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					                             TRADE MARKS ACT 1955


   DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS


Re:    Opposition by NEW BALANCE ATHLETIC SHOE INC. to Applications
       Nos 434527 and 483228 in the Name of HUGH CASWELL DINNING



Application no. 434527 was lodged on 11 October 1985 in the name of HUGH

CASWELL DINNING (hereafter "the applicant"). After amendment during the course of

examination the application was advertised accepted on 2 June 1988 in respect of the

following goods:

       Clothing, including men's and boys' clothing, casual clothing, casual clothing for
       men and boys, sportswear for men and boys; but excluding all kinds of footwear.
The mark is shown below:




Application no. 483228 was lodged on 11 March 1988, also in the name of HUGH

CASWELL DINNING, but claimed the date of the earlier application pursuant to s43(1)

of the Act which states:


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New Balance Opposition             1
       43. (1) Where a part of a trade mark which is the subject of an application for
               registration is separately registrable as a trade mark, the applicant may,
               before the application has been accepted or refused, make a further
               application for the registration of that part in respect of goods or services
               in relation to which the first-mentioned application was made.


The claim was allowed and this application was advertised accepted on 15 June 1989,

with the priority date of the first application, 11 October 1985, in respect of the following

specification of goods:

       Men's and boys' clothing, including men's and boys' casual clothing, but
       excluding footwear.
The subject of this application is the word BALANCE alone.



Notice of opposition to the first of the applications was lodged on 21 July 1989 and to the

second on 16 August 1989 by NEW BALANCE ATHLETIC SHOE, INC. of

Massachusetts, USA ("the opponent"). Both notices are substantially identical and recite

a number of broad grounds of opposition. The evidence stages of the proceedings were

completed on 27 February 1991 and the matter came on for hearing in Sydney on 3

March 1992.Mr Brett Doyle, solicitor of Blake Dawson Waldren, appeared for the

applicant. The opponent was not represented at the hearing but written submissions were

lodged by Mr Trevor Stevens, legal practitioner, of Davies Collison Cave.



Mr Stevens submitted that the opponent's evidence showed that the use by the opponent

of the trade mark NEW BALANCE commenced in Australia prior to June 1977 and that,

although that use related only to athletic shoes, use of the same mark in relation to

clothing commenced during the period 1980 to 1982. On the applicant's own evidence its

use of the BALANCE marks in relation to clothing commenced in August 1984 and

therefore as the opponent was the first user it was the proprietor of the trade mark

BALANCE for the purposes of s40 of the Act: Blackadder v Good Roads Machinery Co.


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New Balance Opposition               2
Inc. (1926) 38 CLR 332; Re Registered Trade Mark "Yanx" (1951) 82 CLR 299. He

argued that the differences between the opponent's mark NEW BALANCE and the mark

the subject of application 434527, the word BALANCE together with the device of an

exercising man, were immaterial and that the marks were so similar as to raise the issue

of proprietorship: The Seven Up Co. v O.T. Ltd (1947) 75 CLR 203; The Kendall Co. v

Mulsyn Paint and Chemicals (1962-63) 109 CLR 300.



Mr Stevens also relied on s33 of the Act. The opponent is the registered proprietor of

trade mark no. B304739 in respect of "Athletic shoes, insoles, heel pads" and of trade

mark no. A415796 in respect of "Shoes, including shoes for use in running, jogging and

athletics; insoles; heel pads." The first mark consists of the words NEW BALANCE and

the second of the same words together with the letters NB the right to the exclusive use of

which has been disclaimed. The opponent has also applied to register the mark NEW

BALANCE for articles of clothing under application 457998. This application was

lodged on 5 January 1987 and is therefore later than the the applicant's two applications.

