Caterpillar Inc (Caterpillar), the world’s largest heavy equipment manufacturer, has successfully appealed against the Trade Marks Registrar’s decision to dismiss its opposition to Puma SE’s (Puma) PROCAT trade mark (no. 1803303) (PROCAT mark). In Caterpillar Inc v Puma SE  FCA 1014, Justice O’Bryan of the Federal Court, sitting alone, allowed Caterpillar’s appeal and refused the registration of the PROCAT mark on the basis that Caterpillar had successfully made out two grounds of opposition pursuant to sections 44 and 60 of the Trade Marks Act 1995. His Honour did not consider a third ground advanced by Caterpillar, namely section 42(b) of the Act, on the basis that Caterpillar simply relied on its submissions and evidence in respect of section 60, but did not adduce additional evidence in respect of section 42(b).
This case provides an illuminating illustration of the interactions between the grounds of opposition under sections 44 and 60 of the Act, and how those interactions play out against the backdrop of the apparel, footwear and accessories industry, in a dispute between two marks where the prior mark is completely contained in the later mark.
On 21 October 2016, Puma filed its application for the PROCAT mark as a fancy mark in lowercase with sans-serif font, in classes 18 and 25 in respect of clothing, footwear, headgear for wear, bags and accessories. Puma’s application was opposed by Caterpillar, the owner of the following registered trade marks:
- word marks for CAT in classes 18 (no. 567670) and 25 (no. 318732 and 1246277) (CAT word mark); and
- device mark featuring the word CAT straddling a prominent triangle device (no. 502760) in class 18 (CAT device mark)
(collectively, CAT marks).
Caterpillar’s opposition to the PROCAT mark was dismissed by the Trade Marks Registrar. On appeal to the Federal Court, Caterpillar advanced three grounds of opposition, namely:
- under section 44 of the Act, the PROCAT mark was deceptively similar to the CAT marks;
- under section 60, the CAT marks had acquired a reputation in respect of the goods covered by the PROCAT mark prior to the priority date of that mark, and because of that reputation, the use of the PROCAT mark would be likely to deceive or cause confusion; and
- under section 42(b), the use of the PROCAT mark would be contrary to law as it would contravene sections 18 and 29(1)(g) and (h) of the Australian Consumer Law.
Issues in dispute
It was undisputed that the PROCAT mark and the CAT marks covered similar goods. The primary issues in dispute concerned the degree of similarity between the PROCAT mark and the CAT marks, as well as the extent of the reputation in the CAT marks.
Justice O’Bryan’s findings
At - O’Bryan J set out a useful summary of the principles applicable to the determination of deceptive similarity for the purposes of section 44 of the Act. Importantly, his Honour affirmed at  that the relevant comparison to be made between the marks assumes “normal and fair use of the application trade mark for all the goods and services covered by the application”, rather than “the idiosyncratic manner in which the alleged infringer uses the mark”. His Honour stated that considerations of the relevant trade or business, how the goods were sold and the character of the probable consumers were all relevant to this assessment.
When assessing normal and fair use, his Honour gave weight to evidence of Puma’s use of the PROCAT mark in USA and Canada (as Puma had not used that mark in Australia) in respect of products such as football boots, duffle bags and backpacks. The PROCAT mark applied on those products had lowercase letters and had different colours for the letters PRO and CAT. There was also evidence of marketing material referring to the brand as ‘ProCat’ with the letters P and C in uppercase. Interestingly, his Honour did not give weight to Puma’s submission that traders, including itself, tended to use multiple trade marks or branding elements on or in connection with apparel, footwear and accessories sold in the lifestyle and workwear market segments. In his Honour’s view, such considerations were irrelevant to determining normal and fair use, as the Court must ignore other indicia that may distinguish one product from another.
In finding that the PROCAT mark was deceptively similar to the CAT marks, his Honour observed that the PROCAT mark contained the entire CAT word mark and one of the two components of the CAT device mark. Earlier in the judgment, his Honour referred to Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd  FCAFC 196 in which the Full Federal Court held at  that, where two marks share a common element, particularly if the common element is an “essential feature” of both marks, then it would increase the likelihood of the later mark being considered deceptively similar to the prior mark. Further, his Honour accepted Caterpillar’s submission that ordinary consumers were likely to read, understand and pronounce the PROCAT mark as a combination of the words PRO and CAT (rather than an invented, meaningless word that would rhyme with ‘pocket’), on the basis that the words PRO and CAT are commonly used in Australian English and consumers would more naturally refer to PROCAT in a way which gives it meaning. To that end, consumers would likely understand PRO as either an abbreviation of ‘professional’ or a Latin word meaning ‘for’ (being the antonym of ‘against’). This would be the case regardless of whether the PROCAT mark had lowercase sans-serif font of the same colour (as was depicted in Puma’s application), or whether it was rendered in a similar way to how it was used in USA and Canada. His Honour also took into account the “common experience” that, in the lifestyle and workwear market segments, clothing, footwear and bags generally had very similar styles across different brands. In light of the above, his Honour found at  that there was
a real and tangible risk that a significant number of consumers, who were familiar with but had an imperfect recollection of the CAT mark, would be confused as to whether goods labelled with the PROCAT mark were connected in the course of trade with CAT branded goods, being a “professional” or high performance or otherwise special line of CAT goods.
At , O’Bryan J helpfully set out a summary of the principles applicable to an assessment under section 60. In particular, his Honour made some illuminating remarks on the interaction between sections 44 and 60. Firstly, the relevant comparison to be made under section 60 is between the actual use of the prior mark versus the notional normal and fair use of the later mark, as such the principles relevant to normal and fair use under section 44, as discussed above, would apply. Secondly, while the relevant comparison is not constrained by the concept of deceptive similarity (as is the case under section 44), the degree of similarity between the two marks in question is still relevant to the assessment. Thirdly, the test for determining confusion or deception is the same for both sections – it is sufficient that “consumers might wonder whether the respective goods might be connected in the course of trade” or “consumers might think that the product bearing the impugned mark is a variant of, or related to, an existing brand” (at [119(g)]). In a similar vein, the test for the likelihood of confusion or deception is also the same – it is sufficient to establish a “real and tangible danger of confusion or deception”, or that an “ordinary person entertains a reasonable doubt” (at [119(h)]).
In finding that Caterpillar had successfully made out a ground of opposition under section 60, his Honour accepted Caterpillar’s submission that it had acquired a substantial and valuable reputation in Australia in both the CAT word mark and the CAT device mark, in respect of apparel, footwear, bags and accessories in both lifestyle and workwear market segments, by reason of its use and promotion of the CAT marks in Australia. For the same reasons expounded in respect of section 44, his Honour held that because of the reputation of the CAT marks in Australia, the use of the PROCAT mark would also be likely to cause confusion in the minds of a significant number of consumers. Importantly, his Honour rejected Puma’s submission that the CAT marks had enjoyed such a strong reputation in Australia and consumers were so familiar with the CAT marks, that confusion with the PROCAT mark would be unlikely. While the CAT marks had acquired a strong reputation in Australia, they could not be described as being so famous that their reputation would militate against any likelihood of confusion in the marketplace.
You can access the full text of the Court’s decision here.