1872 Holdings VOF v Havana Club Holding SA - [2017] ATMO 12

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:Opposition by 1872 Holdings VOF to extension of protection to International Registration Designating Australia 1236602 (Australian trade mark application 1677248) (33, 41, 43) - HAVANA CLUB ESSENCE OF CUBA - in the name of Havana Club Holding SA.

Delegate:	Iain Campbell Thompson
Representation:	Opponent: James Maxwell of Peter Maxwell and Associates, Patent and Trade Mark Attorneys Holder: Peter Hallett of Watermark Intellectual Asset Management
Decision:	2017 ATMO 12 *Trade Marks Act 1995* Regulation 17A.33 opposition to extension of protection: sections 44, 42, 61, and 62A; section 44 – ‘zombie’ trade marks discussed – ground not established; section 42 – Opponent has not established the reputation of a trade mark in Australia; section 61 – trade mark not an indication of geographic origin and subsection 61(2) is established by Holder; section 62A – application not made in bad faith. Opposition not established

Background

In these proceedings under the Trade Marks Act 1995 (‘the Act’) Havana Club Holding SA (‘the Holder’) seeks extension of protection to the International Registration Designating Australia (‘the IRDA’) which appears below:

Application No:           1677248
International No:          1236602
Filing Date:                  20 November 2014
Convention Date:         23 May 2014 (Via 1290070 – Benelux)
Goods/Services:          Class 33: Alcoholic beverages (except beers)

Class 41: Entertainment, advice and information with regard to entertainment; organization of events for cultural or recreational purposes such as shows, concerts, festivals, exhibitions, festive events; production of films (other than advertising films) and video documentaries; production and publishing of music; organization of congresses, colloquiums, conferences, competitions for educational or entertainment purposes; organization of training sessions; publication of newsletters, books and periodicals; publication of newsletters, books and periodicals including online
Class 43: Consultancy relating to cooking recipes, cocktails and beverages; bar services; services for providing food and drink

Trade Mark: HAVANA CLUB ESSENCE OF CUBA

(‘the Trade Mark’)

The Trade Mark was examined as mandated by regulation 17A.12 of the Trade Marks Regulations 1995 ‘the Regulations’ and advertised as accepted for possible protection on 19 March 2015 in the Australian Official Journal of Trade Marks.
On 12 May 2015, 1872 Holdings VOF (‘the Opponent’) filed Notice of Intention to Oppose the extension of protection to the Trade Mark. Thereafter, on 12 June 2015, the Opponent filed its Statement of Grounds and Particulars which specified grounds under sections 44, 41, 42(b) (contrary to law: the Australian Consumer Law), 59, 61, and 62A of the Act. (The Opponent did not argue the grounds under section 41 and 59 at the hearing and, for the sake of completeness, I find that those grounds have not been established).
On 6 August 2015, the Holder filed a Notice of Intention to Defend.
Thereafter, the parties have filed their respective evidence in support, evidence in answer, and evidence in reply as allowed by the Regulations.
Subsequently, the parties requested to be heard. The hearing was before me, a delegate of the Registrar of Trade Marks (‘the Registrar’) in Canberra on 1 February 2017. James Maxwell, of Peter Maxwell and Associates represented the Opponent; Peter Hallett of Watermark Intellectual Asset Management represented the Holder.

Onus

The Opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities.[1]
[1] Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787; (2006) 70 IPR 599; [2006] AIPC 92-146 per Gyles J at [6] to [26]; Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156 at [132]-[133].
The relevant date at which the grounds under regulation 17A.33 must be considered is the filing date of the opposed application[2].
[2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592.

Evidence

The evidence in the matter comprises declarations by:
In Support
Claudio I. Alvarez Salazar, Managing Director, of the Opponent, made on 16 November 2015, with exhibits 1 to 3;
In Answer
Sophie Regisser, Attorney-in-fact of the Holder, made on 26 January 2016, with Annexure SR-1;
In Reply
Mr Julian Clulow, Registered Trade Marks Attorney for the Opponent, made on 4 April 2016.

In Support

The Opponent has familial antecedents in a rum manufacturer in Cuba. The family ran afoul of the Castro regime, was dispossessed of its assets, and fled to Florida. The Opponent now makes rum under the trade marks MATUSALEM and RON MOTUSALEM and has tried, unsuccessfully, to register the trade marks MATUSALEM THE SPIRIT OF CUBA LIBRE, MATUSALEM EL ESPIRITU DE CUBA, and MATUSALEM EL ESPIRITU DE CUBA LIBRE in Australia[3].
[3] These applications were successfully opposed by, inter alia, the Holder: Havana Club Holding SA and Corporacion Cuba Ron S.A. v 1872 Holdings, V.O.F. [2016] ATMO 37.
The Opponent asserts use of the trade mark MATUSALEM; however, it must be observed that this is in a very modest way with annual sales over the six years before the relevant date, occasionally exceeding $US100K and with these sales not, apparently, occurring in Australia. Indeed, it is not stated by Mr Salazar where these sales under the trade mark MATUSALEM occurred.

In Answer

The Holder makes a range of bitters or flavourings under the Trade Mark which are enhanced with rum that is sourced in Cuba. A press release by the Pernod Ricard group (distributors of the goods) states that these goods are made:
[…] exclusively from natural ingredients through a slow maceration process with Havana Club Anejo 7 Anos as the base, aromas of herbs, spices, roots and barks are extracted and used in each of The Essence of Cuba flavours, whilst single flavour extractions are taken from roasted coffee beans, honey, tropical fruits and a selection of fermented leafs respectively to create the four different flavour variants.
Ms Regisser states that the Trade Mark was coined in mid-2013 and products bearing the Trade Mark were launched in around October 2014.
It is not asserted by Ms Regisser that goods bearing the Trade Mark have been sold in Australia.

