Kimberly-Clark Worldwide, Inc v Goulimis

Federal Court of Australia|2008-09-16|Before: Jagot J

REASONS FOR JUDGMENT 1 This is an appeal under s 56 of the Trade Marks Act 1995 (Cth) (the Act). 2 Alexandra Goulimis, the respondent to this appeal but the applicant for the purposes of the Act, applied for registration of the trade mark "HUGGIE" MUMMY in respect of services described as "Direct selling of baby-toddler's toys, videos, CD's, books, games and accessories". Kimberly-Clark Worldwide, Inc (the opponent), the registered owner of various trade marks involving the word HUGGIES with earlier priority dates, opposed the application. On 17 January 2008 a delegate of the Registrar of Trade Marks decided to register the respondent's trade mark (s 55 of the Act). Section 56 permits the opponent to appeal against the Registrar's decision. 3 The respondent has not entered any appearance in the proceedings and did not appear at the hearing. The opponent read affidavits demonstrating service of the notice of appeal and affidavits on which it proposed to rely, as well as notice to the respondent of the hearing date. The Court's file discloses that the respondent filed a document on 11 August 2008. This document states that the respondent cannot attend the hearing for medical reasons and asks that the written submissions and documents attached be taken into account. Amongst other things, the submissions contain evidence from the respondent, being a person who has not taken an oath or affirmation (s 21 of the Evidence Act 1995 (Cth)). Moreover, the respondent's absence from the hearing meant that the opponent could not test this evidence. In these circumstances I ordered that the hearing should proceed without the respondent. I also decided that the document filed by the respondent should not be taken into account.

EVIDENCE AND FACTS 11 The respondent applied for registration of the trade mark "HUGGIE" MUMMY on 15 November 2005 (Trade Mark Application No 1085541). The priority date for the purposes of the Act is thus 15 November 2005. The following discussion relates to the facts and circumstances at that date except where the contrary is noted. 12 The specification in the application was amended on 24 February 2006 to "Direct selling of baby-toddler's toys, videos, CD's, books, games and accessories". The application is in Class 35, a service class (Advertising; business management; business administration; office functions). The opponent filed a notice of opposition on 14 June 2006. On 17 January 2008 a delegate of the Registrar decided the application may proceed to registration. The evidence before the Registrar did not include material on which the opponent relied in the appeal. This must be taken into account when applying to the present case the principle that "weight will be given to the registrar's opinion as that of a skilled and experienced person" (Jafferjee v Scarlett (1937) 57 CLR 115 at 126). 13 The opponent is the owner of the following trade marks, each with a priority date earlier than that of the respondent's application: Reg No & Priority Date Mark Class 307608 (27/05/77) HUGGIES Class 25 - Clothing, including disposable diapers, all for infants 463304 (13/04/87) HUGGIES Class 16 - Disposable diapers, bibs and baby wipes, all being predominantly of paper and/or cellulose 550615 (18/02/91) HUGGIES PULL-UPS Class 25 - Clothing for young children, inclusive of, but not limited to, disposable underpants used for training young children in the proper use of the toilet 616732 (22/11/93) HUGGIES SUPREME (stylised) Class 16 - Disposable diapers and training pants for infants, babies and toddlers 642211 (28/09/94) HUGGIES Class 3 - Impregnated wipes in this class 714181 (1/08/96) HUGGIES PULL-UPS DRY NITES Class 16 - Disposable, absorbent underpants and disposable training pants for infants and young children 776806 (29/10/98) HUGGIES LITTLE SWIMMERS Class 16 - Disposable swim wear for children Class 25 - Disposable swim wear for children 979515 (24/11/03) HUGGIES DRY COMFORT Class 16 - Disposable diapers, disposable diaper liners and disposable training pants 1005401 (7/06/04) HUGGIES Class 16 - Paper products in this class, including disposable paper products including disposable diapers, diaper liners, bibs and baby wipes, disposable training pants and absorbent underpants for babies, infants and young children, disposable swim wear for children, disposable changing pads for babies and infants, all being predominantly of paper and/or cellulose 1032741 (2/12/04) HUGGIES Class 3 - Baby shampoo, baby bath soaps and cleansers, baby lotions and powders; disposable wash mitts impregnated with skin cleansers, disposable washcloths impregnated with skin cleansers Class 5 - Diaper rash creams and ointments Class 16 - Disposable washcloths, disposable wash mitts, and disposable changing pads

