Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Société des Produits Nestlé SA [2010] FCA 639 (22 June 2010)

Last Updated: 23 June 2010

FEDERAL COURT OF AUSTRALIA

Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Société des Produits Nestlé SA [2010] FCA 639

Citation:		Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Société des Produits Nestlé SA [2010] FCA 639
Appeal from:		Effem Foods v Nestlé SA [2008] ATMO 55
Parties:		MARS AUSTRALIA PTY LTD (formerly called EFFEM FOODS PTY LTD) (ACN 008 454 313) v SOCIÉTÉ DES PRODUITS NESTLÉ SA
File number:		NSD 1130 of 2008
Judge:		BENNETT J
Date of judgment:		22 June 2010
Catchwords:		TRADE MARKS – application to register a colour as a trade mark for pet food – application accepted after hearing at Trade Mark Office – delegate of Registrar rejected application following opposition – opposition now withdrawn – whether trade mark should proceed to registration – specification now limited to cat food – whether the application was accepted on the basis of evidence or representations that were false in material particulars – whether the colour was capable of distinguishing the applicant’s goods – whether inherently adapted to distinguish – whether, by the applicant’s use, the colour has come to distinguish goods – use of similar colours by other traders
Legislation:		Trade Marks Act 1995 (Cth) ss 41, 56, 62(b)
Cases cited:		Cadbury Schweppes Pty Ltd v Effem Foods Pty Ltd (2006) 69 IPR 584 applied Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 considered Effem Foods v Nestlé SA [2008] ATMO 55 reversed Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; (2002) 122 FCR 494 applied Société des Produits Nestlé (SA) v Aldi Stores (A Ltd Partnership) [2010] FCA 218 applied
Date of hearing:	15, 16, 17, 29, 30 March 2010, 10, 17 May 2010, 15, 16 June 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	29
Counsel for the Appellant:	Mr R J Webb SC, Mr D T Kell
Solicitor for the Appellant:	Baker & McKenzie
Counsel for the Respondent:	Mr S C G Burley SC, Ms P L Arcus
Solicitor for the Respondent:	Banki Haddock Fiora

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1130 of 2008

ON APPEAL FROM A DELEGATE OF THE REGISTRAR OF TRADE MARKS

BETWEEN:	MARS AUSTRALIA PTY LTD (formerly called EFFEM FOODS PTY LTD) (ACN 008 454 313) Applicant
AND:	SOCIÉTÉ DES PRODUITS NESTLÉ SA Respondent

JUDGE:	BENNETT J
DATE OF ORDER:	22 JUNE 2010
WHERE MADE:	SYDNEY

BY CONSENT, THE COURT ORDERS THAT:

1. The decision of the delegate of the Registrar of Trade Marks given on 30 June 2008 in respect of the Australian trade mark application no. 932937 (Application) be set aside.
2. The specification of goods for the Application be amended from “foodstuffs for domestic pets and additives for such foodstuffs” to “cat food and additives for cat food”.
3. The Application proceed to registration with the amended specification of goods as set out in Order 2.
4. No orders be made as to costs.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1130 of 2008

ON APPEAL FROM A DELEGATE OF THE REGISTRAR OF TRADE MARKS

BETWEEN:	MARS AUSTRALIA PTY LTD (formerly called EFFEM FOODS PTY LTD) (ACN 008 454 313) Applicant
AND:	SOCIÉTÉ DES PRODUITS NESTLÉ SA Respondent

JUDGE:	BENNETT J
DATE:	22 JUNE 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is an appeal pursuant to s 56 of the Trade Marks Act 1995 (Cth) (the Act) from a decision of a delegate of the Registrar of Trade Marks upon the hearing of an opposition by the respondent (Nestlé) to the applicant’s (Mars) application no. 932937 to register its trade mark (the application). Nestlé’s opposition succeeded (Effem Foods v Nestlé SA [2008] ATMO 55). The priority date of the trade mark application is 4 November 2002. The trade mark applied for is a colour, referred to in the evidence as “Whiskas Purple”. The endorsement on the accepted application reads:

The mark is the colour purple (CMYK: cyan 40%, magenta 100%) as shown in the representation to the application. Provisions of subsection 41(6) applied.