Mr Stevens argued that the applicant's marks were deceptively similar to the opponent's

marks and that the goods were goods of the same description as those for which the

opponent's marks are registered so that both conditions of s33 were satisfied. He said that

the latter question was one of fact to be looked at from a business and commercial point

of view in light of the principles laid down by the courts in cases such as Southern Cross

Refrigeration Co. v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 and Jellinek's

Application (1946) 63 RPC 59. Those cases establish that the relevant considerations are:

       . the nature of the goods;

       . the respective uses of the goods; and

       . the trade channels through which they pass.

He said it was commonplace for athletic shoes to be worn casually and away from the

sports arena and teamed with singlets, shorts, sweat shirts and T-shirts; that it was the

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New Balance Opposition               3
practice of sporting goods stores to stock a wide range of apparel designed to double as

both athletic and casual wear and also of fashion retailers to stock athletic shoes.

Moreover, athletic shoes and casual clothing were often manufactured by the same

company under the same trade mark. In assessing whether the marks in question are

substantially identical the marks should be compared side by side: Shell Co. of Australia

Ltd v Esso Standard Oil (Australia) Ltd (1951) 109 CLR 407 at 414-415. In deciding

whether the marks are deceptively similar the relevant test was that laid down in Smith

Hayden & Co Ltd's Application (1946) 63 RPC 97, that is, assuming use by the oponent

of its mark in a normal and fair manner for any of the goods covered by the registration

could the tribunal be satisfied that there would be no reasonable likelihood of deception

and confusion among a substantial number of persons if the applicant also used the mark

proposed for registration in a normal and fair manner for any of the goods covered by the

application. Mr Stevens submitted that on all the relevant tests the applicant's marks were

deceptive and confusing, the word BALANCE being the essential feature of the

opponent's marks by which they would be known and remembered: Pianotist Co's

Application (1906) RPC 774; De Cordova v Vick Chemical Co (1951) 68 RPC 103; The

Seven Up Co v Bubble Up Co. Inc. (1987) 9 IPR 259.



Mr Stevens went on to submit that objections existed to the registration of the applicant's

marks by virtue of s28 of the Act. Once again, he said, the relevant test was that stated by

Evershed J in Smith Hayden's Application (supra), that is, whether having regard to the

reputation acquired by the opponent's marks, the Registrar could be satisfied that the

mark applied for, if used in a normal and fair manner in connection with any of the goods

covered by the registration proposed, would not be reasonably likely to cause deception

and confusion amongst a substantial number of persons. The opponent's evidence

showed, he said, that the opponent enjoyed a considerable reputation in its trade marks in

Australia both in relation to footwear and clothing. For the reasons already given in

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New Balance Opposition               4
connection with s33 the applicant's marks would be likely to lead to deception and

confusion of the public. In addition, he said, even if the applicant's casual wear and the

opponent's sports clothes were sold in separate retail outlets opportunities for confusion

could arise because in many shopping centres sports stores are located in close proximity

to fashion retailers and the respective goods could be displayed on racks outside the

shops. Because of the possibility of confusion registration of the marks would be contrary

to para 28(a) of the Act. Since use of the marks would also constitute passing off and a

contravention of the Trade Practices Act 1974 registration would also be contrary to para

28(b) of the Act. Moreover, the failure of the applicant to search the Register before

applying for registration and his use of the word BALANCE alone, despitr the

application to register a composite mark consisting of the word and the logo, constituted

"creeping misappropriation" of the opponent's marks and therefore blameworthy conduct

in terms of para 28(d) of the Act.



Finally, Mr Stevens submitted that I should exercise the Registrar's discretion to refuse

registration of the marks on the ground that the applicant had failed to show affirmatively

that his marks would not be likely to deceive. The matter therefore remained in doubt and

in the public interest the applications should be refused: Southern Cross case (supra).



