Ocean Spray Cranberries Inc v Registrar of Trade Marks [2000] FCA 177 (25 February 2000)

Last Updated: 25 February 2000

FEDERAL COURT OF AUSTRALIA

Ocean Spray Cranberries Inc v Registrar of Trade Marks

2000 [FCA] 177

TRADE MARKS - Appeal against refusal of registration - whether mark CRANBERRY CLASSIC is not capable of distinguishing applicant's goods - Whether mark has become distinctive of applicant's goods.

Trade Marks Act 1995, SS 17, 33, 35 and 41

OCEAN SPRAY CRANBERRIES INC v REGISTRAR OF TRADE MARKS

N996 of 1999

WILCOX J

SYDNEY

25 FEBRUARY 2000

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N996 of 1999

BETWEEN:	OCEAN SPRAY CRANBERRIES, INC APPLICANT
AND:	REGISTRAR OF TRADE MARKS RESPONDENT
JUDGE:	WILCOX J
DATE OF ORDER:	25 FEBRUARY 2000
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The applicant, Ocean Spray Cranberries Inc, pay the costs of the respondent, Registrar of Trade Marks.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N996 of 1999

BETWEEN:	OCEAN SPRAY CRANBERRIES, INC APPLICANT
AND:	REGISTRAR OF TRADE MARKS RESPONDENT

JUDGE:	WILCOX J
DATE:	25 FEBRUARY 2000
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 WILCOX J: This is an appeal against a decision of the Registrar of Trade Marks, by his delegate Ian Thompson, to "refuse to register" trade mark application 753694. The basis of Mr Thompson's decision was that the trade mark did not satisfy the requirements of s41 of the Trade Marks Act 1995. This conclusion was not reached in opposition proceedings under Part 5 of the Act but, rather, after a hearing at which Mr Thompson considered two grounds for rejection identified by the examiner who reported on the application.

2 Despite the words used by Mr Thompson in his reasons, it seems his decision was to reject the application pursuant to s33(3) of the Act; so the matter comes to this Court under s35(b) of the Act.

3 The applicant in this Court is the applicant for registration of the trade mark, Ocean Spray Cranberries Inc ("Ocean Spray"). The respondent is the Registrar of Trade Marks.

The facts

4 Ocean Spray is a corporation formed in the United States, apparently in Massachusetts where it is currently based. The corporation is predominantly owned by cranberry growers and its main business is the manufacture and distribution of a range of fruit juice drinks made from cranberries and other fruits. For the purposes of distribution, it uses associated companies and other agents.

5 With a view to moving into the Australian market, in 1993 Ocean Spray retained an Australian marketing consultant, Quinlan Enterprises Pty Ltd. The principal of that company, Raymond Brian Quinlan, engaged in discussions with various retailers, including the major supermarket chains, and a food broker. As a result of these discussions, Ocean Spray decided the most practical method of distributing its products in Australia would be for a local manufacturer to make up the juices, using an essence despatched by Ocean Spray from America and Australian additives. An arrangement to that effect was negotiated with Effem Foods Pty Ltd, trading as MasterFoods ("Effem"). A formal agreement was made between Ocean Spray and Effem on 3 July 1995 and production commenced shortly thereafter. Samples of the drinks were provided to various retailers and the range of drinks was launched to the Australian public in August/September 1995. The launch involved an advertising campaign and other promotional activities.

6 Ocean Spray released onto the Australian market six different drinks. Apparently, each drink was offered in both 500 ml and 1.5 litre containers. All the drinks bore labels that were identical, apart from the name of the drink and illustrations of the relevant fruit. All bore Ocean Spray's registered trade mark, which consists of the words "Ocean Spray", set against a wave-like blue background. All the labels described the drink as "Distinctively Refreshing". All contained a two or three word block-lettered identification of the drink contained in the bottle: RASPBERRY CRANBERRY, RUBY RED GRAPEFRUIT, CRANBERRY APPLE, CRANBERRY BLACKBERRY, PINK GRAPEFRUIT and CRANBERRY CLASSIC. The names of the juices were printed in black letters on a coloured panel that exceeded in size the area occupied by the Ocean Spray trade mark. The presentation of the words CRANBERRY CLASSIC, on the labels of the bottles containing cranberry fruit juice drink, was identical to the presentation of the words identifying the other juices. In each case the words appeared immediately under the registered Ocean Spray trade mark; and each set of descriptive words was given an identical degree of prominence.