The representation referred to is a colour swatch included in the application. The following is an electronic copy but may not appear identical to the colour included in the original application due to variables in printing and other media:

2. The colour of the trade mark, according to the evidence, was created for the Mars group in Europe “from scratch”. The CMYK reference is to one system employed to describe colours with some specificity.
3. The specification of the goods in the application is:

Foodstuffs for domestic pets and additives for such foodstuffs.
(the original specification)

4. The application was examined at the Trade Marks Office and accepted for possible registration. It should be noted that, in the appeal, Mars is content to have the description of the goods amended. Originally that proposed amended specification was ‘foodstuffs for cats and kittens and additives for such foods’ (the original amendment). It is now proposed to amend the specification to ‘cat food and additives for cat food’.
5. The mark is used by Mars in relation to its range of Whiskas cat food products. It is used on all varieties of Whiskas cat food as the predominant colour of the packaging. It forms the background to all other material included on the packaging. Mars commenced using the Whiskas Purple colour in Australia in April 2000.
6. The principal issues in the appeal are:
   • whether the mark satisfies the requirements of s 41 of the Act (capacity to distinguish); and
   • whether the application was accepted by the Registrar on the basis of evidence or representations that were false in material particulars (s 62(b) of the Act).
7. I have been informed that the parties in this appeal have settled their dispute and have proposed agreed orders to the effect that the appeal be allowed, the decision of the delegate be set aside and the trade mark with the proposed amendment to the endorsement proceed to registration. Mars has produced to the Court a copy of a letter from the Deputy Registrar of Trade Marks and Designs which states that the Registrar has no objection to the decision of the delegate being set aside or to the proposed amended application proceeding to registration.

The decision of the Delegate

8. A delegate of the Registrar of Trade Marks (the Delegate) heard the opposition. The Delegate considered that Whiskas Purple was not at all inherently adapted to distinguish Mars’ goods. Turning to s 41(6) of the Act, the Delegate accepted that consumers would associate the Whiskas Purple colour with the Whiskas product but did not accept that the public recognised Whiskas Purple as a trade mark of Mars such that it would always distinguish Mars’s goods from those of other traders (at [22]-[23]). The Delegate considered the extent to which the public recognised Whiskas Purple, used in some unspecified degree in a range of ordinary contexts, as a trade mark of, or denoting, Mars (at [25]). The Delegate rejected Mars’ claim that any relevant usage of Whiskas Purple would suggest a trade source of Mars (at [25]). Further, the Delegate was of the view that it would ‘not remotely be tenable’ to say that the proposed trade mark distinguished goods upon which it had never been used, such as other pet food, particularly dog food (at [29]). The Delegate also noted the usage of purple by other traders to indicate varieties of cat food. Accepting, as said by Lindgren J in Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; (2002) 122 FCR 494 at [95], that the likelihood of innocent use by other traders does not prevent a mark from being inherently adapted to distinguish, the Delegate commented that his Honour did not say that all kinds of innocent use must be disregarded (at [34]-[35]). Having regard to other usages that had been made of ‘somewhat similar colours’ by other traders for significant parts of their labelling of pet food, the Delegate concluded that this militates strongly against the assertion that the proposed colour did in fact distinguish the Mars products to the exclusion of others. The Delegate did, pointedly, observe that he did not have before him any convincing survey material about public perceptions. (at [40])
9. A ground of opposition under s 62(b) was also raised. The Delegate found that the registration had been accepted for registration on the basis of evidence or representations that were false in material particulars. It was not said by Nestlé that the original false statements were made with the intention of deceiving but that, inadvertently, they had that effect. Nestlé also contended that submissions by the attorney to the examiner of trade marks were misleading. This related, broadly, to assertions as to the actual or desired use by others in the pet food market to use the colour purple.
10. The Delegate accepted that there was no evidence that the hearing officer, in accepting the application, accepted any non-declaratory material as being persuasive evidence of fact, or gave significant weight to the assertions (at [59]). However, the Delegate discussed the way in which Mars had, through its declarant Ms Steele, an officer of Mars, stated a factual position that, if not strictly untrue (if a very narrow definition of the colour were taken) raised the prospect of ‘the deliberately artful choice of words’ (at [63]). Ms Steele had said that ‘at the time of adoption of the Colour Purple trade mark by [Mars] neither this colour nor any other shade of purple was used by any other cat food manufacturer in Australia’ and that ‘no other pet food manufacturer currently used the colour purple as the dominant colour indicating its brand of pet food’. The Delegate said that Ms Steele ‘through inadvertence or through an inexplicably poor choice of description, declared to facts that are not true, and that were in all probability material to the decision to accept the application’ (at [63]). The Delegate concluded that ‘the acceptance can only have been on the strength of the picture painted, no doubt innocently, but none the less inaccurately’ by Mars and found this ground of opposition established (at [64]).
11. The remaining grounds of opposition were either dismissed or not determined. Although the Court will have due regard to the reasoning of the Delegate, its task is to decide the matter afresh on the merits as upon an original application and not merely to consider whether the decision of the Delegate can be supported.