In Reply

Mr Clulow observes that most of the exhibits to Ms Regisser’s declaration post-date the relevant date.

Section 44

Section 44 of the Act relevantly provides:
44Identical etc. trade marks
(1)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of goods (applicant’s goods) must be rejected if:
(a)the applicant’s trade mark is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar goods or closely related services; or
(ii)a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and
(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.
Note 1:For deceptively similar see section 10.
Note 2:For similar goods see subsection 14(1).
Note 3:For priority date see section 12.
Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.
(2)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:
(a)it is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar services or closely related goods; or
(ii)a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and
(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.
Note 1:For deceptively similar see section 10.
Note 2:For similar services see subsection 14(2).
Note 3:For priority date see section 12.
Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.
Here the Opponent relies on the trade mark detailed below:

Application No:           1604966
Status:  Refused
Priority Date:               10 February 2014

Goods:Class 33: alcoholic beverages (except beer), including, rum, rum liqueurs, rum cocktails and alcoholic beverages containing rum

Trade Mark: MATUSALEM EL ESPIRITU DE CUBA

Endorsements: The applicant has advised that a translation of the SPANISH words MATUSALEM EL ESPIRITU DE CUBA appearing in the trade mark is METHUSELAH, THE SPIRIT OF CUBA.
(‘the Refused Application’)