7 Ocean Spray's drinks have sold well in Australia. The company placed before the Court detailed evidence about sales values and volumes. As Ocean Spray regards this material as commercially sensitive, I will not summarise it in these reasons. It appears from this material that the company decided to discontinue the 500 ml bottle size in 1998 and has recently introduced a 1 litre bottle. These changes do not affect the overall picture, conveyed by the evidence, of steadily increasing sales. By the date of the application for registration of the words CRANBERRY CLASSIC as a trade mark, 28 January 1998, sales of that drink were worth some millions of dollars per year. Although expenditure on advertising and other promotion was well down on that incurred in connection with the product launch in 1995 and in the two succeeding financial years, it was still running at several hundred thousand dollars per year.

The Registrar's decision

8 Ocean Spray made application to register the mark CRANBERRY CLASSIC in Class 32 of the Register of Trade Marks relating to "fruit juices, fruit drinks and soft drinks". On 13 May 1998 an examiner of trade marks reported on the application, noting grounds for rejection under both s41 and s44 of the Trade Marks Act.

9 Section 44(1) requires the rejection, under some circumstances, of an application for registration of a trade mark that is substantially identical with, or deceptively similar to, another mark. Notwithstanding the examiner's view, Mr Thompson concluded this ground of rejection did not apply. No complaint is made about that conclusion. No argument based on s44 is put in this proceeding and it is unnecessary to say more about it.

10 However, Mr Thompson upheld the examiner's opinion concerning the application of s41. His decision to do so gives rise to this appeal. Section 41 reads as follows:

"41(1) For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

(2) An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

(3) In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

(4) Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a) the Registrar is to consider whether, because of the combined effect of the following:

(i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

(ii) the use, or intended use, of the trade mark by the applicant;

(iii) any other circumstances;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services - the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and

(c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services - the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons.

(6) If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a) if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant - the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b) in any other case - the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons."

11 The scheme of these provisions was analysed and explained by Branson J in Blount Inc v Registrar of Trade Marks [1998] FCA 440; (1998) 40 IPR 498 at 504-505. It will facilitate understanding of Mr Thompson's reasons for decision if I set out the critical part of her Honour's exposition:

"Subsections (3)-(6) of s41 of the Act 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 or services in respect of which the trade mark is sought to be registered (the designated goods or services). If the trade mark is not so capable, the application for its registration must be rejected: s41(2). Subsection (3) requires the registrar first to `take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons'. Having taken such matter into account, it is theoretically open to the registrar to conclude:

(a) that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and capable, on that basis alone, of so distinguishing the designated goods or services; or

(b) that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or

(c) that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of so distinguishing the designated goods or services.

The structure of s41 of the Act dictates that if the registrar reaches conclusion (a) above, then he or she will decide the question whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons by reaching the answer that it is so capable by reason of its inherent adaptability to distinguish: s41(2) and (3). The registrar will, in such circumstances, be required, by reason of the terms of s33(1) of the Act, to accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application.

If the registrar reaches conclusion (b) or (c) above, he or she is, within the meaning of s41(4) `unable to decide the question'. That is, he or she is unable, simply by taking into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services, to answer the question whether or not the trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons.

If the registrar reaches conclusion (b) above, then the provisions of paras (a) and (b) of s41(6) are brought into operation. If the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the registrar will not reject the application pursuant to s41(2). The registrar will, in such circumstances, accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application: s33(1). If the applicant fails to establish that because of the extent to which the applicant has used the trade mark before the filing date of the application, the trade mark does distinguish the designated goods or services as being those of the applicant, the registrar must reject the application pursuant to s41(2).