14 The opponent has owned these marks since 2002. Before that the opponent's parent company owned the marks. Use of the trade mark HUGGIES started in Australia in 1987 in relation to disposable nappies. The product range has expanded to include varieties of absorbent underpants, toilet training pants, pyjamas and swimwear for babies and toddlers, as well as changing pads, baby wipes, wash cloths, bath washes, powders and lotions. The HUGGIES mark appears prominently on these products. 15 Since 1998 a number of the opponent's products have included a redemption scheme under which consumers can redeem barcodes from product packaging for children's toys, games, CD's, videos, and other items such as play tents, fun cars, musical mats and art desks. These items are manufactured for the opponent. The opponent distributes the items through its redemption program. Since 2002 these items distributed by the opponent also all bear the HUGGIES trade mark. In addition to this scheme the opponent, since 2000, has included special features as part of the packaging of its bulk nappy products. These features include cut-out colour mobiles, character and learning cards, and door plaques. 16 The opponent distributes its goods throughout Australia using many channels. Distribution channels include major supermarkets, pharmacies and chemists, variety and discount stores, convenience stores, service stations, baby speciality stores, and other specialty stores such as Toys R Us. Although the opponent does not directly sell its products over the internet, the opponent's website contains links to a number of on-line retail outlets permitting purchase over the internet. 17 The opponent advertises its goods extensively across Australia through the print media, television and radio, posters in places frequented by those responsible for caring for babies and toddlers (such as shopping centres, swimming pools, and baby change rooms), electronic media, sponsorship and support of maternity hospitals, and distribution of "bounty bags" containing HUGGIES products to new mothers and mothers to be through pharmacies and hospitals. It also launched the HUGGIES Baby Club and HUGGIES Mother-to-be Club in 2002 (with the HUGGIES Book Club following after the priority date in 2007). 18 According to market research the HUGGIES mark or brand has an extraordinarily high spontaneous brand awareness and market penetration amongst mothers (that is, the percentage of mothers who can recall the brand without prompting and who have bought products from the brand). 19 Paul Blanket holds a Bachelor of Commerce (Marketing) and Master of Commerce (Marketing). He lectures in advertising and marketing at the Macquarie Graduate School of Management and is the Director of First Impressions Pty Ltd, a company that provides marketing, advertising and promotional consulting services. Mr Blanket concluded that: - (i) the opponent had significantly increased its product range and distribution channels over the years to the point where HUGGIES products were both ubiquitous and pre-eminent in the baby and toddler market by November 2005, (ii) HUGGIES products are fast moving consumer goods, which are typically low value and high turnover, meeting daily convenience needs, and (iii) the tendency for consumers to have imperfect recollection and alter a trade mark to a singular or plural form is accentuated for fast moving consumer goods, particularly in the baby-toddler market. 20 Mr Blanket also said that the term "direct selling" used to mean door-to-door selling but its meaning has become uncertain over time. In particular, website links permitting sales at a business-consumer and business-business level, the operations of direct marketing organisations, and a dramatic change in marketing given electronic media over the last 10 years, have broadened the concept of direct selling. 21 In Mr Blanket's opinion, parents of babies and toddlers would be likely to associate "direct selling of baby-toddler's toys, videos, CD's, books, games and accessories" under the "HUGGIE" MUMMY trade mark with the goods and services provided by the opponent. 22 It will be apparent from this summary of Mr Blanket's evidence that part related to matters relating to ordinary human nature, part to the meaning of a term (direct selling) that may not be a term of art, and part to the ultimate issue in the appeal. According to Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2006) 228 ALR 719; [2006] FCA 363 opinion evidence about matters within ordinary human experience is inadmissible. Opinion evidence about the meaning of general terms is also usually inadmissible. Evidence about the ultimate issue is admissible under s 80 of the Evidence Act. I have taken into account these considerations when assessing the weight to be given to Mr Blanket's evidence. 23 Ms Sonia Stackhouse is the Business Development Manager of Kimberly-Clark Australia (a wholly owned subsidiary of the opponent). Ms Stackhouse is responsible for identifying and developing new market opportunities. Since 2004 Ms Stackhouse has monitored the Australian on-line market for baby and toddler related goods and services. Ms Stackhouse is not aware of any use of the opposed trade mark by any person or any use by a third party of any trade mark HUGGIE, HUGGIES or HUGGY relating to baby and toddler related goods and services. 24 Ms Roslyn Russell is the senior trade marks and packaging co-ordinator of Kimberly-Clark Australia. In this role she is familiar with and has experience of the Australian market for baby and toddler related goods. Ms Russell is also not aware of any use of the opposed trade mark by any person or any use by a third party of any trade mark HUGGIE, HUGGIES or HUGGY relating to baby and toddler related goods and services. 25 Mr Simon Williams is a solicitor. He searched the Australian Trade Marks Register. Other than the opponent's HUGGIES trade marks and the opponent's application Mr Williams found two trade marks in class 28 (toys and games), being composite word and device marks (Huggy Sport and Huggy Buggy). 26 Mr Williams also served a subpoena on the respondent requiring production of documents relating to any use of the "HUGGIE" MUMMY trade mark in Australia or intention to use or authorise the use of the mark. The respondent produced one document, being a certificate of registration of business name dated 14 November 2005 for the business name "HUGGIE" MUMMY with the trading status identified on the certificate as trading. Mr Williams wrote to the respondent on 19 August 2008 advising that the opponent would rely on the fact that no documents had been produced showing any use of the trade mark as evidence of a lack of intention to use the trade mark. 27 Mr Michael Rumore is a private investigator. On or about 8 December 2005 he searched the on-line white pages for the name "Goulimis" and found one listing at Belmore (being the same address as recorded on the respondent's trade mark application). He called the number and a female answered who identified herself as Alexandra Goulimis. They had a conversation about the "HUGGIE" MUMMY trade mark as follows: Ms Goulimis: "HUGGIE" MUMMY is my trade mark but I've only registered it as a business idea at this stage. I don't have any cards printed and I haven't started any business under that name yet. Mr Rumore: Is it going to be a shop? Ms Goulimis: Well, yes it could be a shop but I'm more interested in other services for children like counselling. Mr Rumore: How are your plans going? Ms Goulimis: I'm still a long way off from doing anything.