The priority date of the Refused Application is before the convention date of the Trade Mark. However, as the Holder observes, in order to found its ground under section 44 the Opponent must rely on a trade mark registered by another person or whose registration is being sought by another person. To this the Opponent replies that the matter is to be adjudged at the relevant date: that is, as at the filing date of the Trade Mark when the Refused Application had a status of ‘Pending’.
In short, what the Opponent wishes me to do is to treat the Refused Application as being a ‘zombie’[4] application: dead, but still capable of doing damage to a later comer filed during its pendency.
[4] Zombie marks? Ceased registrations, failed applications and citation objections under s 44 of the Trade Marks Act Michael Handler and Robert Burrell (2013) 23 AIPJ 206 at 206.
The Opponent did not refer me to any authority for this view but the question arose in Chia Khim Lee Food Industries Pte Ltd v Red Bull GmbH[5] where Dodds-Streeton J declined to determine the question as the hearing before her was a strike-out application and the issue is a point of law; that being whether subsections 44(1) and 44(2) of the Act have a continuing operation (that they be read in the present tense) or whether those subsections have respect only to ‘the relevant date’ as regards any conflicting trade marks.
[5] Chia Khim Lee Food Industries Pte Ltd and Red Bull GmbH [2012] FCA 1184.
Some sections of the Act which are written in the present tense do not have a continuing operation: in Suyen Corporation v Americana International Ltd[6] Dodds-Streeton J concluded after extensive discussion of similar issues concerning section 59 of the Act (which is also written in the present tense):
While the Full Court has now confirmed that the intention under s 59 must exist at the date of the application, the arguments in support of the contrary view were not addressed and a number of potential inconsistencies and uncertainties remain.
[6] [2010] FCA 638; (2010) 187 FCR 169; (2010) 87 IPR 262; [2010] AIPC 92-389, at
The issue was more obliquely addressed by the Full Court in E & J Gallo Winery v Lion Nathan Australia Pty Ltd[7] which was discussed, in its turn, in Phone Directories Company Australia Ltd v Telstra Corporation Limited[8]:
Although it was on foot as at the Lodgement Date, the YELLOW DOOR mark was not renewed and has been removed from the register. This gives rise to a controversy as to whether it can form the basis of opposition to registration under s 44. In Davison M and Horak I, Shanahan’s Australian Law of Trade Marks and Passing Off (5th ed, Thomson Reuters, 2012) at [50.2165], the learned authors state that “[a] removed registration cannot found an opposition under s 44(1) and 92.” They cite Winton Shire Council v Lomas [2002] FCA 288; (2002) 119 FCR 416 and Automobiles Peugeot v Viva Tine Corp (2001) 54 IPR 568.
Against this PDCA points to the decision of the Full Court in E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2009] FCAFC 27; (2009) 175 FCR 386 (“Gallo”). In a part of the decision that was not overturned on appeal, at [62] to [64] Moore, Edmonds and Gilmour JJ approved the primary judge’s decision that the order for the removal of that trade mark from the register operated from the date of judgment, and not retrospectively. Infringement of the trade mark was therefore still possible up to the point when the Registrar made an entry in the register that the mark had been removed. PDCA contends by parity of reasoning with Gallo, that because YELLOW DOOR was on the register at the Lodgement Date and it was deceptively similar to the YELLOW Trade Mark, that the YELLOW mark was not registrable on that date. It contends that it would be illogical for YELLOW to be permitted to be registered simply because YELLOW DOOR was later removed.
Because I consider that the YELLOW mark is deceptively similar to the other three marks cited, nothing turns on this controversy in the present case. It is unnecessary to decide.
[7] (2009) 175 FCR 386; [2009] FCAFC 27; from [62] to [64].
[8] [2014] FCA 373
In my consideration, that subsections 44(1) and 44(2) should be applied having regard to the status of potentially conflicting trade marks at the time of the assessment is affirmed by reference to other sections of the Act and to the Regulations which look to its operation at the time of the assessment – for example, section 36 and regulation 4.13. Section 36 of the Act provides:
36Deferment of acceptance
The Registrar may defer the acceptance of the application in the circumstances, and for the period, provided for in the regulations.
Regulation 4.13 provides:
4.13Deferment of acceptance
(1)The Registrar may, at the request of the applicant in writing, defer acceptance of an application for registration of a trade mark, if:
(a)the request is made within a period prescribed in subregulation 4.12(1); and
(b)the Registrar reasonably believes that there are grounds for rejecting the application under subsection 44(1) or (2) of the Act, or subregulation 4.15A(1) or (2), because of another trade mark:
(i)that is registered by another person; or
(ii)that is a protected international trade mark; or
(iii)in respect of which an application for registration, or an IRDA, has been made by another person; and
(c)the applicant:
(i)is awaiting the finalisation of proceedings in respect of the application for registration of the other trade mark or the IRDA; or
(ii)is seeking to satisfy the Registrar as to:
(A)a matter mentioned in paragraph 44(3)(a) or (b) of the Act or 4.15A(3)(a) or (b) of these Regulations; or
(B)the matters mentioned in subsection 44(4) of the Act or subregulation 4.15A(5);
in relation to the applicant’s trade mark and the other trade mark; or
(iii)has filed an application under section 92 of the Act or regulation 17A.48 in respect of the other trade mark and is awaiting the finalisation of proceedings in respect of that application; or