If the registrar reaches conclusion (c) above, then the provisions of paras (a), (b) and (c) of s41(5) are brought into operation. If the registrar, having considered the combined effect of the matters listed in subparas (i), (ii) and (iii) of s41(5)(a), is satisfied that the trade mark does or will distinguish the designated goods or services as being those of the applicant, he or she will not reject the application pursuant to s41(2). The registrar will, in such circumstances, accept the application unless he or she is satisfied that the application has not been made in accordance with the Act, or that there are grounds, independent of capacity to distinguish, for rejecting the application: s33(1). If the registrar, having considered the combined effect of the matter listed in subparas (i), (ii) and (iii) of s41(5), is not satisfied that the trade mark does or will distinguish the designated goods as being those of the applicant, the registrar must reject the application: s41(2)."

12 In his reasons for decision, Mr Thompson referred to dictionary definitions of the word "classic", including "[o]f the first class, of the highest rank or importance; approved as a model; standard, leading". He went on:

"The word CRANBERRY denotes the fruit from which the product, a fruit juice, is made. The words that comprise the trade mark therefore denote that the goods are standard Cranberry fruit juices or first class Cranberry fruit juices. Having read the evidence submitted by the applicant, it is obvious that it is using the words in the former sense, that is, to denote its standard cranberry juice. I refer to my discussion of the evidence, above, where I observed that the applicant is using the words CRANBERRY CLASSIC in exactly the same manner that it is using the words RUBY RED GRAPEFRUIT, CRANBERRY APPLE, CRANBERRY BLACKCURRANT or PINK GRAPEFUIT [sic]. In other words, it is using the words in a way that they appear to denote only that the contents of the bottle are its standard cranberry juice with no additions.

The word CLASSIC does not gain any inherent distinctiveness through its juxtaposition with the word CRANBERRY since the expression CRANBERRY CLASSIC is more specific about the nature of the goods than is the word CLASSIC, solus."

13 Mr Thompson referred to the observation of Kitto J in Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 at 515: "the more apt a word is to describe the goods, the less inherently apt it is to distinguish them as the goods of a particular manufacturer." After referring to another case, he said:

"With these tests in mind, I conclude that the words CRANBERRY CLASSIC lack any inherent adaptability to distinguish the applicant's goods from those of other traders as, (both in the sense of indicating that juices are top quality cranberry juice and in the sense of being standard cranberry juice), the trade mark is one that other traders are likely in the ordinary course of their businesses, and without any improper motive, to desire to use upon or in connection with their goods."

14 Mr Thompson said it followed that it was not appropriate for him to consider the application under s41(5); he should go to s41(6). Mr Thompson referred to the evidence as to sales and promotion and went on:

"However, I think that for sales and advertising figures to contribute to the trade mark's capacity to distinguish the goods of the applicant, it should be clear from the evidence that the sign in question is actually being used as a trade mark. I consider that the evidence before me shows that the trade mark consists wholly of a sign which is being used to indicate, in the language of Note (a) to subsection 41(6), the `kind' of the goods. As I have mentioned above, the trade mark is used interchangeably with the descriptions RUBY RED GRAPEFRUIT, CRANBERRY APPLE, CRANBERRY BLACKCURRANT or PINK GRAPEFUIT [sic] within oblique panels on the bottle labels over which the applicant's OCEAN SPRAY logo is partially imposed over each panel containing the generic description. To my mind, the applicant's action of interchanging a trade mark which lacks inherent capacity to distinguish with other terms which similarly lack inherent capacity to distinguish effectively decreases the prospects that it could gain any capacity to distinguish. Further, the association of the words CRANBERRY CLASSIC with the other descriptions of `kind' does, I consider, ensure that it will only be seen as a description of `kind' by both the public and other traders. If anything, the degree of sales and advertising that I have referred to above only serve to perpetuate the lack of any gain in the trade mark's capacity to distinguish since it reinforces the fact that the trade mark is being used in such a way that it will only be taken to describe the contents of the bottle to which it is affixed.

