Chocolaterie Guylian n.v. v Registrar of Trade Marks  FCA 891.
In an appeal from a decision of a Delegate of the Registrar of Trade Marks, the Federal Court has held that Guylian's seahorse shape was not sufficiently distinctive to qualify for registration under section 41(3) of the Act, and did not and would not have capacity to distinguish Guylian's pralines and chocolates from those of other traders under section 41(5) of the Act.
FACTS OF THE CASE
Guylian, the Belgian manufacturer of boxed chocolates, obtained an international registration of its chocolate seahorse shape as a trade mark and applied to extend protection to Australia on 16 October 2002. The trade mark consists of a seahorse for pralines and chocolates.
The Delegate of the Registrar of Trade Marks refused to register the seahorse shape mark on the basis that it was not capable of distinguishing Guylian's goods within the meaning of section 41(5) of the Trade Marks Act 1995 (Cth) (the Act). The Delegate's internet searches conducted December 2002 and April and June 2004 during the course of examination of the application identified other traders selling chocolates in animal shapes, although the websites appeared to be US and there was no evidence that the product displayed on the websites was available for purchase in Australia. Guylian appealed the decision.
His Honour, Justice Sundberg of the Federal Court, dismissed Guylian's appeal.
Justice Sundberg considered two important preliminary legal points, namely whether the presumption of registrability provided for under section 33 of the Act applied to the entirety of section 41 of the Act and what the onus was in determining whether a trade mark is registrable under section 41 of the Act. There had been some uncertainty concerning the latter issue since the decision in Lomas  FCAFC where the court found that on an appeal under section 56 of the Act, the Court should only uphold an appeal if it is satisfied the trade mark should clearly not be registered.
Justice Sundberg stated that the presumption of registrability applies to section 41(3) but because of the nature of the words in sections 41(5) and 41(6) the presumption does not apply to these sections. Use of the term “satisfy“ in section 41(5) and “establish“ in section 41(6) indicates that the presumption is not applicable under these subsections.
Moreover, the effect of the presumption of registrability under section 41(3) is that, in considering whether a trade mark is capable of distinguishing by reason of the “inherent adaption“ criteria, it should be presumed that the mark is sufficiently adapted unless the Registrar is satisfied otherwise on the balance of probabilities. Under section 41(5) or (6), the presumption no longer has any operation, and a test of “satisfaction“ requires the Registrar to “be persuaded of the matter according to the balance of probabilities“.
Justice Sundberg clarified that the onus under section 41 is “on the balance of probabilities“ and therefore rejected the principle established in Lomas  FCAFC. There is no question of any special higher standard in respect of section 41(5) or (6) because those provisions place the onus on the applicant.
Guylian's seahorse shape was not inherently adapted to distinguish under section 41(3) of the Act
In its arguments for registration under section 41(3) of the Act, Guylian relied on the decision in Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks  FCAFC 273 (Kenman Kandy) where a “bug shape“ was accepted as inherently adapted to distinguish on the basis that it was a “concocted, imaginary shape“. Guylian argued its seahorse shape was “fanciful“ because its tail curled backwards and was stocky in build, and therefore different to an ordinary seahorse found in nature.
Although His Honour accepted that a shape reminiscent of a real animal or creature could be inherently adapted to distinguish, he considered Guylian's seahorse shape mark was not unique or imaginative and that on balance, the average consumer would see it as a relatively ordinary representation of a seahorse.
In His Honour's view, it was quite possible that as at the priority date of 16 October 2002, other traders might wish to make chocolates in the shape of a seahorse. His Honour considered that evidence of other seahorse shapes in the market, which he considered not significantly different from Guylian's shape, tended to confirm rather than deny the likelihood that other traders would wish to depict this chocolate in the shape of a seahorse. His Honour rejected Guylian's submission that the subsequent use of similar shaped seahorses by other traders was improperly motivated, there being no evidence that the other traders sought to assert a connection with Guylian, or that Guylian had in any way protested about these rival sales.
Guylian's seahorse shape does not and will not have capacity to distinguish Guylian's goods under section 41(5) of the Act
Guylian relied on the following evidence of use as demonstrating the seahorse shape's capacity to function as a trade mark for its goods:
- sales of its seahorse shaped chocolates in Australia for almost 30 years, including extensive sales figures, and examples of product packaging, including seahorse shaped boxes;
- a diverse range of marketing and advertising, including print, media, point of sale and website advertising, as well as various promotions and participations in exhibits at trade shows and expos; and
- sponsorship and promotion of a marine conservation research project, entitled 'Project Seahorse' since 1999.
Guylian also submitted results of a national online survey where 40.6% of respondents associated Guylian with the seahorse shape.
However, His Honour was not satisfied that the evidence demonstrated that consumers would recognise the seahorse shape as a badge of origin for Guylian.
Guylian's product packaging features the seahorse shape but also other sea shell shapes, displayed with equal prominence and also featured the GUYLIAN trade mark. Guylian's G trade mark was also engraved onto each piece of chocolate. His Honour accepted that a sign may be registrable as a trade mark even if it is used together with other trade marks. However, evidence that the sign itself had been used as a trade mark must be demonstrated. In this case, His Honour considered Guylian's packaging gave the impression that the seahorse shape would have been used to describe the boxes' contents and that the presence of the GUYLIAN and G trade mark had the effect of diluting any trade mark's significance that might otherwise attach to the seahorse shape.
His Honour accepted Guylian's seahorse shaped boxes showed trade mark use of the shape but that as both the GUYLIAN and G trade marks featured significantly on the front of these boxes, the trade mark's significance was diminished.
His Honour found Guylian's association with Project Seahorse had an ability to promote Guylian's products, in particular the seahorse shape. However, in His Honour's view, although Guylian's involvement and the promotional material might create a mental association in the mind of a consumer between Guylian and the seahorse shape, the evidence fell short of use of the shape by Guylian as a trade mark.
His Honour accepted that a significant proportion of the survey respondents associated Guylian with the seahorse shape but considered this evidence was not enough to prove that the public had been educated to understand the seahorse shape to function as a badge of origin for Guylian. The survey results did not prove that consumers viewed the seahorse shape as a trade mark for Guylian, to the extent they would rely upon the appearance alone to identify the goods.
Implications for brand owners:
- Brand owner should ensure a shape is being used as a trade mark and not merely as a descriptor of a product.
- Use of a shape mark together with a word mark on product packaging can dilute the trade mark significance of a shape mark and brand owners should be careful to ensure that a shape mark is used with equal prominence to the word mark and that the shape functions as an indicator of source and not as a product descriptor.
- Evidence that consumers associate a shape mark with a trader will not be persuasive that the shape indeed functions as a trade mark. A brand owner must be able to demonstrate that the public rely on the shape alone as a badge of origin for its goods.
- The case confirms that shapes based on known objects can be registered as trade marks, but this will depend on the likelihood of other traders wanting to use the shape for its ordinary signification.
- Brand owners should be diligent in taking action against third parties using shape marks similar its own to preserve its rights in that particular shape, which will assist when it attempts to obtain registration protection for those rights and/or enforce those rights.
Implications for practitioners:
- Practitioners should expand their consideration of marketplace conditions to post a priority date as well as pre a priority date when assessing registability of a shape mark. Evidence of no other traders using a similar shape mark will assist in demonstrating the likelihood of other traders wanting to use a similar mark regardless of whether this evidence is pre or post the priority date.
- Survey questions should be carefully crafted. Instead of asking 'do you associate that shape with any brand or manufacturer?', a better question may be 'do you regard that product as being made by a particular manufacturer? If so, which one?'.