(iv)has begun proceedings to have the Register or the Record of International Registrations rectified in respect of the other trade mark and the proceedings have not been determined or otherwise disposed of; or
(v)is awaiting renewal of the registration of the other trade mark in the period of 6 months after registration of the other trade mark has expired, or removal of the other trade mark from the Register; or
(vi)is awaiting renewal of the international registration of the other trade mark in the period of 6 months after the international registration has expired, or removal of the other trade mark from the International Register.
(2)The Registrar may, on his or her own initiative, defer acceptance of the application within a period that is prescribed in subregulation 4.12(1) or that is extended under section 224 of the Act or subregulation 4.12(4), if:
(a)the time within which proceedings mentioned in paragraph (b) may be begun, or an application mentioned in paragraph (c) may be made, has not ended; or
(b)appeal proceedings under a provision of the Act have begun in a prescribed court in relation to the application; or
(c)an application has been made to the AAT for review of a decision of the Registrar in relation to the first‑mentioned application; or
(d)the Registrar is informed in writing that the applicant has died.
(3)The Registrar must defer acceptance of an application for registration of a certification trade mark when a copy of the rules governing the use of the certification trade mark is sent to the Commission in accordance with regulation 16.2.
(4)The Registrar must notify an applicant in writing:
(a)if the applicant requests the Registrar to defer acceptance of an application—of the Registrar’s decision to defer, or not to defer, acceptance of the application; and
(b)if the Registrar otherwise defers acceptance of an application—of the provision under which acceptance of the application is deferred.
[Stress added]
If I adopted the view urged upon me by the Opponent, that subsections 44(1) and 44(2) operate only at the filing date, the functions of section 36 and regulation 4.13 (as they pertain to applications made under section 92 of the Act to have unused and conflicting registrations removed from the Register) would be otiose. This is because those conflicting registrations will always have existed at the filing date of the application (which is deferred under the provisions of section 36 and regulation 4.13) while awaiting removal of the conflicting trade mark under the provisions of section 92. It would render the deferment of the applications and removal of the conflicting trade marks ineffective and leave the provisions of section 36 and regulation 4.13 without work to do in this regard.
Further, if a trade mark application is to be only considered as it was on the date that it was filed, what then does one make of sections 63 to 65 of the Act which provide, inter alia, for amendment of applications so as to remove any ground on which an application for registration could be rejected? If a trade mark application were to be only considered as at the date it was filed, no amount of amendment to the specification of goods or services could ever cure a ground for rejection under sections 41 or 44 of the Act.
The same logic would make any negotiation with the owner of a registered trade mark cited under the provisions of sections 44(1) and 44(2) ineffective because amendment of the specifications of goods/services of both the pending application and registered trade mark would not cure the inherent problem that at the filing date those particular trade marks conflicted: the result being that the later application would (when registered) always remain vulnerable under the provisions of section 88 of the Act.
Thus, in the application of the interpretation of subsections 44(1) and 44(2) suggested by the Opponent, hundreds, if not thousands, of trade mark registrations would become immediately vulnerable under the provisions of section 88 of the Act for all of the reasons discussed above.
It is more correct, in my view, to regard the filing date of an application as being the start point in considerations. These deliberations may change if, for example, the registration of an application is opposed under sections 44(3) or 44(4)/58A and one looks to the use of the impugned and/or a registered trade mark before the filing date of the impugned trade mark. Alternatively, the relevant consideration might be the intentions behind the filing of an application (as in sections 59 and 62A) in which cases one looks to the situation at the filing date.

Accordingly, in my consideration, subsections 44(1) and 44(2) must be read in conjunction with other provisions of the Act and Regulations (such as sections 63, regulation 4.13, and sections 63 to 65), which look to the operation of subsections 44(1) and 44(2) at the present time and in relation to the situation as it now pertains; As Hearing Officer Lyons more succinctly put it in Omega SA v Robinson[9], when considering this issue:
The facts are to be examined as they now stand. For the purposes of section 44(1) “a trade mark registered” means a trade mark presently registered. The [ceased] registrations no longer form a basis for objection under that section. In Gallo[10] … the Full Court’s finding was linked to the submission that Lion Nathan’s use infringed the trade mark whilst it remained registered. That finding has no bearing on the operation of section 44 as a ground for refusal of registration.
[9] (2012) 98 IPR 550 at [11].
[10] Op cit.
As subsections 44(1) and 44(2) are to be read in the present tense, and because the Opponent does not have a registered trade mark or a trade mark whose registration is being sought on which to base this ground, the ground under subsections 44(1) and (2) is not established.