These considerations are strengthened by the fact that the trade mark is within a panel on the bottle partially superimposed, as are the descriptions on the other bottles, by the applicant's OCEAN SPRAY trade mark. I have not been able to find one example of the trade mark shown in use, on its own and independent of the trade mark OCEAN SPRAY, in the evidence. The trade mark thus appears to fall within the category of trade marks referred to as `limping trade marks' by Jacob J in Philips Electronics nv v Remington Consumer Products (1997) 40 IPR 279 (at 301) ...

I might also mention that the appearance or presentation of the trade mark, that it describes only the kind of juice in the bottle, is reinforced by its juxtaposition with the trade mark OCEAN SPRAY which is not only inherently distinctive but is also distinctive through use."

15 Mr Thompson concluded that Ocean Spray had not established that, because of the extent to which it had used the trade mark before filing the application, the mark distinguishes the designated goods as being its goods. "Accordingly", he said, "the trade mark is taken not to be capable of distinguishing the designated goods from the goods of other persons". Mr Thompson therefore decided to "refuse to register application 753694, subject to any appeal from my decision".

The appeal to this Court

16 It is well-settled, and common ground between the parties, that an appeal to this Court under s35(b) of the Trade Marks Act is a hearing de novo in which the Court must decide the matter as upon an original application: see Blount at 506, Companhia Souza Cruz Industria E Comercio v Rothmans of Pall Mall (Australia) Ltd (1998) 41 IPR 497 at 500, Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020; (1999) 45 IPR 411. In the last-mentioned case, French J (with whom Tamberlin J agreed) said at 422 there is "no presumption in favour of the correctness of the Registrar's decision save that weight will be given to the Registrar's opinion as that of a skilled and experienced person. But the court on appeal from the Registrar must, in determining the question of acceptance of the application, apply to it the same legal criteria that the Registrar is required to adopt". I propose to adopt that approach.

17 Each of the parties expressly accepted the correctness of the analysis of s41 made by Branson J in Blount. Inconsistently, however, with that acceptance, Ms Julia Baird, counsel for Ocean Spray argued that, by virtue of s33(1) of the Act, the Registrar (and on appeal the Court) must accept an application unless it is satisfied the application has not been made in accordance with the Act or there are grounds for rejecting it; in other words, if the situation is left uncertain, the application must be accepted. That is undoubtedly the situation in relation to other grounds for rejection. However, as Branson J pointed out in Blount, s41 provides its own regime. At 505 her Honour said:

"The question whether or not a trade mark is to be taken for the purposes of s41(2) as capable or not capable of distinguishing the designated goods or services from the goods or services of other persons is governed entirely by s41(3)-(6). The effect of such subsections is that a trade mark is not to be taken as capable of distinguishing the goods or services of an applicant from the goods or services of other persons unless the registrar is satisfied of certain matters or the applicant establishes a certain matter, in the sense discussed above."

18 Consistently with the analysis of Branson J, the first matter falling for my consideration is the issue posed by s41(2) of the Trade Marks Act: whether the mark CRANBERRY CLASSIC "is not capable of distinguishing the applicant's goods ... from the goods ... of other persons." In deciding that matter, I am required by s41(3) to take into account "the extent to which the trade mark is inherently adapted to distinguish" the applicant's goods from those of other persons. Only if I am unable to decide the matter of capability of distinguishing the applicant's goods will it be relevant for me to consider under s41(5) the use, or intended use, of the trade mark by the applicant.

Capability of distinguishing goods: legal concepts

19 Capability to distinguish the goods or services of one trader from those of others is central to the concept of a trade mark. Section 17 of the Trade Marks Act defines a trade mark in this way:

"A trade mark is 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."

It is rational, therefore, to ordain that an application is to be rejected if the mark is not capable of distinguishing the applicant's goods or services from those of others.