Deceptive similarity 28 The respondent's trade mark application is in respect of services and thus s 44(2) of the Act is relevant. Accordingly, the first question is whether the respondent's services and opponent's goods satisfy the test of close relationship in s 44(2)(a)(i). French J described this question as "logically antecedent to the determination whether the trade mark in respect of the services is deceptively similar to that in respect of the goods" (Woolworths (1999) 93 FCR 365; [1999] FCAFC 1020 at [39]). 29 The Registrar's delegate found against the opponent on this issue on the basis that the respondent's services and opponent's goods have little in common but for the ultimate consumer (parents of babies and toddlers). I must decide the issue of the closeness (or otherwise) of the relationship between the respondent's services and the opponent's goods on the basis of the more extensive evidence before me. In so doing I also need to consider the statutory rights of use rather than any particular use. 30 The respondent's mark "HUGGIE" MUMMY is for direct selling of baby-toddler toys, videos, CD's, books, games and accessories. The relevant services thus constitute the direct selling of the nominated goods. The ordinary meaning of direct selling would fairly and reasonably cover any mode of retailing direct from the respondent to the end consumer without an intermediary being responsible for the sale. If direct selling is a technical term then this meaning is consistent with Mr Blanket's conclusions. In other words, I do not construe the activity of direct selling as limited to door-to-door sales. That is one method of direct selling but there are others (many of which Mr Blanket identified) including, for example, internet sales (whether from a website maintained by the respondent or via links from other websites to the respondent's website), sales from market stalls, sales from a "HUGGIE" MUMMY branded shop, as well as sales to end consumers under arrangements with other retailers (for example, by lease or licence of part of the space or a counter within a shop or through factory outlet centres or, as the opponent submitted, by canvassing at places frequented by those responsible for caring for babies and toddlers). 31 The methods of sale within the scope of "direct selling" are more restrictive than the retail channels used by the opponent. Nevertheless, normal and fair use of the respondent's mark in accordance with the rights to use conferred by registration (in contrast to any particular use) involves substantial overlap with the opponent's trade channels, particularly in terms of the locations within which sales may occur and marketing of the products. For example: - (i) links to methods of purchase to the products of both the respondent and the opponent may appear on common websites (such as those used by the opponent to sell its goods, particularly those with a focus on babies and toddlers), and (ii) the products may appear for sale close to each other in stores and outlets (even if the selling arrangement is direct by the respondent from her own counter or area and through an intermediary by the opponent). 32 Further, and as the opponent submitted, there appears to have been no use of the respondent's trade mark to date, but it would be open to the respondent to offer and promote her services alongside and in the same publications and forums as the extensive distribution channels used by the opponent for its HUGGIES branded goods. 33 In Woolworths (1999) 93 FCR 365; [1999] FCAFC 1020 at [40] French J described the ultimate task under s 44 as involving "one practical judgment" depending on the nature and degree of resemblance and the closeness of the relationship between the services and goods in question. His Honour observed (also at [40]) that it "will not always be necessary to dissect that judgment into discrete and independent conclusions about the resemblance of marks and the relationship of goods and services". This observation invites consideration of the nature of the goods which the respondent will sell under the trade mark and the opponent's goods when assessing the nature of the relationship between the respondent's services and the opponent's goods. 34 A number of factors are relevant to this assessment. 35 First, I see no reason to attempt to limit the meaning of "accessories" in the application to accessories in some way related to the items preceding that word (that is, toys, videos, CD's, books, and games). The ordinary meaning of "baby-toddler accessories" is broad enough to encompass subsidiary or ancillary items of the same kind as those sold by the opponent including nappies, training pants, underpants, liners, bibs, wipes and cloths, swimwear, and personal care products. In fact, I consider that the reference to "accessories" in the specification would include the right for the respondent to engage in direct selling of the whole of the opponent's product range, in addition to baby-toddler toys, videos, CD's, books, and games. 36 Secondly, some of the opponent's goods include HUGGIES branded toys and games as part of the packaging. 37 Thirdly, the opponent also distributes baby-toddler related toys, games, CD's and videos as part of its redemption scheme, all of which also bear the HUGGIES trade mark. 38 Fourthly, the consumers of the goods are identical, being parents of or carers for babies and toddlers. 39 Fifthly, the uses to which the goods will be put are the same (caring for, entertaining, and educating babies and toddlers). 40 In these circumstances I am satisfied that the respondent's services and the opponent's goods are closely related within the meaning of s 44(2)(a)(i). 