Section 42

In its Statement of Grounds and Particulars the Opponent contends:
As part of the Opponent’s advertising and marketing activities the Opponent plans to use its novel and invented slogans THE SPIRIT OF CUBA LIBRE, EL ESPIRITU DE CUBA and EL ESPIRITU DE CUBA LIBRE in connection with its parent MATUSALEM trade mark. The Opponent intends to use the prior trade mark applications to refer to its Cuban antecedents’ [sic] and the “Golden Age” of Cuba before the Opponent’s Company and predecessor in business was expelled from Cuba due to Fidel Castro’s coup d’etat.
Use of the Trade Mark will be contrary to law because owing to the reputation the Opponent enjoys in the Opponent’s Trades [sic] Marks which are essential indicias [sic] of the Opponent’s MATUSALEM trade marks, use by the Applicant of the Trade Mark in relation to the goods covered by it would constitute misleading and deceptive conduct contrary to the Australian Consumer Law and passing off.
Moreover, use of the Trade Mark would be contrary to law owing to the reputation and intended use the Opponent has in the Opponent’s Trade Marks incorporating SPIRIT OF CUBA LIBRE, EL ESPIRITU DE CUBA and EL ESPRITU DE CUBA LIBRE which are all synonymous with the MATUSALEM trade mark.
Accordingly, the ground which is detailed by the Opponent is under paragraph 42(b) of the Act (contrary to law) and relies on both section 18 of the Australian Consumer Law and on passing off.
Section 42 of the Act relevantly provides:
42Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
[…]
(b)its use would be contrary to law.
Following the decision in Advantage Rent-A-Car Inc v Advantage Car Rental Pty Ltd[11] (‘Advantage’) delegates of the Registrar of Trade Marks have considered grounds under subparagraph 42(b) where use of an opposed trade mark is alleged to be contrary to laws other than the Act. In Advantage, Madgwick J stated at [28]:
I acknowledge the claim made by counsel for the Registrar that such an approach requires the Registrar to look at questions of law outside his or her expertise and that this can be difficult and may place a large and onerous responsibility upon the Registrar. However, the Registrar has the comfort that the criterion is that the use “would” not “could” be contrary to law. Further, there is no reason why the Registrar could not seek legal advice before forming his/her opinion. It should also be noted that what is required is that the Registrar form a view as to whether the use of a trade mark would be contrary to law. Such opinion does not have a similar effect to say, a judicial conclusion of law as to breach of copyright in copyright proceedings; the effect is limited to the refusal of registration. In any case, an appeal de novo lies from the Registrar’s decision to this Court where any error of the Registrar may be corrected. [Stress added]
[11] [2001] FCA 683; (2001) 52 IPR 24; [2001] AIPC 91-724.
The ground here is put in terms of section 18 of the Australian Consumer Law which is set out in Schedule 2 of the Competition and Consumer Act 2010:
A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
In Re Equity Access Pty Limited v Westpac Banking Corporation and Westpac Savings Bank Limited and Challenge Bank Limited [1989] FCA 506; 16 IPR 431 per Hill J at [41]:
1. For conduct to be misleading or deceptive the conduct must convey in all the circumstances of the case a misrepresentation: Taco Bell[12] at 202. In the present case the misrepresentation on the part of the respondents is said to be that the financial product advertised and marketed by each of them is the product of the applicant or that there is some business relationship between the applicant and each of the respondents or that the applicant has endorsed the respective product of the respondents.
2. There will however be no contravention of s.52(1) of the Act unless error or misconception results from the conduct of the corporation and not from other circumstances for which the corporation is not responsible: Puxu[13] per Gibbs CJ at p 6 and per Mason J at p 15, Global Sportsman Pty Ltd v. Mirror Newspapers Ltd [1984] FCA 180; (1984) 55 ALR 25, at p 34.
3. Conduct will be likely to mislead or deceive if there is a “real or not remote chance or possibility” of misleading or deception regardless of whether it is less or more than 50%: Global Sportsman at p 34. The question of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective question which the Court must determine for itself. Hence evidence that persons in the relevant class have been misled will, although admissible, not be determinative. In some cases however such evidence will be very persuasive: Puxu per Gibbs CJ at pp 198-9.
4. Conduct of a corporation causing mere confusion or uncertainty in the minds of the public in the sense that they may be caused to wonder whether two products may have come from the same source is not necessarily coextensive with misleading or deceptive conduct: Puxu at p 100; Bridge Stock Brokers v. Bridges [1984] FCA 391; (1984) 57 ALR 401 at p 413 per Lockhart J. Since actual deception need not be shown the Court must consider whether a reasonably significant number of potential purchasers would be likely to be misled or deceived: Weitmann v. Katies Ltd (1977) 29 FLR 336, 343. The test in passing off cases is usually expressed as being whether a “substantial number of persons likely to become purchasers ... are liable to be deceived by the defendant’s use of the name. On the other hand it is not necessary to show that all, or substantially all, persons in the market associate the name with the plaintiff’s goods, if this can be shown of a substantial proportion of persons who are probably purchasers of the goods of the kind in question.” (per Wilberforce J, as he then was, in Norman Kark Publications Ltd v. Odhams Press Ltd (1962) RPC 163 at 168 and see Saville Perfumery v. June Perfect Ltd (1941) 58 RPC 147 at 175-6, 10th Cantanae Pty Ltd v. Shoshana Pty Ltd (1987) 79 ALR 299 at 315 per Gummow J).
5. In a case such as the present the applicant must establish that it has acquired the relevant reputation in the name, that is to say that the name had become distinctive of the applicant’s business in a particular country or geographical area: Sheraton Corporation of America v. Sheraton Motels Ltd (1964) RPC 202; BM Auto Sales Pty Ltd v. Budget Rent A Car System Pty Ltd (1976) 12 ALR 363. However at least in some circumstances very slight activities may be found to be sufficient to establish that a name has become distinctive of a person’s business in a particular country: Miki Shoko Co Ltd v. Merv Brown Pty Ltd (1988) ATPR 40-858.
6. Section 52 is not confined to conduct which is intended to mislead or deceive: Puxu per Gibbs CJ at p 197 and a corporation which acts honestly and reasonably may none the less engage in conduct that is likely to mislead or deceive: Yorke v. Lucas [1985] HCA 65; (1985) 61 ALR 307 at p 309.
[12] Taco Company of Australia Inc v. Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177
[13] Parkdale Custom Built Furniture Pty Ltd v. Puxu Pty Ltd [1982] HCA 44; (1981-2) 149 CLR 191
It is essential, therefore, that the Opponent establish to the Registrar’s satisfaction that a trade mark upon which it relies had, at the relevant date, a reputation in Australia. However, in my consideration, the Opponent has failed to show that any of the trade marks on which it relies has a reputation in Australia at the relevant date. My understanding of the Opponent’s evidence is that its house-mark is MATUSALEM which has been used in a minor way somewhere in the world but where is not specified in its evidence; however, there is no evidence that the Opponent has used the trade marks SPIRIT OF CUBA LIBRE, EL ESPIRITU DE CUBA and EL ESPRITU DE CUBA LIBRE anywhere in the world. Indeed the Opponent’s Statement of Grounds and Particulars states that it relies on the intended use of those trade marks.
It follows that the ground under section 18 of the Australian Consumer Law cannot be established.
As regards passing off – this allegation to must fail for want of establishment of the reputation of the trade marks on which the Opponent relies. Hill J in Equity Access[14] addressed the relationship between section 52 of the TPA and passing off. His Honour considered that:
The scope for the operation of s 52 will thus be broader than that involved in the tort of passing off so that in a case such as the present where the claim is for the protection of the reputation in a name against the use of that name by another, failure to succeed under s 52 or s 53 will invariably mean that proceedings for passing off would likewise fail.
[14] Op cit at [40].
At the hearing of the matter the Opponent also argued that the use of the Trade Mark would mislead or deceive if the goods in question did not originate in Cuba. While Mr Hallett responded to these submissions, this was not a ground detailed in the Opponent’s Statement of Grounds and Particulars; nor was there an application from the Opponent to amend its Statement of Grounds and Particulars. Accordingly, that is the end of the matter.
That said, I observe briefly that to found this ground the Opponent points to the refusal of its own applications for the registration on the basis that there was evidence that the Opponent’s goods did not originate in Cuba and that, to all intents, the trade marks SPIRIT OF CUBA LIBRE, EL ESPIRITU DE CUBA and EL ESPRITU DE CUBA LIBRE on rum would be seen as denoting ‘spirits made in Cuba’ and thus both misleading and deceptive.
Here, however, the Holder states that its rum is made in Cuba (and if this is otherwise this has not been established by the Opponent). As discussed below, the expressions ‘Havana Club’ and ‘Essence of Cuba’, when considered together, are somewhat nebulous, indirect or allusive in whatever meaning they might convey (particularly when considered alongside the more direct expressions ‘Spirit of Cuba’ and ‘Spirit of Free Cuba’). As observed by Madwick J in Advantage, I have the comfort that the criterion is that the use ‘would’ not ‘could’ be contrary to law. Had the ground been properly particularised, I would have been of the view that the Registrar could not have been satisfied by the Opponent’s evidence that the use of the Trade Mark ‘would’ be contrary to law.
The Opponent has not established its ground under section 42 of the Act.