20 But what does it mean to say a mark is "not capable of distinguishing the applicant's goods or services"? These words did not appear in the predecessor of the current Act, the Trade Marks Act 1955; although s25(1) of that Act made registrable in Part B of the Register a mark that "is not distinctive but is capable of becoming distinctive of goods or services". I see little difference between the concepts of being distinctive and distinguishing; a mark that is distinctive of a particular person's goods or services will serve to distinguish those goods or services from those of others. It is true that the old s25(1) refers to the mark "becoming distinctive", while s41(2) of the present Act involves the concept of present capability. However, the essence of capability is fitness for a future role.

21 Section 26(2) of the 1955 Act provided that, in determining whether a mark is distinctive of goods or services, regard may be had to the extent to which it is inherently adapted to distinguish the goods. That provision is similar to the requirement of s41(3) of the present Act that, in considering whether a trade mark is capable of distinguishing the goods or services for which it is sought to be registered, account must be taken of the extent to which it is inherently adapted to distinguish those goods or services.

22 In Clark Equipment at 514 Kitto J explained the concept of inherent adaptability. He said the question whether a mark is inherently adapted to distinguish must:

"be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it."

23 This test was cited with approval by Gibbs J in Burger King Corporation v Registrar of Trade Marks [1973] HCA 15; (1973) 128 CLR 417 at 425. In F H Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited [1964] HCA 38; (1965) 112 CLR 537, the Full High Court was concerned with an application for registration of the word "Barrier" in relation to skin protection creams. Kitto J (with whom Barwick CJ and Windeyer J agreed) said at 555:

"... it would be extremely difficult for a word disqualified under par. (d) as descriptive to qualify under par. (e) as distinctive. It is not only difficult but surely impossible where the descriptiveness of the word refers to the distinguishing characteristic of a whole class of goods of which the goods of the proprietor are but examples. That this is the case with Barrier as applied to skin protective creams is put beyond doubt by the evidence in this case. But for the evidence, it might have been said that the word, though inherently suited to be used adjectivally for the purpose of referring to the distinguishing characteristic of skin protective creams generally, is not one which would spring instantly to the mind of a person who wanted a word for the purpose but had never known Barrier to be so employed. This might have been said with the general principle in mind that the question to be asked in order to test whether a word is adapted to distinguish one trader's goods from the goods of all others is whether the word is one which other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use upon or in connexion with their goods."

24 In British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281, Jacob J of the United Kingdom High Court of Justice considered the meaning of the words "capable of distinguishing goods or services", used in the definition of "trade mark" in the United Kingdom Act. He said the phrase "capable of distinguishing" means "whether the mark can in fact do the job of distinguishing". As an example of a mark that could not do that job, he cited the word "Soap". At 302 his Lordship said:

"There is an unspoken and illogical assumption that `use equals distinctiveness'. The illogicality can be seen from an example: no matter how much use a manufacturer made of the word `Soap' as a purported trade mark for soap the word would not be distinctive of his goods. He could use fancy lettering as much as he liked, whatever he did would not turn the word into a trade mark. Again, a manufacturer may coin a new word for a new product and be able to show massive use by him and him alone of that word for the product. Nonetheless the word is apt to be the name of the product, not a trade mark."

In that case Jacob J held that the word "Treat" was not distinctive of the plaintiff's goods; accordingly it fell foul of s3(1)(b) of the UK Act, which forbade registration of "trade marks which are devoid of a distinctive character". In other words, although the word "Treat" might be a "trade mark" (that is, a mark capable of distinguishing the plaintiff's goods), it had not yet become distinctive. At 306 Jacob J said:

"... the question of factual distinctive character is one of degree. The proviso really means `has the mark acquired a sufficiently distinctive character that the mark has really become a trade mark.' In the case of common or apt descriptive or laudatory words compelling evidence is needed to establish this. And in particular mere evidence of extensive use is unlikely to be enough on its own. Of course the power of advertising may be able to turn almost anything (save a pure description) into a trade mark, but it must be shown in a case of this sort that the mark has really become accepted by a substantial majority of persons as a trade mark - is or is almost a household word." [Original emphasis]

Is the subject mark capable of distinguishing Ocean Spray's goods?