Mr Doyle submitted at the hearing that, although the applicant did not dispute the

proprietorship of the trade mark NEW BALANCE, the applicant's marks were different

and the question did not really arise. With respect to s33 he argued that the goods of

interest to the applicant and those in respect of which the opponent claimed rights by

virtue of its earlier registrations were not goods of the same description. The result of the

cumulative effect of the differences between the marks themselves and the goods would

be that the risk of confusion would be avoided. The same applied to the relevant

questions under para 28(a). Both parties enjoyed a reputation in the marketplace and the

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New Balance Opposition               5
respective rights which they had acquired should be respected so that justice between the

parties should be done.



Mr Doyle went on to submit that even should I find against him on s33 or s28 the

provisions of s34 should be applied to the applications. Although he conceded that as at

the date of lodgment of the applications sufficient evidence of honest concurrent use to

warrant registration could not be shown to satisfy sub-s 34(1), nevertheless the special

circumstances of the sub-section should be applied to the applications because if the

present applications were refused the applicant could simply refile the applications and

gain registration on the basis of use made of the marks in the meantime. He submitted

that there was no evidence of lack of honesty in the applicant's adoption of his marks or

of the "creeping misappropriation" referred to by Mr Stevens. The opponent had, he said,

only developed an interest in clothing since the applications were lodged and there was

simply no evidence of mala fides on the part of either party. He also conceded that there

was a possibility of some confusion but that that was not fatal to an application under s34

if the degree of confusion was tolerable. As to the relative inconvenience to the parties

Mr Doyle submitted that the opponent would suffer none whereas the applicant if denied

the benefits of registration would suffer considerable inconvenience. It would also enable

the opponent's later applications to proceed to registration and expose the applicant to the

risk of proceedings for infringement and a claim for damages for its extensive use of the

mark in circumstances where the opponent had not taken legal proceedings to prevent the

applicant's use of his marks. It would be in the public interest that the Register reflect the

commercial realities of the marketplace and not a narrow and legalistic application of the

provisions of the Act.



Decision



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New Balance Opposition                6
It will be convenient to deal with each of the grounds relied on by the opponent in turn:



proprietorship

I am not concerned, in deciding the issue of proprietorship, with the question whether the

opponent's and applicant's marks are so alike as to lead to the deception or confusion of

customers. That question is relevant in relation to ss 33 and 28 but not to s40 which only

applies where the marks are identical or so similar as to be virtually the same mark: The

Kendall Co v Mulsyn Paint and Chemicals 109 CLR 300; Tavefar Pty Ltd v Life Savers

(Australasia) Ltd 12 IPR 159. Here the respective marks are overall different marks and

the question of proprietorship does not arise.



On the issue of proprietorship of the mark in suit, therefore, I find that even though the

opponent has demonstrated use of its mark in respect of the relevant goods prior to the

date of the application it has not for that reason defeated the applicant's claim to

proprietorship of its different mark under s40 based on the combined effect of authorship

of the mark, the intention to use it upon or in connection with the goods and the applying

for registration: Shell Co (Aust) Ltd v Rohm and Haas Co (1948) 78 CLR 601.




Sections 28 and 33
The tests to be applied under ss.28 and 33 may be stated as follows, paraphrasing the words of

Evershed J. in Smith Hayden & Co Ltd's Application (1946) 63 RPC 97, in which he compared

the tests under ss.11 and 12 of the Trade Marks Act 1938 (UK), which correspond to ss.28 and

33 of the Trade Marks Act 1955 (Cth):


              The questions for my decision ... have been formulated, and I think
              accurately formulated, as follows:




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New Balance Opposition                7
              (a) (Under s.28) "Having regard to the reputation acquired by the name NEW
              BALANCE, is the Registrar satisfied that the mark applied for, if used in a
              normal or fair manner in connection with any goods covered by the
              registrtion proposed, will not be reasonably likely to cause deception and
              confusion amongst a substantial number of persons?";

              (Under s.33) "Assuming user by the opponent of its mark NEW BALANCE
              in a normal and fair manner for any of the goods covered by the registration
              of that mark ... is the Registrar satisfied that there will be no reasonable
              likelihood of deception and confusion amongst a substantial number of
              persons if the applicant also uses its mark BALANCE and device normally
              and fairly in respect of any goods covered by their proposed registration?"


