appeal” by Parliament does not confer appellate jurisdiction. There is no doubt that the nature of the appeal provided for in s 104(7) of the Act is one such as to confer original jurisdiction upon the Court. The Court approaches the matter for the first time exercising the judicial power of the Commonwealth, not in order to decide whether the executive decision maker was right or wrong, or otherwise to correct error in the executive decision, but to deal with a subject matter, a controversy, for the first time: Jafferjee v Scarlett (1937) 57 CLR 115, at 119-120, 126; the Bayer case; and Kaiser Aluminium & Chemical Corporation v Reynolds Metal Co (1969) 120 CLR 136 at 142.

10        The same approach has been adopted in relation to appeals from decisions of the Registrar of Trade Marks. In Pfizer Products Inc v Karam (2006) 237 ALR 787 at [5], Gyles J observed that the Court stands “in the shoes of the registrar but decides the issue judicially”: see also Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [32] per French J, Tamberlin J agreeing.

Standard of proof

11        The applicant bears the onus of proof in establishing the ground or grounds of opposition. The standard of proof has been the subject of considerable discussion in the cases and the issue was discussed at length by Gyles J in Pfizer Products at [6]-[26]. It was there submitted by the applicant for registration that the presumption of registrability implied by s 33 of the Act also implied that a ground of opposition to registration must “be clearly established”, that is to a standard beyond the balance of probabilities. After a detailed examination of the authorities Gyles J rejected this submission as inconsistent with the language of s 55 which directs that in deciding whether to accept or reject a trade mark for registration the Registrar must have regard “to the extent (if any) to which any ground on which the application was opposed has been established”. His Honour concluded at [21] and [26]:

Whether a ground of opposition has been ‘established’ is a conventional concept requiring no particular elucidation. In my opinion, there is no basis upon which the section can be read as ‘the extent (if any) to which any ground on which the application was opposed has been clearly established’, particularly where that implication changes the practical operation of the section by imposing a special high onus of proof. … I cannot find anything in the structure or content of other provisions of the 1995 Act that would point to reading s 55 other than according to its ordinary meaning.

…

I am faced with the clear words of the statute, on one hand, and the opinions of various judges, on the other. There is no binding Full Court authority. I cannot find any instance where a single judge has actually applied the higher standard. In my opinion, in this case, comity does not demand that I depart from my view as to the meaning of the statute. ‘The fundamental responsibility of a court when it interprets a statute is to give effect to the legislative intention as it is expressed in the statute’ per Mason J in Babaniaris v Lutony Fashions Pty Ltd (1987) 163 CLR 1; cited with approval by Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ in John v Federal Commissioner of Taxation (1989) 166 CLR 417 at 439. I will, therefore, approach the matter on the basis that the opponent has to establish a ground of opposition, although not clearly establish such a ground, whether in a summary fashion or otherwise.

12        I respectfully agree with Gyles J’s analysis. As the applicant pointed out his Honour’s view has been accepted in a number of first instance decisions: Kimberly-Clark Worldwide, Inc v Goulimis (2008) 253 ALR 76 at [8(2)] per Jagot J; Television Food Network, GP v Food Channel Network Pty Ltd (No 2) (2009) 80 IPR 314 at [36]-[37] per Collier J; Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60 at [26] per Sundberg J: Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519 at [39] per Kenny J. I am also persuaded by the argument put in the applicant’s written submissions that other first instance decisions which have applied the higher standard of proof appear to have been the result of “misplaced deference” to dicta in Lomas v Winton Shire Council (2003) AIPC 91-839 where the Full Federal Court said that “on one view” an opposition should only be upheld if the trade mark should clearly not be registered. In the face of the Full Court’s express application of the ordinary balance of probabilities standard at [45] of the Court’s reasons, the comment was clearly obiter. In my view the ordinary balance of probabilities standard is the standard according to which grounds of opposition must be established.