25 In the present case, for the purposes of s41(2) of the Australian Act, I am concerned only with the first of the two matters considered by Jacob J; under s41(2) I am not required to consider whether the mark CRANBERRY CLASSIC has acquired a distinctive character, but only whether it is capable of distinguishing Ocean Spray's goods. I agree with Jacob J that "the power of advertising may be able to turn almost anything (save a pure description) into a trade mark". It follows, as it seems to me, that any mark other than "a pure description" may be regarded as capable of distinguishing a trader's goods, regardless of whether or not it does so at any particular time. This approach would deny registration under s41(2) to the word "Soap", because that is merely an ordinary English description of a product.

26 I do not think there is any inconsistency between this approach and the test enunciated by Kitto J. It will be recalled that, in Clark Equipment, his Honour spoke of the likelihood that other traders would wish to use the word in connection with their goods "in the exercise ... of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess". In F H Faulding he put the test as "whether the word is one which other traders are likely, in the ordinary course of their businesses, and without any improper motive, to desire to use upon or in connexion with their goods". In other words, to take Jacob J's example, all soap manufacturers may be expected to wish to describe their product as "soap"; so that word cannot be regarded as inherently adapted to distinguishing the products of one of them.

27 On behalf of Ocean Spray, Ms Baird points out that the mark CRANBERRY CLASSIC comprises two words, each of which separately has a meaning in ordinary English usage. However, she says, the mark must be considered as a whole, in determining whether it is inherently adapted to distinguish Ocean Spray's goods; it does not follow from the fact that word components of a trade mark each have established meanings that a trade mark comprising those components will lack inherent adaptability to distinguish. Ms Baird goes on:

"The Mark is alliterative, a coined combination of words. It is not established as a phrase or particular combination of words in common use. The Mark neatly inverts the usual order of English grammar - an adjective followed by a noun; rather the Mark comprises a noun succeeded by a word which on the dictionary meanings may be either another noun or an adjective. By reason of the alliteration of the initial letters of each word component of the Mark and by the inversion of grammatical order, the Mark gains an identity and a degree of inherent adaptability to distinguish within the meaning of ss41(3), notwithstanding that it is comprised of ordinary words."

28 Counsel for the Registrar, Mr Richard Cobden, submits that inherent adaptability "requires that one can say that it is such a name as would never occur to another trader to use in respect of that trader's similar goods". Mr Cobden cites no authority for that proposition which seems to me to go too far; if it were correct, there would be little need for a system of trade mark registration. Whether another trader might choose to use such a name - for example, because it was catchy and memorable - is a different question from whether it might fairly be required in order to describe the goods.

29 Mr Cobden says, and I agree, that nothing turns on the inversion of the words; if they are indeed inverted. He contends that the mark consists of two words, one being a direct description of the contents of the product and the other a word "frequently used, in particular in the area of food or drink, to describe the kind or quality of goods". In that connection he refers to Note 1 to subs (6) of s41 of the Act:

"Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

(b) the time of production of goods or of the rendering of services."

30 Although contained in the statute when enacted, the Notes to the Trade Marks Act do not prescribe rules of law. The Reader's Guide at the commencement of the Act explains the function of Notes in this way:

"Notes are to be found throughout the text. They are designed to help you find your way through the Act. They may tell you that certain words or terms are defined and where to find the definition; they may alert you to other provisions in this Act and in other legislation that are relevant to the text you are reading; or they may draw your attention to information that may help you to understand the contents or legal consequences of certain provisions or how to comply with them."

Notwithstanding that the Note referred to by Mr Cobden does not have legislative force, I accept it fairly reflects the trend of relevant judicial authority.

31 But is it accurate to say that the word "classic" describes the kind or quality of the cranberry juice being offered for sale? Mr Thompson thought the word "classic" was intended to indicate that the contents of the bottle were standard cranberry juice. This seems to me unlikely. If ordinariness was intended, no adjective would be necessary. Unlike the situation in respect of all the other products in the range, only one word was needed to identify the fruit used to produce the juice out of which this drink was made. That being so, I think Ocean Spray took the opportunity to make the name of the drink more memorable, and the product seem more attractive, by the addition of an alliterative adjective that conveyed the notion of excellence.