The withdrawal of the opposition

12. Mars relies on the decision of Nicholas J in Société des Produits Nestlé (SA) v Aldi Stores (A Ltd Partnership) [2010] FCA 218 made in similar circumstances of proposed consent orders, that an appeal from a decision of the Registrar be allowed and the trade mark proceed to registration. His Honour there pointed out that:
    • As the application had been accepted for registration, it would have proceeded to registration but for the opposition, now withdrawn. It is the same position on the appeal (Cadbury Schweppes Pty Ltd v Effem Foods Pty Ltd (2006) 69 IPR 584 at [17] per Lindgren J).
    • Section 68(1) of the Act provides that the Registrar must register a trade mark that has been accepted for registration where there has been no opposition to the registration.
13. Justice Nicholas observed at [9] that ‘it is in no sense self-evident that the mark the subject of the appeal should not be registered. Nor is there any evidence before the court which would lead me to the conclusion that it should not be registered’.
14. In this case, unlike Nestlé v Aldi, there is substantial evidence that has been called by both Mars and Nestlé. There was also the success of the ground of opposition under s 62(b) of the Act. That is, the Delegate concluded that the registration had been accepted on the basis of representations that were false in material particulars.

The ground of opposition pursuant to s 62(b) of the Act

15. Section 62(b) of the Act provides:

The registration of a trade mark may be opposed on any of the following grounds:

...

(b) that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars.

16. Mars submits that s 62(b) is not enlivened for at least the following reasons:
    1. The delegate of the Registrar who accepted the trade mark (the first Hearing Officer) may be expected to have considered the whole of the evidence on the file. A proper consideration of that material would make it clear that the portion of Ms Steele’s declaration as relied upon by Nestlé could not have caused the acceptance of the application in the manner alleged.
    2. In any event, on a fair reading of Ms Steele’s declaration, the impugned paragraphs cannot properly be regarded as false.
17. Mars points out that the acceptance for registration by the first Hearing Officer followed an ex parte hearing in October 2005 in the face of an earlier objection to acceptance by an examiner of trade marks (the Examiner). At that hearing, Mars indicated that it was content for the specification of the goods to be narrowed as in the original amendment. The Hearing Officer, however, framed the specification of goods in the broader form of the original specification, which is the subject of the accepted application.
18. The Steele declaration before the first Hearing Officer stated that at the time of adoption of the Whiskas Purple trade mark by Mars, neither Whiskas Purple nor any other shade of purple was used by any other cat food manufacturer in Australia. Further, it stated that no other pet food manufacturer currently used the colour purple as the dominant colour indicating its brand of pet food. Mars points out that there was other material before the first Hearing Officer, not restricted to the Steele declaration. There was evidence that manufacturers in the cat food industry do typically colour the packaging of their products and that the colour purple was used on many petcare products, including cat food products as, for example, a varietal indicator but was not used as the dominant colour. The thrust of Mars’ submissions before the first Hearing Officer was that it used Whiskas Purple as a trade mark, rather than in the “lesser way” that colour, including purple, was used by other traders, such as to distinguish different flavours of pet food.
19. Also before the first Hearing Officer was the report from the Examiner who rejected the application. That report stated that ‘research demonstrates that other manufacture[r]s within the cat food industry do typically colour the packaging of their products and are using the colour purple on the packaging of their similar products’. That is, even if the Steele declaration represented that no other manufacturers used purple for pet food, that was not all of the evidence before the first Hearing Officer. The Examiner’s report and rejection of the application were before the first Hearing Officer, as were two other declarations, one of which referred to the use of the colour purple on pet care products sold in supermarkets. Upon considering all of this evidence and submissions, the first Hearing Officer accepted the application.
20. Section 62(b) requires a causal connection between the suggested false statement and the acceptance of the application. I accept Mars’ submission that it cannot be concluded that the examining Delegate accepted the application on the basis of the representations in the Steele declaration, even if they were false in a material particular.
21. It follows that the appeal in relation to the ground of opposition under s 62(b) should be allowed.