Grounds of opposition

13        On 16 August 2011 the applicant filed a notice of appeal in this Court under s 56 of the Act. The applicant has not pursued some of the grounds relied on before the delegate of the Registrar. It presses only two grounds of appeal, namely:

(a)    the NO-TOX mark is substantially identical with, or deceptively similar to, one or more of the Applicant’s registered trade marks identified in the annexed schedule (BOTOX marks) in relation to similar goods, which has a priority date earlier than the priority date for the registration of the NO-TOX mark; or

(b)    the Applicant’s BOTOX marks had, before the priority date for the registration of the NO-TOX mark, acquired a reputation in Australia, such that the use of the NO-TOX mark by the Respondent would be likely to deceive or cause confusion.

14        Grounds for opposing registration of a trade mark are contained in Part 5, Division 2 of the Act. Section 57 provides:

The registration of a trade mark may be opposed on any of the grounds on which an application for the registration of a trade mark may be rejected under this Act, except the ground that the trade mark cannot be represented graphically.

15        Pursuant to s 57, the applicant relied on s 44 of the Act. Relevantly, s 44 provides that registration of a trade mark must be rejected if it is “substantially identical with, or deceptively similar to” another registered trade mark “in respect of similar goods or closely related services” and its priority date is “not earlier” than that of the other trade mark.

16        The applicant also relied on s 60 which is contained in Part 5, Division 2 and provides:

The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

(a)    another trade mark had, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

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

17        Mr Darke, counsel for the applicant, submitted that while there are differences between the two grounds of opposition, in this case “the critical question for each is whether there is a real risk that use of the No-Tox mark in relation to cosmetic facial care products will cause some ordinary consumer to wonder if there might not be some association between those products to which the No-Tox mark is applied and products bearing the Botox mark”. I accept that this is so in this particular case and therefore it is not necessary for me to consider the two grounds separately. Nevertheless, given the very considerable evidence of the reputation of the Botox mark it is understandable that Mr Darke concentrated his submissions on the provisions of s 60.

The applicant’s evidence

18        In support of its opposition to registration of the No-Tox mark, the applicant relied on the affidavit of Odette Margaret Gourley sworn 28 October 2011, its exhibits and annexures. Among the annexures was the statutory declaration sworn on 15 January 2010 by Christine Valda Green. Ms Green is a sales and marketing director of Allergan Australia Pty Ltd, the Australian subsidiary of the applicant. Ms Green’s declaration had been before the Registrar’s delegate and parts of it were relied on as evidence in this appeal.

19        In order to make out a ground of opposition to the No-Tox trade mark under s 60 the applicant must establish that the Botox mark has acquired a reputation in Australia which might give rise to confusion with the No-Tox mark. The applicant adduced evidence directed to establishing such a reputation. The evidence showed that since 1989 Allergan has manufactured and distributed pharmaceutical products under the Botox mark and has been doing so in Australia since November 1993 when the Therapeutic Goods Administration (TGA) approved the Botox product. The Botox mark identifies Allergan’s Botulinum Toxin Type A which is a purified neurotoxin product that acts specifically on nerve cells. It is manufactured and sold by Allergan and most popularly known for its use as a medical cosmetic treatment aimed at reducing or removing facial lines.

20        The cosmetic benefits of Botox were recognised when its use for eye muscle disorders appeared to soften frown lines between the eyebrows. Its use as a cosmetic treatment was approved by the United States Food and Drug Administration in April 2002 and by the TGA in March 2002. In Australia the Botox branded product can be administered only by a medical practitioner or by a nurse under the direction of a medical practitioner.

21        Material exhibited to Ms Green’s statutory declaration included newspaper articles, press releases and financial reports all of which supported Ms Green’s conclusion that “Allergan enjoys a substantial reputation and goodwill in the BOTOX trade marks in Australia”. Further support for this proposition is to be found in various annexures to the affidavit of Ms Gourley which included newspaper articles relating to the Botox mark and survey reports from 2003-2008 prepared by AC Nielsen. In particular the surveys yielded the information that: females aged from 25 to 54 were aware of Botox as a cosmetic product; sales between 2000 and 2008 had increased from $15.2 million to $35.2 million; and Allergan had increased spending between 2000 and 2008 on marketing and promotion from $2.1m to $8.6m. In addition the evidence also showed that Botox had received extensive media coverage during those years in all major newspapers in Australia as well as other media.