41 The same considerations are relevant to the question of deceptive similarity. The Registrar's delegate described the "HUGGIE" component of the respondent's trade mark as adjectival leading to the conclusion that it would be artificial to consider the "HUGGIE" component alone with the opponent's trade marks. This conclusion was reinforced by the delegate's conclusion that the word MUMMY did not involve a description of the respondent's goods (in contrast to such descriptors as PULL-UPS, PULL-UPS DRY NITES and LITTLE SWIMMERS that form part of the opponent's marks). 42 I agree that the respondent's trade mark must be considered as a whole. Nevertheless, I also accept the opponent's submissions that the essential feature of the respondent's trade mark is "HUGGIE". "Huggie" is a made up word. The inverted commas around the word in the respondent's mark give it emphasis, as does the artificial "IE" ending. As Mr Blanket said, baby-toddler accessories of the kind sold by the opponent and within the scope of the respondent's trade mark are consumer goods sold on a low value high volume basis. These products are likely to be bought quickly, on a recurrent basis, without much thought (at least after the first occasion for purchase) and, in the case of sales of the opponent's goods, by reference to the essential brand identifier HUGGIES (whether appearing alone or as part of a composite mark). But for the plural form in the opponent's marks the essential feature of the respondent's mark "HUGGIE" MUMMY is the same. The singular form in the respondent's mark is a weak point of distinction when the nature of the services and goods in question is considered. 43 The opponent supported its submissions on this issue by market research showing the notoriety of the opponent's marks (each of which includes the word HUGGIES) in respect of baby-toddler personal care items. The relevance of reputation to deceptive similarity has been described as relating only to the assessment of the "nature of a consumer's imperfect recollection of a mark" but no more (Crazy Ron's Communications (2004) 209 ALR 1; [2004] FCAFC 196 at [90] citing CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42; [2000] FCA 1539 at [52]). The dominant reputation of the HUGGIES marks in the market for baby-toddler products (particularly personal care products) supports the conclusion that the opponent has made out the ground of deceptive similarity under s 44(2). 44 I am aware that there is no evidence of actual confusion. This is of limited weight because on the facts of this case there is no evidence of the respondent's use of the trade mark in question. 45 For the reasons above I am satisfied that the effect or impression left by the respondent's trade mark will involve a real likelihood that some people will wonder whether the respondent's direct selling of the nominated goods has, as its source, the opponent. The ground of opposition under s 44(2) is therefore upheld. 46 Section 60 involves deceptive similarity by reason of reputation. The evidence establishes that the opponent's trade mark HUGGIES has acquired a reputation in Australia. The opponent's trade marks (registered and unregistered) involve both the word HUGGIES alone and the word HUGGIES with other words. HUGGIES is the dominant brand in the market for baby-toddler personal care items in the form of disposable nappies, liners, and ancillary items (such as wipes, cloths, and lotions). I accept the opponent's submission that HUGGIES is a household name with a substantial degree of notoriety or familiarity in Australia; HUGGIES automatically brings to mind baby-toddler personal care items, particularly nappies. 47 I have found that the respondent's trade mark has as its essential feature the word "HUGGIE" and will operate in respect of the service of direct selling of, amongst other things, baby-toddler accessories. Further, that the whole of the opponent's product range would fall within the reference to baby-toddler accessories. I have also found that the opponent's products include HUGGIES branded toys and games as part of the packaging and rights to redeem barcodes for other HUGGIES branded toys and games, as well as CD's and videos. These circumstances satisfy me that the rights to use the respondent's trade mark would be likely to cause consumers in the relevant market to wonder whether the opponent is the source of the services. The ground under s 60 of the Act is also upheld. 48 These conclusions with respect to ss 44 and 60 of the Act mean that I also accept the opponent's objection based on s 42(b) (use of the trade mark would be contrary to law). I accept that use of the respondent's trade mark would be likely to mislead and deceive consumers in relation to the supply of the nominated goods; the circumstances described above mean that some consumers confronted by the "HUGGIE" MUMMY mark in the course of the respondent's authorised use will be likely to identify the opponent as the source of the goods or think that there is an affiliation between the opponent and the respondent's services. By reason of s 42 of the Fair Trading Act 1987 (NSW) and s 52 of the Trade Practices Act 1974 (Cth) this is sufficient to satisfy the requirements of s 42(b) of the Act (Health World (2008) 75 IPR 478; [2008] FCA 100 at [156]). 49 In its opposition based on s 42(b) the opponent relied also on ss 120(2) or (3) of the Act. These provisions relate to infringement, with s 120(2) dealing with services that are closely related to registered goods and s 120(3) dealing with services that are not closely related to registered goods. Given my findings above I am satisfied that the opponent's reliance on s 120(2) is made out.