32 It is apparent from the passage in his reasons quoted in para 12 above that Mr Thompson's consideration of the issue of inherent capability of distinguishing the applicant's goods was influenced by the applicant's use of the name to date; that is, that Ocean Spray has used the words CRANBERRY CLASSIC in the same way as it has used the words CRANBERRY APPLE etc. However, in considering the issue posed by s41(2) of the Act, past and present use is irrelevant. The question whether the mark is not capable of distinguishing the applicant's goods or services from those of others depends on its inherent characteristics, not its manner of use. If the application for registration were successful, Ocean Spray might choose to use the mark in a manner different from its use to date; perhaps in a different position on the label, perhaps even without the use of the "Ocean Spray" trade mark.

33 I return to what I regard as the proper tests. Can it be said that "Cranberry Classic" are words that other cranberry drink manufacturers might wish to use in the future "for the sake of the signification which they ordinarily possess"? Can it be said that "Cranberry Classic" is a "pure description" of the applicant's goods? I have concluded these questions must both be answered in the affirmative. If I am right in thinking that the word "classic" is intended only to convey the notion of excellence, the words "cranberry classic" mean no more than "quality cranberry". Other cranberry fruit drink traders might well wish to use the laudatory word "classic" in conjunction with identification of the juice used in their product. Put another way, the words describe the nature of the juice, with a commonplace laudation.

34 In reaching the above conclusion, I have not overlooked two matters relied on by Ms Baird. First, she says, a mark need not be "absolutely unsuggestive of qualities" of the goods for which registration is sought, provided it does not amount to a normal description. I accept that statement. It illustrates that a question of degree is involved. In the present case, I think the mark goes well beyond being absolutely unsuggestive of the qualities of the goods. It employs an ordinary English adjective to make a claim of excellence.

35 The second matter mentioned by Ms Baird is that Ocean Spray adduced evidence of other registered marks that contain, or consist wholly of, the word "classic". That evidence should be disregarded, for the reasons expressed by Jacob J in British Sugar at 305:

"Both sides invited me to have regard to the state of the register. Some traders have registered marks consisting of or incorporating the word `Treat'. I do not think this assists the factual inquiry one way or the other, save perhaps to confirm that this is the sort of word in which traders would like a monopoly. In particular the state of the register does not tell you what is actually happening out in the market and in any event one has no idea what the circumstances were which led the registrar to put the marks concerned on the register. It has long been held under the old Act that comparison with other marks on the register is in principle irrelevant when considering a particular mark tendered for registration, see e.g. MADAME Trade Mark [1966] R.P.C. 541 and the same must be true under the 1994 Act. I disregard the state of the register evidence."

I add only that, although consistency in public administration is desirable, a public officer is not justified in persisting with error. Marks may, in the past, have been wrongly registered. It would be an unwarranted distraction from the task at hand to investigate, in a particular case, whether they were or not.

36 I resolve the first issue arising for determination by finding that the mark CRANBERRY CLASSIC is not capable of distinguishing Ocean Spray's goods from those of other traders. That finding renders s41(5) of the Act inapplicable but requires me to consider the issue posed by s41(6).

Whether pre-application use serves to distinguish Ocean Spray's goods

37 Under the 1955 Act, no amount of use could render a mark capable of distinguishing an applicant's goods. The position is illustrated by Kitto J's decision in Clark Equipment to uphold the Registrar's decision to refuse registration of the word MICHIGAN, a geographical name, notwithstanding that the mark had been used in Australia for 25 years, to distinguish the applicant's goods from those of other traders. See also a decision of a Full Court of this Court, Oxford University Press v Registrar of Trade Marks (1990) 17 IPR 509. Although each member of the Court there accepted that the word "Oxford" was distinctive in point of fact of the appellant's publications, each member held that an ordinary geographical name was incapable of being regarded as having an inherent adaptability to distinguish the appellant's goods.