Section 61

Section 61 of the Act provides:
61Trade mark containing or consisting of a false geographical indication
(1)The registration of a trade mark in respect of particular goods (relevant goods) may be opposed on the ground that the trade mark contains or consists of a sign that is a geographical indication for goods (designated goods) originating in:
(a)a country, or in a region or locality in a country, other than the country in which the relevant goods originated; or
(b)a region or locality in the country in which the relevant goods originated other than the region or locality in which the relevant goods originated;
if the relevant goods are similar to the designated goods or the use of a trade mark in respect of the relevant goods would be likely to deceive or cause confusion.
(2)An opposition on a ground referred to in subsection (1) fails if the applicant establishes that:
(a)the relevant goods originated in the country, region or locality identified by the geographical indication; or
(aa)the sign is not recognised as a geographical indication for the designated goods in the country in which the designated goods originated; or
(b)the sign has ceased to be used as a geographical indication for the designated goods in the country in which the designated goods originated; or
(c)the applicant, or a predecessor in title of the applicant, used the sign in good faith in respect of the relevant goods, or applied in good faith for the registration of the trade mark in respect of the relevant goods, before:
(i)1 January 1996; or
(ii)the day on which the sign was recognised as a geographical indication for the designated goods in their country of origin;
whichever is the later; or
(d)if the registration of the trade mark is being sought in respect of wine or spirits (relevant wine or spirits)—the sign is identical with the name that, on 1 January 1995, was, in the country in which the relevant wine or spirits originated, the customary name of a variety of grapes used in the production of the relevant wine or spirits.
(3)An opposition on a ground referred to in subsection (1) also fails if the applicant establishes that:
(a)although the sign is a geographical indication for the designated goods, it is also a geographical indication for the relevant goods; and
(b)the applicant has not used, and does not intend to use, the trade mark in relation to the relevant goods in a way that is likely to deceive or confuse members of the public as to the origin of the relevant goods.
(4)An opposition on a ground referred to in subsection (1) also fails if the applicant establishes that:
(a)the sign consists of a word or term that is a geographical indication; and
(b)the word or term is a common English word or term; and
(c)the applicant has not used, and does not intend to use, the trade mark in relation to the relevant goods in a way that is likely to deceive or confuse members of the public as to the origin of the relevant goods.
Note 1:For applicant, predecessor in title and geographical indication see section 6.
Note 2:For originate (in relation to wine only) see section 15.
Section 6 of the Act defines the words ‘geographical indication’:
geographical indication, in relation to goods, means a sign that identifies the goods as originating in a country, or in a region or locality in that country, where a given quality, reputation or other characteristic of the goods is essentially attributable to their geographical origin.
The nub of the Opponent’s argument is that I should bear in mind that the Opponent’s goods (bitters or flavouring which contain Cuban rum) originate in Germany and:
… it has recently been held as per Hearing Officer Irgang in Havana Club Holding SA and Corporacion Cuba Ron S.A. v 1872 Holdings, V.O.F. [2016] ATMO 37 [‘Havana’] at paragraph 35 that “CUBA is a geographical indication for rum” which are goods identical or similar to those covered by the Opposed Mark. It is likewise apparent that the Applicant’s Goods are not manufactured in Cuba, but are manufactured in Germany and originate from Germany.
[…]
“the applicant has applied for ... a plain text trade mark which prominently feature(s) the geographical indication CUBA, and [the Delegate] is satisfied that it is likely that an Australian consumer faced with the opposed trade mark(s) is likely to believe that the origin of the goods is Cuba”.
Here I am at a disadvantage because the evidence concerning the Cuban regulations which were before the Registrar’s delegate in Havana are not before me. Further the delegate in Havana made her decision in relation to the word ‘Cuba’ used in the context of the expression (both in Spanish and English) ‘Spirit of Cuba’.
It is important, I consider, to assess the context in which the word ‘Cuba’ is used within the Trade Mark. Because a geographical word appears within an expression (or a trade mark) does not mean that the expression (or trade mark), considered as a whole, would be taken to be an indication of origin. The use of the word ‘Cuba’ within the Trade Mark is as a part of the expression ‘Essence of Cuba’ and occurs after the words ‘Havana Club’. By analogy with ‘descriptive’ trade marks I note that in Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd[15] Beach J stated:
[15] [2016] FCA 235; (2016) 118 IPR 239 at [213]-[220].
There is a continuum of distinctiveness, from highly descriptive trade marks to highly distinctive trade marks. This continuum has been described in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 259; (1993) 26 IPR 261 at 269 quoting Hill J in Equity Access Pty Ltd v Westpac Banking Corporation [1989] FCA 506; (1989) 16 IPR 431 at 448 in the following terms:
Just as the distinction between descriptive and fancy names is not a distinction of law so too it is wrong to see the distinction in black and white terms. The reality is that there is a continuum with at the extremes purely descriptive names at the one end, completely invented names at the other and in between names that contain ordinary English words that are in some way or other at least partly descriptive. The further along the continuum towards the fancy name one goes, the easier it will be for a plaintiff to establish that the words used are descriptive of the plaintiff’s business. The closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if the name admits of this — a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion.
Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48; (2014) 254 CLR 337 at [59] per French CJ, Hayne, Crennan and Kiefel JJ made a distinction between a trade mark that:
(a) contains a “direct reference” to the relevant goods (prima facie not registrable); or
(b) makes a “covert and skilful allusion” to the relevant goods (prima facie registrable).
The Court, although addressing the issue of trade marks comprising foreign words, gave as examples of words that are inherently adapted to distinguish words which “in relation to the goods are allusive or metaphorical” (at [59]).
A wholly invented word — a common example is Kodak — will clearly be inherently adapted to distinguish. An invented word that is not wholly meaningless, but which contains a “covert and skilful allusion to the character or quality of the goods” may be registrable (Cantarella at [47] quoting from Dixon J’s judgment in Howard Auto-Cultivators Ltd v Webb Industries Pty Ltd [1946] HCA 15; (1946) 72 CLR 175 at 181).
At the other end of the continuum are words that make a “direct reference” to the relevant goods and which are prima facie not inherently adapted to distinguish (Cantarella at [59]).
The Respondents rely on Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; (2002) 122 FCR 494 and the discussion regarding absence of associations in shape trade marks. But Kenman does not change the position as set down in Cantarella.
In Mark Foy’s Ltd v Davies Coop & Co Ltd [1956] HCA 41; (1956) 95 CLR 190, consideration was given to the registrability of the words “ Tub Happy “. It was held that the words “Tub Happy” did not refer to a quality of the fabric in question and that it was a mistake to assume that the words convey a meaning and then seek to institute a search for that meaning.
It is necessary to consider the trade mark as a whole, rather than its constituent parts, and then assess whether there is a direct reference to the character or quality of the goods.