section 28

The date at which the reputation of the opponent is to be assessed is the date of lodgment

of the opposed application: Southern Cross case (supra). In this case that date is 11

October 1985. There is little evidence as to the extent of use of the opponent's marks in

relation to clothing prior to that date. There is a statement by David Paul Freni, the Vice

President for International Operations of the opponent company, that in the year 1982

"the value of products manufactured by Vita Shoe in New Zealand and shipped to

Australia amounted to U.S. $420,942.78". It is elsewhere explained that the opponent had

entered into a licence agreement with the company mentioned under which it was

authorized to manufacture athletic shoes, items of apparel and athletic bags in New

Zealand, and to sell the products nonexclusively in Australia. It is also said elsewhere in

the declaration that the Australian distributor of the opponent, R.Wallace Mitchell Pty

Ltd, had begunto advertise extensively in 1982 the shoes manufactured by Vita Shoes -

no mention of clothing. There is no indication of the proportion of the total figure above

is attributable to clothing. There is also a declaration by Scott Davidson, director of a

company trading as Athletic Design, that in 1982 the company's predecessor in business

had been approached by R. Wallace Mitchell Pty Ltd to design and manufacture a range

of active and casual sportswear under the trade mark NEW BALANCE. He goes on to




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New Balance Opposition               8
state that the wholesale value of sales of goods designed and manufactured by the

company's predecessor during the period July 1983 to June 1985 was as follows:

       July 1983 to June 1984                                $54,400
       July 1984 to June 1985                                $88,000

On the whole the evidence falls far short of showing that at the date of lodgment of the

applications the opponent had established such a reputation in its marks in relation to

clothing that use by the applicant of the marks applied for would lead to the deception or

confusion of a substantial number of persons. There are statements to the effect that there

have been instances of actual confusion both in the trade and amongst the purchasing

public. These occur in a later declaration in reply by the same Hugh Wallace-Dinning, by

Scott Davidson, a director of a company whose predecessor commenced to design and

manufacture clothing for Mr Wallace-Mitchell's company in 1982, and by Neil Ryan,

proprietor of a business conducted under the name "Runners World" in Melbourne. There

is no indication as to when the alleged instances of confusion took place, whether before

or after the relevant date. As against these bald statements the applicant has provided 17

declarations from persons engaged in the menswear trade, either as retailers,

manufacturers or fashion agents, with a length of experience in that trade ranging from 4

to 34 years, but with an average of 15 years relevant experience. All 17 declarants stated

that they recognised the applicant's mark consisting of the word BALANCE and the

exercising man device. In response to the question whether they also recognised the mark

NEW BALANCE 11 declarants answered "no". Of the remaining 6 all nominated shoes

as the goods in connection with which they associated the mark. All of these declarations

were made in 1990. On balance I consider that the evidence of the extent of use of the

opponent's mark as at the relevant date of 11 October 1985 is not sufficient to warrant the

conclusion that the reputation of the mark was such as to lead to the deception or

confusion of a substantial number of persons.



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New Balance Opposition              9
As to whether use of the marks by the applicant would constitute passing off or a breach

of the Trade Practices Act so as to offend against para 28(b) of the Act, that is a matter

for a court of competent jurisdiction to determine and is not a matter which is within the

competence of the Registrar.