Establishing reputation – s 60 of the Act

22        The requirement of reputation in s 60 refers to recognition of the relevant mark by the public generally: McCormick & Co Inc v McCormick (2000) 51 IPR 102 at [81]. In McCormick at [86] Kenny J observed:

In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product: see, e.g., Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer Plc v Effem Foods Pty Ltd (2000) AIPC ¶91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd (2001) 51 IPR 1 (“Gymboree”), Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 (“Nettlefold”), in which Heerey J relied upon the public visibility of the applicant’s marks over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of s 28 of the 1955 Act existed.

23        As outlined above the evidence of reputation in this case is very considerable and, in my view, it extends well beyond high volume of sales and substantial advertising expenditures and other promotions to which her Honour referred. The written submissions of the applicant accurately summarised the import of its evidence as follows:

First, the BOTOX product was widely known in Australia, by reference to the BOTOX marks, as a cosmetic product or procedure. The AC Nielsen survey reports … show that in the years 2003 to 2008, between 74% and 94% of female survey respondents aged from 25 to 54 years were aware of “BOTOX” as a cosmetic product or procedure.

Secondly, sales of the BOTOX product bearing the BOTOX marks were very high and growing both in Australia and globally. Between 2003 and 2008, Australian annual sales increased from $15.2 million to $35.9 million … Between 2000 and 2008, global annual sales increased from US$239.5 million to US$1.31 billion …

Thirdly, Allergan had spent substantial amounts of money, in Australia and globally, promoting the BOTOX product under the BOTOX marks. Between 2003 and 2008, Australian annual marketing and promotional expenditure increased from $2.1 million to $8.6 million…. Between 2000 and 2008, global annual promotional expenditure increased from US$75.4 million to US$442 million …

Fourthly, the BOTOX product had been the subject of extensive Australian media coverage in which it was generally identified by reference to the BOTOX marks. Examples of Australian media coverage include the Melbourne The Age newspaper, the Sydney Morning Herald newspaper, the Canberra Times newspaper, the Australian Financial Review newspaper, the Grazia magazine website, the Melbourne Herald Sun newspaper, Hobart’s The Mercury newspaper, Perth’s The Sunday Times newspaper and Sydney’s The Daily Telegraph newspaper.

It is also important to note the nature of the considerable reputation the BOTOX marks had as at 2 November 2008. That reputation was in connection with a general cosmetic product or procedure for the treatment of facial lines, rather than one specifically involving the use of botulinum toxin. This is clearly shown by the AC Nielsen survey reports … which record that many more survey respondents were aware of “BOTOX” than were aware of botulinum toxin therapy. In contrast to the 74% to 94% of respondents aged 25 to 54 who were aware of BOTOX …, only 16% to 23% of such respondents were aware of botulinum toxin therapy.

24        Bearing in mind that the priority date of the No-Tox mark is 28 November 2008, the evidence referred to above is more than sufficient to establish that the Botox trade mark had acquired a substantial reputation prior to that date. That being so the question is whether because of that reputation the use of the No-Tox mark would be likely to deceive or confuse.

Likelihood of deception or confusion arising from the reputation of the Botox marks

25        While the mere possibility of confusion is not sufficient to meet the statutory criterion it is not necessary that there be an actual probability of deception or confusion. What is required is a “real, tangible danger” of it occurring: Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595 per Kitto J. In their joint judgment at 608, Dixon CJ, McTiernan, Webb, Fullagar and Taylor expressed their agreement with this comment. Justice Kitto also set out a number of propositions that applied to the issue of deceptive similarity under the Trade Marks Act 1955 (Cth). In Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 at [50] French J (with whom Tamberlin J agreed) held that the “essential elements” of the propositions stated by Kitto J also applied to the Trade Marks Act. Leaving aside questions of onus, his Honour restated them thus:

(i)    To show that a trade mark is deceptively similar to another it is necessary to show a real tangible danger of deception or confusion occurring. A mere possibility is not sufficient.