The Opponent’s position here is that because the word ‘Cuba’ appears in its trade marks which were refused registration as a geographical indication that it must follow that, because the word ‘Cuba’ also appears in the Trade Mark, the word ‘Cuba’ must also there be taken to be a geographical indication. I consider that is not necessarily so.
I consider that the correct approach is to consider the Trade Mark as a whole and ask what it is likely to denote to Australians. Here the Trade Mark is comprised of two expressions, firstly the words ‘Havana Club’ and secondly the expression ‘Essence of Cuba’. While it is likely that an Australian seeing the words ‘Matusalem Spirit of Cuba’ on a bottle of rum would understand the expression ‘Spirit of Cuba’ to refer to the spirituous liquors within the bottle as deriving from Cuba, I am not satisfied that an Australian seeing the expressions ‘Havana Club Essence of Cuba’ would be likely to reach the same conclusion.
I further observe that the Opponent has asserted that the words ‘essence’ and ‘spirit’ have the same meaning and that therefore the same considerations should apply. While the Opponent has provided no evidence of the similar meanings of the words ‘essence’ and ‘spirit’, I note the words of Dixon J in Howard Auto-Cultivators Limited v Webb Industries Proprietary Limited[16]:
But the meaning of all words is governed by their context and how words are understood depends upon the universe of discourse. Here the scope of the use of the word is settled by the application for registration, …
[16] [1946] HCA 15; (1946) 72 CLR 175 at p 195.
Here, the meanings of the words ‘essence’ and ‘spirit’ is settled by their dictionary definitions and the context of the parties’ trade marks used in relation to ‘rum’ or other spirituous liquors.
The meaning of the word ‘essence’ is given in the Macquarie Dictionary:
1. intrinsic nature; important elements or features of a thing.
2. a substance obtained from a plant, drug, or the like, by distillation or other process, and containing its characteristic properties in concentrated form.
3. an alcoholic solution of an essential oil.
4. a perfume.
5. Philosophy the inward nature, true substance, or constitution of anything.
6. something that is, especially a spiritual or immaterial entity.
–phrase 7. of the essence, necessary for what needs to be done.
The Macquarie Dictionary provides the following definition of the word ‘spirit’:
noun 1. the principle of conscious life, originally identified with the breath; the vital principle in humans, animating the body or mediating between body and soul.
2. the incorporeal part of a human being: present in spirit though absent in body.
3. the soul as separable from the body at death.
4. conscious, incorporeal being, as opposed to matter: the world of spirit.
5. a supernatural, incorporeal being, especially one inhabiting a place or thing or having a particular character: evil spirits.
6. a fairy, sprite, or elf.
7. an angel or demon.
8. an inspiring or animating principle such as pervades and tempers thought, feeling, or action: a spirit of reform.
9. (upper case) the divine influence as an agency working in the heart of humans.
10. (in biblical use) a divine inspiring or animating being or influence.
11. the soul or heart as the seat of feelings or sentiments, or as prompting to action: to break a person’s spirit.
12. fine or brave vigour or liveliness; mettle.
13. temper or disposition: meek in spirit.
14. a person characterised according to character, disposition, action, etc.
15. mental or moral attitude; mood: take something in the right spirit.
16. the dominant tendency or character of anything: the spirit of the age.
17. vigorous sense of membership in a group: team spirit.
18. the true or general meaning or intent of a statement, etc. (opposed to letter).
19. Chemistry
a. an aqueous solution of ethyl alcohol, especially one obtained by distillation.
b. the essence or active principle of a substance as extracted in liquid form, especially by distillation.
20. a strong distilled alcoholic liquor: a raw spirit.
21. Pharmaceutical a solution in alcohol of an essential or volatile principle.
22. any of certain subtle fluids formerly supposed to permeate the body.
–adjective 23. relating to something which works by burning alcoholic spirits.
24. of or relating to spiritualist bodies or activities.
–verb (t) 25. Obsolete to animate with fresh ardour or courage; inspirit.
–phrase 26. spirit away (or off), to carry away, mysteriously or secretly.
[Middle English, from Latin spīritus breathing]
For the sake of completeness, I note that Google® Translate gives the English meanings of the Spanish word ‘espiritu’ as:
spirit
espíritu, alcohol, alma, licor, brío, temple
mind
mente, espíritu, opinión, ánimo, mentalidad, parecer
spirits
espíritu, humor
soul
alma, soul, espíritu, ánimo
ghost
fantasma, espíritu, espectro, espanto, imagen
esprit
espíritu
liquor
espíritu, licor espiritoso
Here, in the context of goods which are rum, it is obvious that the words ‘Spirit of Cuba’ (and their Spanish equivalent) identify the goods as being spirituous liquors having their origin in Cuba which has a reputation for ‘rum’. In the same context (and in the light of the various definitions of the word ‘essence’ within the Macquarie Dictionary) the expression ‘Essence of Cuba’ does not appear to be amenable to the same understanding.
The expression ‘Essence of Cuba’ thus appears to me to be somewhat indefinite in its denotation. In terms of the definition of ‘geographical origin’, I am not satisfied that the Trade Mark identifies the goods as originating in a country, or in a region or locality in that country, where a given quality, reputation or other characteristic of the goods is essentially attributable to their geographical origin.
I further note that the Holder has stated that the goods of interest to it contain Cuban rum. The evidence shows that the goods are various ‘bitters’ that are used to make alcoholic drinks and these various bitters contain Cuban rum. The Holder, had it been necessary, has established a defence under subsection 61(2) of the Act.
The Opponent has not established its opposition under section 61 of the Act.