With regard to Para 28(d), there is no evidence of blameworthy conduct on the part of the

applicant which would disentitle the trade marks to the protection of a court of law. I

cannot regard failure to conduct a search of the Register for conflicting marks before

applying for registration as such conduct. Likewise, there is no evidence of an intention

on the part of the applicant to misappropriate the opponent's marks as alleged by the

opponent.




section 33

The two questions for decision under the relevant sub-section (1) of s33 are whether the

marks are substantially identical or deceptively similar and whether the respective sets of

goods are the same goods or goods of the same description. In the case of application

434527 the marks are not substantially identical on a side by side inspection because of

the prominence of the device of the exercising man. The same is true of application

483228 because of the presence in the opponent's mark of the word NEW. In both cases,

however, bearing in mind the principle of imperfect recollection I regard the marks as

deceptively similar in the sense that, according to the definition of that expression in sub-

s 6(3), the applicant's marks would be likely to cause confusion because despite the

presence of the device in one of those marks both would tend to be known and referred to

by the word BALANCE: Re Application by Hardings Manufactures Pty Ltd t/a Wyandra

Industries (1987) 8 IPR 147. The word BALANCE is not apt for normal description of

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New Balance Opposition               10
the goods in question and cannot therefore be discounted in comparing the marks for the

purpose of determining the question of deceptive similarity.



The second question to be decided is whether the respective sets of goods are the same

goods or, if not, whether they are goods of the same description.

In the Southern Cross case (supra), at 606, the High Court of Australia cited with approval the

following passage from the decision of the Assistant-Comptroller in In re an Application by

John Crowther & Sons (Milnsbridge) Ltd (1948) 65 RPC 369, 372 which in turn was following

the words of the decision of the Assistant-Comptroller in In the Matter of an Application by

Beck, Koller & Company (England) Limited for the Registration of a Trade Mark 64 RPC 76:


             "In arriving at a decision upon this issue the reported cases show that I have
             to take account of a number of factors, including in particular the nature and
             characteristics of the goods, their origin, their purpose, whether they are
             usually produced by one and the same manufacturer or distributed by the
             same wholesale houses, whether they are sold in the same shops over the
             same counters during the same seasons and to the same class or classes of
             customers, and whether by those engaged in their manufacture and
             distribution they are regarded as belonging to the same trade. In the case of
             Jellinek's Application (63 RPC 59), Romer J. classified these various factors
             under three heads, viz., the nature of the goods, the uses thereof, and the trade
             channels through which they are bought and sold. No single consideration is
             conclusive in itself."


It has been a longstanding practice of this Office to treat footwear, being boots, shoes and

slippers, as not being goods of the same description as other articles of clothing. The

nature and purpose of the goods could be regarded as the same, namely, to clothe parts of

the body, but this consideration was outweighed by the other factors mentioned in the

above passage. The practice grew up at a time when the manufacturing origins of the

goods and the trade channels through which they passed were quite separate. Boots and

shoes were produced by different manufacturers and sold through different wholesale and

retail outlets, whether specialist shoe shops or separate departments in larger general


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New Balance Opposition               11
              stores. The goods were not regarded as belonging to the same trade. There are many

              examples of the same or closely similar marks co-existing on the Register in the names of

              different proprietors for these two sets of goods. In the case of athletic shoes, variously

              called runners, joggers, trainers, among other terms, and sportswear such as track suits,

              sweatshirts, T-shirts etc that situation has changed dramatically with the advent and rapid

              growth of famous marks such as Adidas, Reebok, Puma, Nike and many others, names

              which are associated with the whole range of sports clothing, both shoes and the other

              articles mentioned above. These are commonly sold side by side in specialist sporting

              goods shops or in special departments of larger general stores. This trend is likely to

              continue with more and more manufacturers vying for a share of an extremely lucrative

              market and more and more marks appearing in the marketplace. In these circumstances it

              is difficult to avoid the conclusion that, if the tests established by the cases are still the

              appropriate ones, athletic shoes and other articles of sportswear must be considered to be

              goods of the same description since the nature and purpose of the goods, the trade origins

              and the trade channels through which they move are the same in both cases. I therefore

              accept Mr Stevens' submission that the question is one of fact and that from a business

              and commercial point of view and in light of the principles laid down by the courts the

              respective sets of goods in issue must be considered goods of the same description.



              For the above reasons I find that there is an objection under s33 of the Act to the

              registration of both of the marks applied for by the applicant.