Intention to use 50 The opponent submitted that the evidence of the respondent's intention to use the trade mark was limited to the application and the registration of the trade mark as a business name on the same day. Otherwise the respondent had not put forward any evidence before the Court or the Trade Marks Office. The subpoena required production of all documents relating to any use of the "HUGGIE" MUMMY trade mark in Australia or intention to use or authorise the use of the mark. The certificate of registration of a business name was the only document produced in response. On or about 8 December 2005 the respondent admitted to Mr Rumore that she had registered the "HUGGIE" MUMMY trade mark "only … as a business idea at this stage" and was "still a long way off from doing anything". This was consistent with the searches carried out by the opponent's employees showing no evidence of use of the "HUGGIE" MUMMY trade mark. The opponent said these circumstances demonstrated a prima facie case of the respondent's lack of the requisite intention to use the trade mark (that is, a real and definite intention even if not immediate or within a limited time and not a mere general intention of expanding a business at some future time). 51 I accept these submissions. The evidence leads to the inference that the respondent did not have any real and definite intention to use the "HUGGIE" MUMMY trade mark at the priority date.

CONCLUSION AND ORDERS 52 For the reasons set out above I am satisfied that the trade mark application ought not proceed to registration and make orders accordingly. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Solicitor for the Applicant: Spruson & Ferguson Lawyers

Trade Practices Act 1974(Cth)

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