Section 62A

In its Statement of Grounds and Particulars the Opponent contends:
The Opponent notes that two of the essential word elements incorporated in its prior marks, namely, ESPIRITU, when translated from Spanish language can only relate to the “essence” of Cuba or the "flavour" of Cuba.
At the time of adopting the trade mark and filing the application, the Applicant had full knowledge of the Opponent's trade marks which are already the subject of several oppositions filed by the Applicant against the Opponent and the association between the indicia ESPIRITU and SPIRIT with the Opponent's parent MATUSALEM trade mark.
The Opponent has applied for the Trade Mark to gain a benefit by suggesting an association or connection with the Opponent's prior trade mark applications. The making of the application prima facie indicates bad faith.
Section 62A provides:
62AApplication made in bad faith
The registration of a trade mark may be opposed on the ground that the application was made in bad faith.
The Registrar’s delegate, Mr Kirov, summarised the considerations to be applied to the consideration of this ground in the following way[17]:
[17] NSW Squash Ltd v Carin Clonda [2012] ATMO 71.
There have been two Federal Court decisions that substantively consider the section: Fry Consulting v Sports Warehouse Inc (No 2)[18] (Dodds-Streeton J) [“Fry Consulting”] and DC Comics v Cheqout Pty Ltd (Bennett J) [“DC Comics”][19].
[18] [2012] FCA 81; (2012) 94 IPR 551.
[19] [2013] FCA 478; (2013) 101 IPR 334.
The following propositions emerge from each of these two decisions relevant to the present oppositions:
(a) Bad faith for the purposes of s 62A must be [as at the relevant date] and must relate to the making of the subject of each of the applications: Fry Consulting at [145].
(b) Section 62A does not require the opponent to establish that the trade mark’s use would result in deception or confusion. However, evidence to that effect may be persuasive in considering whether the application to register a mark was in bad faith : DC Comics at [76].
(c) The onus of proving bad faith rests upon the opponent: Fry Consulting at [145].
(d) All of the circumstances surrounding the application to register the mark are relevant: DC Comics at [62].
(e) The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading: DC Comics at [62].
(f) While the seriousness of an allegation of bad faith that “impugns the character of an individual or collective character of a business” requires correspondingly cogent evidence, the standard of proof is the balance of probabilities, rather than that of beyond reasonable doubt: Fry Consulting at [145].
(g) Conduct which falls “short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area” is sufficient. Dishonesty is not required. Bad faith requires both subjective and objective elements; it is a combined test: Fry Consulting, at [147] and [148] [and [165]].
(h) Circumstances where, following prolonged competition between the parties, there is a subsequent application to register a series of nearly identical trade marks can amount to conduct such that a reasonable person standing in the shoes of the applicant would have been aware that it ought not apply for trade mark registration: Fry Consulting at [152].
(i) Subjective naivety does not exclude a determination of bad faith for the purposes of s 62A: Fry Consulting at [154]-[155].
(j) A prior business connection with and knowledge of the opponent by the applicant such that a person standing in the shoes of the applicant should have known that he should not have applied for a trade mark deceptively similar to that used by the opponent is sufficient for a finding of bad faith: Fry Consulting at [156].
(k) An act of bad faith cannot be cured by an action after the date of the application: DC Comics at [62].
(l) Use of a trade mark together with other indicia associated with the trade mark owner may lead to an inference of bad faith: DC Comics at [73].
It follows from the above that mere knowledge before the relevant date of another person’s trade marks, without more, does not in itself constitute the basis for a finding of bad faith.
As observed by the Registrar’s delegate in Pritchard Pacific Pty Ltd Baltimore Aircoil (Australia) Pty Ltd v Brendon McCarrison and Breezewater Pty Ltd[20] at [42]:
Knowledge of the applicant’s business and the existence of a prior relationship are not sufficient by themselves to ground a finding of bad faith.
[20] [2011] ATMO 46 at [42].
Further, while the Opponent submits that the Holder’s opposition to the registration of the Opponent’s (now refused) trade marks is the ‘smoking gun’ in relation to this ground, it is apparent that the Holder opposed the registration of the Opponent’s trade marks only because of the Holder’s perceptions of the similarity of the Opponent’s trade marks to the Holder’s trade marks.
The Opponent has not established its ground under section 62A of the Act.

Decision

Regulation 17A.34N provides:
17A.34NDecision on opposition
(1)Unless the opposition proceedings are discontinued or dismissed, the Registrar must decide:
(a)to refuse protection in respect of all of the goods or services listed in the IRDA; or
(b)to extend protection in respect of some or all of the goods or services listed in the IRDA (with or without conditions or limitations);
having regard to the extent (if any) to which the grounds on which the IRDA was opposed have been established.
(2)The Registrar must notify the International Bureau of the Registrar’s decision.
The Opponent has not established the grounds on which the IRDA was opposed and it is appropriate that the Registrar decides to extend protection to the Trade Mark.
The IRDA may then proceed to protection one month from the date of this decision. If the Registrar has been served with a notice of appeal before that time, I direct that protection shall not occur until the appeal has been decided or discontinued and the disposition of the IRDA be in accordance with the Court’s order or direction.

Costs

As the Holder has been the successful party, it is appropriate that the Registrar award costs against the Opponent at the scale set out in Schedule 8 to the Regulations.

Iain Thompson
Hearing Officer
Trade Marks Hearings
21 February 2017