The ground of opposition pursuant to s 41 of the Act

22. Section 41 of the Act provides:

Trade mark not distinguishing applicant’s goods or services

(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.

Note 1: For applicant and predecessor in title see section 6.
Note 2: If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

(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.

Note: For goods of a person and services of a person see section 6.

(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.

Note 1: For goods of a person and services of a person see section 6.
Note 2: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

(6) If the Registrar finds 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, 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.

Note 1: 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.
Note 2: Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

23. Mars presses the registrability of the trade mark. Mars submits that the trade mark is capable of distinguishing Mars’ goods from those of other traders because it is, or is to some extent, inherently adapted to distinguish within the meaning of s 41(3) and (5) of the Act. In the alternative and in the event that the mark is not inherently adapted so that s 41(6) applies, Mars submits that the evidence establishes that the trade mark did in fact distinguish Mars’ goods as at the filing date and is to be taken to be capable of distinguishing those goods.
24. As the opposition to the registration of the trade mark has been withdrawn and the integrity of the acceptance of the mark resolved, it may be unnecessary to consider the questions arising under s 41 further. However, because of the evidence as to variations that may occur in printing of the colour “Whiskas Purple” and the use of colours that are similar to Whiskas Purple on other pet food products, including cat food products, it is appropriate to make some observations.
25. Mars has adduced substantial evidence of its use of Whiskas Purple in Australia, from about April 2000. That colour and its association with Whiskas was extensively promoted and advertised before and after the priority date and the colour has been used by Mars in Australia across the range of Whiskas cat food products. It was a colour carefully chosen and the precise colour specifically developed in order to create a stronger brand identity for Whiskas. The Whiskas Purple colour is the predominant colour used on the product packaging for all varieties of Whiskas cat food. It was intended, and has been used, to create a stronger shelf-blocking effect when displayed, inter alia, in supermarkets.
26. Mars recognises and accepts that other traders have, before and after the priority date, used a form of purple on pet food packaging. While Mars does not accept that such use includes the use of colours that are very similar to Whiskas Purple, in my view there is evidence of such use. However, Mars emphasises that the use of a purple colour by other traders has not been shown to be trade mark use. It points out that, on the evidence, most use involves the use of purple on specific varieties within a product range to distinguish such varieties. It submits that other traders would not be likely without improper motive to desire to use the mark, or some mark nearly resembling it, upon or in connection with their own goods in any manner that would infringe the Mars mark (Kenman Kandy at [87]–[89] per Lindgren J; Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 at 514 per Kitto J). Mars says that registration of Whiskas Purple does not destroy its primary use as a colour for trivial, descriptive or other non - trade mark use. It will not prevent non - trade mark use of the colour purple or a pink-purple by others, for example to indicate a particular variety in a product range.
27. Mars points to the extensive evidence of the marketing of Whiskas Purple and of its use, which have served to establish the trade mark significance of the Whiskas Purple colour in the minds of consumers and the association between that colour and the Whiskas range of products. Further, there had been no previous use by Mars of such a colour. Mars had previously used blue on the packaging of Whiskas products. It adopted an entirely new colour as a trade mark and promoted it heavily from the outset with, as the evidence establishes, the clear intention of giving the colour a trade mark significance. The Act accepts (s 17 and s 6 of the Act) and the evidence establishes that a colour can function as a trade mark. Mars adduced expert evidence which supports its contention that Whiskas Purple functioned in this way at the priority date. As at the date of a survey conducted in May 2009, the evidence supports the submission that Whiskas Purple did function as a trade mark, a badge of origin by which consumers identified Mars’ goods in contrast to the goods of other traders. Mars relies on its use of Whiskas Purple as establishing that the colour in fact distinguished its goods so that it must have been capable of distinguishing them for the purposes of s 41(2) of the Act within the meaning of s 41(5) and, alternatively s 41(6). Mars submits that the Whiskas Purple colour itself has, by the use which has occurred, come to distinguish Mars’ goods.
28. The evidence supports Mars’ submission that, having regard to Mars’ use of the mark, Whiskas Purple was at the priority date capable of distinguishing Mars’ goods within the amended specification now proposed.
29. Nestlé no longer opposes the registration of the Mars’ trade mark. The Registrar does not oppose registration. There is no good reason to refuse to allow the accepted trade mark, with the proposed amendment to the specification, to proceed to registration. It follows that the decision of the Delegate should be set aside and the application proceed to registration with the amended specification of goods.
    

I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

Associate:

Dated: 22 June 2010