(ii)    A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.

It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.

(iii)    In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.

(iv)    The rights of the parties are to be determined as at the date of the application.

(v)    The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained.

In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353 at 362:

“the question whether there is likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion.”

26        Applying these principles to the present matter, I accept the applicant’s submissions that there is a real risk of public confusion and deception if goods in respect of which registration of the No-Tox mark is sought were to be marketed and sold under that mark. The applicant emphasised the visual and aural similarity of the words No-tox and Botox in that they are “of similar length and contain the same number of characters”; they are both disyllabic; and have in common the aurally identical “otox” sequence of characters. In addition it was submitted that “any aural difference caused by the first characters of each mark (“N” and “B”) is mitigated by the emphasis in the first vowel sound, a long “Ō”.

27        The Botox mark No 1008655 is registered in respect of goods which include cosmetics, face creams and lotions generally. Registration of the No-Tox mark is sought in respect of cosmetic facial care products. These are similar kinds of goods which serve similar purposes. Given this similarity the applicant submitted that they are likely to be sold in similar trade outlets including cosmetic clinics and other medical practices. This must be accepted even if No-Tox products were not subject to the same regulatory restrictions as Botox products and were able to be distributed through a wider range or outlets. This difference is not sufficient to remove the risk of confusion.

28        Given the substantial reputation of the Botox marks there is, in my view a real and tangible danger that consumers would view the Botox and No-Tox products as complementary in the same way as “coke” and “diet coke” might be seen as complementary products.

29        For these reasons I am satisfied that the reputation of the Botox marks is such that the use of the No-Tox mark would be likely to deceive or cause confusion. Registration of the No-Tox mark must be refused pursuant to s 60 of the Act. As the applicant submitted, if registration were permitted the respondent would be enabled to “free ride” on the substantial reputation of the Botox marks.

Section 44(1) of the Act

30        The ground for rejecting, or in this case opposing, the registration of a trade mark in s 44 of the Act is based on substantial identity or deceptive similarity between a registered trade mark and the mark for which registration is sought. It is necessary that both trade marks be “in respect of similar goods or closely related services” and that the priority date of the unregistered mark is “not earlier” than that of the other trade mark. Under s 44 the reputation of the registered trade mark is not taken into account.

31        As previously mentioned in considering this ground it is sufficient to consider only one of the Botox marks, namely the applicant’s registered Australian trade mark No 1008655 which is the word, Botox, registered in respect of “cosmetics, face creams and lotions; skin creams and lotions. This trade mark has a priority date of 12 March 2004 which is well before 2 November 2008, the priority date of the No-Tox mark.

32        The applicant does not submit that the two marks are substantially identical but relies on their deceptive similarity. Section 10 of the Act provides that “a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion”.

33        In my view the factors considered in [26] and [27] above are likely to cause deceive or cause confusion between the two trade marks even without recourse to the Botox reputation. Accordingly, registration of the No-Tox mark must also be refused pursuant to s 44(1) and s 57 of the Act.

CONCLUSION

34        For the above reasons, I was satisfied at the conclusion of the hearing on 30 November 2011 that the applicant’s opposition to the registration of the No-Tox mark should be upheld. I therefore ordered that the appeal from the decision of the Registrar of Trade Marks be allowed, the decision set aside and the Australian Trade Mark Application No 1270294 be refused. I also ordered that the respondent pay the applicant’s costs of this appeal and the opposition proceedings before the Registrar of Trade Marks.

35        As mentioned earlier the respondent has not entered an appearance in this proceeding. In an exercise of abundant caution I also ordered that the above orders be stayed to 14 December 2011 and that the applicant send copies of the orders by registered and standard mail to the address given by the respondent on the application for registration of the No-Tox trade mark. In an affidavit of Odette Margaret Gourley sworn 19 January 2012 Ms Gourley deposes to having caused copies of the orders to be served on the respondent in accordance with my orders. There was no application by the respondent in respect of the orders by 14 December and accordingly the orders were final from that date.

Associate:

Dated:    30 January 2012