              Section 34

my finding that an objection exists in terms of s33 is that I now must consider whether the provisions of

              s34 can be applied in favour of the applicant's applications. Section 34 is in the following

              terms:



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              New Balance Opposition                 12
honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it
                     proper so to do, the Registrar may permit the registration of trade marks which are
                     substantially identical or deceptively similar, or, but for the honest concurrent use
                     or other special circumstances would be deceptively similar, for the same goods or
                     services or other goods or services, by more than 1 proprietor subject to such
                     conditions and limitations (if any) as the Registrar imposes.

a person has, by himself or his predecessors in business, continuously used a trade mark before the use,
                    or before the date of registration, whichever is the earlier, of another registered
                    trade mark by the registered proprietor of that other trade mark, by his predecessors
                    in business or by a registered user of that other trade mark, the Registrar shall not
                    refuse to register the first-mentioned trade mark by reason of the registration of that
                    other trade mark.



                No attempt was made by the applicant to make out a case under sub-s(2) and I need

                consider only the case for honest concurrent use or other special circumstances. It is well

                settled that in matters concerning honest concurrent use the relevant date before which

                that use must have occurred is the date of application for registration made by the party

                seeking to show honest concurrent use: "Granada" Trade Mark [1979] RPC 303, 312,

                Gloy and Empire Adhesives Ltd's Application (1934) 51 RPC 63, 69. The relevant date

                here, then, is 11 October 1985. Since use of the marks commenced in August 1984

                according to the applicant's own declaration, at the date of lodgment of application

                434527 there had been a little more than one year's use of the mark concurrently with the

                registered mark of the opponent. I find this manifestly inadequate to warrant the

                application of the concurrent use provisions of s34. It is therefore unnecessary for me to

                make any finding as to the honesty of the adoption of the applicant's marks. With respect

                to application 483228, as there is little or no evidence of the use of that mark in that form

                I also decline to apply those provisions to that mark.

                The applicant commenced use of the composite mark in 1984. At present therefore it has

                been using that mark for some eight years and by its uncontradicted evidence has built up

                a business with a turnover of several million dollars a year. Although I have said that the


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                New Balance Opposition               13
honest concurrent use provisions of s34 apply as at the date of the lodgment of the

application I think I am entitled to take into account that the inconvenience to the

applicant of refusing the application now would appear to outweigh by far the

inconvenience to the opponent of allowing registration. Further, as Mr Doyle pointed out,

if I were to refuse the application the applicant could simply reapply and almost certainly

obtain registration on the basis of extensive and concurrent use over the last eight years. I

should also take into account that the evidence appears to show that the opponent

developed a substantial interest in articles of clothing other than athletic shoes only after

the date of lodgment of the application, and also that the practice that I have mentioned of

allowing similar marks to coexist on the Register for boots, shoes and slippers on the one

hand and articles of clothing on the other was in force at the date of lodgment of the

application and that the applicant had expressly excluded all kinds of footwear from the

specification of his application. All of these factors taken together warrant, I believe, the

application of the special circumstances provision of s34 in the case of 434527.

Application 483228 on the other hand was lodged on 11 March 1988 although claiming

the lodgment date of the earlier application. There is no evidence when use of the mark in

that form, that is, the word BALANCE alone began. Indeed there is little evidence of any

use at all of that mark. I am not prepared to apply the same provision to that application.


For the reasons outlined above I am prepared to find that, in the case of application

434527, special circumstances exist which warrant the application of the provisions of

s34 of the Act. As there is little or no evidence of the use of the mark BALANCE alone I

am not prepared to do the same in the case of application 483228.




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New Balance Opposition                14
In the result I direct that in the absence of any appeal from this decision the mark the

subject of application 434527 proceed to registration and that application 483228 be

refused. In the circumstances I consider it appropriate that I make no order as to costs.




Michael Homann
Hearing Officer


15 September 1992




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