Australian Federal Court Decision – VAGISIL v VAGISAN

Dr August Wolff GmbH & Co. KG Arzneimittel v Combe International Ltd [2020] FCA 39 (3 February 2020)

 

On 3 February 2020, Dr August Wolff GmbH & Co. KG Arzneimittel (Dr Wolff) successfully appealed against a decision by the Registrar of Trade Marks, which refused registration of its VAGISAN trademark.

Background

The VAGISAN trade mark was filed by Dr Wolff on 27 May 2015 for a broad range of personal care products in classes 3 and 5.

This registration was successfully opposed by Combe International Ltd (Combe), the owner of prior VAGISIL trade mark registrations which also cover personal care products classes 3, 5 and 10.

A Delegate of the Registrar of Trade Marks refused registration of the VAGISAN trade mark on 29 September 2017 under s60 of the Trade Marks Act 1995 based on Combe’s reputation of its earlier VAGISIL trade mark.

Dr Wolff subsequently appealed this decision.

Grounds of Opposition

Section 44

The VAGISAN application covers the following goods:

Class 3: Soaps and cosmetics, all aforementioned goods not for the indication and application of tired legs and/or arms

Class 5: Pharmaceutical products, sanitary products for medical purposes; dietetic substances for medical purposes, all aforementioned goods not for the indication and application of tired legs and/or arms

(VAGISAN Goods).

The VAGISIL registrations cover the following goods:

Class 3: Medicated lotions and medicated creams; non-medicated products for feminine use

Class 5: Medicated products for feminine use; vaginal lubricants; medicated creams, gels, lotions

(VAGISIL Goods).

Dr Wolff accepted that the class 3 VAGISAN Goods are similar to the class 3 VAGISIL Goods.  However, it did not consider the class 5 VAGISAN Goods to be similar due to the “highly specialised” nature of the class 5 VAGISIL Goods.

Stewart J found that “pharmaceutical products” and “sanitary products for medical purposes” covered by the VAGISAN trade mark are similar to the class 5 VAGISIL Goods on the basis that:

(1) the goods would typically sold through the same trade channels (i.e. pharmacies, supermarkets and online);

(2) producers of pharmaceutical products might also produce medicated lotions and medicated creams; and

(3) producers of sanitary products for medical purposes might also produce medicated products for feminine use, medicated douches and various other goods.

On the issue of deceptive similarity, Stewart J found that both the VAGISAN and VAGISIL trade marks are likely to be understood as being associated with products to be used in relation to the female genital area. However, while the idea of VAG (or VAGI) is descriptive, the words VAGISAN and VAGISIL do not have a close phonetic resemblance and neither of the words lends itself to mispronunciation. Further, both words are invented words and the suffix elements SIL and SAN are quite distinct.

Stewart J also dismissed Combe’s argument that there is a greater likelihood of confusion as consumers of products for feminine use are not likely to pay attention to what they are purchasing.

The s44 ground of opposition was unsuccessful

Section 60

Section 60 requires a reputation amongst a significant or substantial number of people or potential customers in the relevant mark i.e. the potential customers of the VAGISAN goods. Although, there is not a significant distinction given the overlap in the goods provided by the VAGISAN and VAGISIL trade marks.

Combe sought to rely on evidence comprised of schedules of sales figures and consumption data for VAGISIL products, extracted from a computer database by IRi Australia. It argued that the evidence should be admissible as an exception to the rule against hearsay on the basis that it constitutes business records. Dr Wolff objected to the admissibility of the schedules, not the data contained in the schedules. However, Stewart J was satisfied that the schedules should be admitted.

Both Combe and Dr Wolff sought to tender survey evidence, although Dr Wolff’s evidence was in relation to consumer behaviour rather than Combe’s reputation. Dr Wolff objected to Combe’s survey reports on the basis that they were not business records of the survey companies or Combe itself. Stewart J was satisfied that the reports submitted form part of the records belonging to or kept by Combe in the course of, or for the purposes of a business. The survey evidence from both parties were admitted and Stewart J indicated that there is no reasons to suppose that the hearsay statements recorded in the reports are other than accurate.

There has been consistent use of the VAGISIL brand in Australia since 1986 for personal products for feminine use, which have been sold through approximately 6,400 supermarkets and pharmacies. Further, there has been significant advertising and promotional activity through various channels. Despite the relatively small market share based on the sales figures provided, Stewart J considered that reputation of the VAGISIL trade mark was established in Australia as at the priority date. However, the form of trade mark which enjoys reputation is the VAGISIL trade mark used in conjunction with a “V” Device, rather that VAGISIL on its own. It is used in this composite form:

 

 

Consequently, confusion between the trade marks is likely to be less in light of the distinctive “V” Device.

Combe was not able to establish that because of the reputation of the VAGISIL trade marks a significant or substantial number of potential customers might be confused or deceived by the VAGISAN mark such as to wonder whether there is any connection between it and VAGISIL.

Accordingly, the s60 ground of opposition was also unsuccessful

Section 59

As at May 2015, Dr Wolff had the intention to sell five VAGISAN products in Australia. Based on evidence provided on behalf of Dr Wolff, none of these products were directed for use on any part of the human body other than the female genital area. On this basis, Combe submitted that there was no intention to use the trade mark in relation to soaps and cosmetics for use on other body parts

Even though the goods were limited for use on a specific area of the body, Stewart J considered the fact that soap and cosmetic products were proposed to be introduced is sufficient intention to use the VAGISAN trade mark in respect of the designated goods.

The s59 ground of opposition was also unsuccessful

Decision

Combe failed to establish any ground of opposition and, therefore, Dr Wolff’s appeal was successful.

Combe subsequently filed an appeal to the Full Federal Court of Australia.

Takeaway

This decision is under appeal and it will be interesting to see if the first instance decision is maintained. Nevertheless, the decision provides some guidance regarding what might be admitted into evidence as business records, and the potential for difficulty establishing reputation in a word alone when it is used with other significant branding elements.

Other Opposition / Invalidity Actions

The VAGISAN trade mark has also been opposed by Combe in a number of other countries. The most recent decisions handed down were in Singapore and the United States.

Combe filed an application for declaration of invalidity with the Intellectual Property Office of Singapore based on the grounds of likelihood of confusion. Combe successfully invalidated the VAGISAN trade mark in Singapore, however, an appeal from this decision to the High Court is pending.

In the United States, the Trademark Trial and Appeal Board (TTAB) dismissed an opposition filed by Combe in the first instance. This decision was subsequently appealed to the US District Court. However, on appeal, the VAGISAN trade mark was found to be likely to cause confusion with the VAGISIL registration.