38 According to the Second Reading Speech for the Bill that became the Trade Marks Act 1995, the "main thrust" of that legislation was to implement the Government's response to a 1992 Working Party report called "Recommended Changes to the Australian Trade Marks Legislation". It seems the Government accepted all the recommendation upon which the Working Party was unanimous: see Senate Debates, 30 March 1995 at 2589-2590. The unanimous recommendations included the following:

"4B Inherent distinctiveness, or acquired distinctiveness or a combination of both, should establish that a mark is capable of distinguishing the specified goods or services, and justify registration."

The Working Party explained:

"...it is presently possible to establish that a mark is distinctive in fact and yet it will be held in law to be not registrable, as there is a requirement that a mark possess some degree, however small, of inherent adaptedness to distinguish. Marks falling into this category are typically geographical names and laudatory or descriptive words, and therefore likely to be used by other traders in the legitimate description of their goods or services.

Once a particular trader can show, for example, that a word is distinctive in fact of his products, then it should not legitimately be used as a trade mark by a competitor. A competitor should, however, be entitled to make bona fide use of the word in its descriptive sense."

39 Ms Baird argues the evidence establishes that the use made by Ocean Spray of the mark CRANBERRY CLASSIC brings the case within s41(6) of the Act. She says that, prior to the filing of the application for registration, it was used as a product mark, in association with the applicant's house mark, "Ocean Spray". She says, rightly I think, that the use of one trade mark on the packaging of a product does not exclude the possibility of another mark also being used as a trade mark. Ms Baird draws attention to the volume and value of sales of the product prior to the application for registration and submits the Court should find CRANBERRY CLASSIC does distinguish the product as that of Ocean Spray.

40 Like Mr Thompson I am unable to find that the words CRANBERRY CLASSIC have hitherto been used as a trade mark. In para 19 above I quoted the definition of "trade mark" set out in s17 of the Act: relevantly "a sign used ... to distinguish goods ... provided in the course of trade by a person from goods ... provided by any other person". The situation is similar to that which pertained under the 1955 Act; as to which see the judgment of Burchett J in Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 21 IPR 1 at 19. His Honour there set out an assortment of judicial descriptions of the function of a trade mark. Their common thread is that the mark must be intended to proclaim a connection with a particular trader.

41 In the present case, the evidence does not establish that the words CRANBERRY CLASSIC had, by January 1998, acquired a discernible connection with Ocean Spray. No witness gave evidence that the words CRANBERRY CLASSIC signified to him or her an association between the product and Ocean Spray. In January 1998 the product had been on the Australian market for only two and a half years. Ocean Spray had spent a considerable amount of money on the promotion of its range of drinks, including cranberry classic, but the range had been promoted under the name "Ocean Spray". Given that fact, and the invariable presence on the label of the "Ocean Spray" trade mark, it seems to me likely that any association, in the public mind, between this product and the applicant company would have been derived from the use of the words "Ocean Spray" in advertising and on the labels of the products, not from the use of the words CRANBERRY CLASSIC. This impression is strengthened by the circumstance that the words CRANBERRY CLASSIC are displayed on the labels of that product in a manner similar to the words, admittedly purely descriptive, that identify the other drinks in the range.

42 In my opinion, the applicant has not succeeded in bringing its case within s41(6) of the Act.

Disposition

43 During the course of argument, I was asked to defer making orders until after counsel had an opportunity to consider my reasons. However, I understood that to apply only if I thought the applicant was entitled to succeed. Having regard to the conclusions I have reached, it is inevitable that the appeal be dismissed. I will make that order immediately, and thereby avoid the incurring of further expense. The applicant must pay the respondent's costs.

I certify that the preceding forty three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.

Associate:

Dated: 25 February 2000

Counsel for the Applicant:	J Baird
Solicitor for the Applicant:	W J Henly & Co
Counsel for the Respondent:	R Cobden
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	2 February 2000