24 Hour Fitness, Inc

[2001] ATMO 121

TRADE MARKS ACT 1995

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

Re:Trade mark application number 788963(18, 25, 41) - 24 HOUR FITNESS - in the name of 24 Hour Fitness, Inc.

Background

On 19 March 1999, 24 Hour Fitness, Inc., a company incorporated in the State of California, applied for the trade mark 24 Hour Fitness in classes 18, 25 and 41. At the examination stage, initial objections were raised in relation to all classes. However, the objections to the class 18 and 25 goods were later withdrawn. In due course, the Trade Marks Office (TMO) maintained an objection under s.41 of the Trade Marks Act 1995 in relation to the class 41 services.  These services are described in the application as follows:

Health club services and instruction in the field of health and physical exercise

Primarily, the TMO objected to the application on the basis that the trade mark - 24 Hour Fitness - lacked the necessary inherent adaptation to distinguish required by s.41. Specifically, the trade mark, when applied to the services in question, is one that other traders are likely, without improper motive, to need to use in relation to their own services. Further, in the absence of the requisite inherent adaptation, the applicant had also failed to provide sufficient evidence of use to warrant the application of s.41(5) or (6).

As a result, the applicant was invited to request, and was subsequently granted, a hearing.  The matter came before me for hearing on 22 October 2001 in Sydney.  The applicant was represented by Mr Skelly.

Evidence

The applicant relies on a statutory declaration by Anthony J Bakos, the Senior Vice President and General Counsel of the applicant, dated 23 May 2001.  By way of summary, Mr Bakos sets out the history of the applicant, its past trade mark usage, various trade mark registrations, advertising methods and expenditure in the United States and revenue generated in the United States in the period 1995-2000.

Mr Bakos also states that the applicant embarked upon an expansion program in early 1999, which has resulted in the acquisition and operation of health clubs in "many areas of Europe and Asia".  There has however, been no expansion into Australia, to date.

It is important to note at this point that the applicant has already successfully registered the trade mark:

791893

Mr Bakos, when providing information about trade mark usage and advertising expenditure, did not differentiate between the applied-for mark and the graphical mark set out above.  The advertising and press exhibits do however, contain a mix of the use of the word mark and the graphical mark.  However, it is also fair to say that, with the exception of newspaper articles, the words 24 Hour Fitness are always accompanied by the graphical mark.

The Legislation

Section 41 reads:

41  Trade mark not distinguishing applicant’s goods or services

(1)For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

Note 1:For applicant and predecessor in title see section 6.

Note 2:If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

(2)An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

Note:For goods of a person and services of a person see section 6.

(3)In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.

(4)Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5)If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a)the Registrar is to consider whether, because of the combined effect of the following:

(i)the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

(ii)the use, or intended use, of the trade mark by the applicant;

(iii)any other circumstances;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b)if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and

(c)if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.

Note 1:For goods of a person and services of a person see section 6.

Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

(6)If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a)if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b)in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

Note 1:Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a)  the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

(b)  the time of production of goods or of the rendering of services.

Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

When discussing s.41 in Blount v Registrar of Trade Marks (1998) 40 IPR 498, 504-505, Justice Branson observed that the Registrar is entitled to find:

(a)that the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons and is capable, on that basis alone, of distinguishing the designated goods or services; or

(b)that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; or

(c)that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, but there is uncertainty, on that basis alone, that the trade mark is actually capable of distinguishing the designated goods or services.

Each of these findings will result in a different consequence.  If the Registrar reaches conclusion (a), he must accept the application in accordance with subsection 33(1) of the Act.  If the Registrar reaches conclusion (b), the provisions of paragraphs (a) and (b) of subsection 41(6) apply.  Finally, if the Registrar reaches conclusion (c), the provisions of paragraphs (a), (b) and (c) of subsection 41(5) apply.

Applying these tests, and taking each step in turn, I must first determine whether the applied-for trade mark is inherently adapted to distinguish the goods of the applicant from those of other traders.  This requires me to determine whether the words "24 hour fitness" have their own inherent ability to set the services of the applicant apart from those of other traders.  Further, I must determine whether the words "24 hour fitness" are words that other traders of similar services are unlikely to wish to use in relation to their services - per Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 514.

When the applied-for services are taken into account, it is clear that the words are descriptive of fitness centres which are open 24 hours a day.  This is confirmed by the applicant's documentary evidence. Even if a different interpretation was applied - for instance - "if you use our facilities, you will be fit all the time" or "we provide the facilities to enable you tackle all the tasks of daily life" - these interpretations remain descriptive.  Accordingly, they fall foul of the "direct description" tests set down in cases such as Registrar of Trade Marks v Muller (1980) 31 ALR 177 and Burger King Corp. v Registrar of Trade Marks (1973) 128 CLR 417. Further, they are all expressions that other traders in fitness services are likely to want or need to use without improper motive. This is particularly true if other traders open fitness facilities which are open 24 hours or wish to advertise their ability to assist patrons to achieve "whole of life fitness".

The second issue in relation to the mark is, as Mr Skelly submitted, whether its actual composition as a "contracted" expression renders it with some inherent ability to distinguish.  The words do not form the complete phrase that one would normally expect - for example "24 Hour Fitness Centre", "24 Hour Fitness Gym", or "24 Hour Fitness Club".  Therefore, Mr Skelly submits, other traders are not likely to need to use the applied-for phrase. While I accept Mr Skelly's general point, I do not believe that it goes far enough or recognises commercial reality. Presuming that the applicant is successful in its application and is granted a registration for 24 Hour Fitness, the registration grants a potentially perpetual, enforceable, exclusive right to use those words in the relevant classes. Even if the words were only used in one of the longer phrases to which I have already referred, other traders would, perhaps inadvertently, be using the trade mark of the applicant. At worst, this would leave them open to infringement or passing off actions. At best, they would be providing free advertising to the applicant. Either consequence would unfairly impinge on other traders' rights to use words that are ordinarily descriptive of their services and are exactly the consequences that s.41 seeks to avoid.

Finally, Mr Skelly submitted that it is unlikely that other traders would wish to use the phrase as it is unlikely that other gyms would open 24 hours a day.  With respect, this is not the test and is, in any event factually incorrect.  From my own experience, I am aware of at least one 24 hour gym in Melbourne.  I suspect that are others.  Even if there were not, it is not unreasonable to expect that 24 hour gyms will open in the future.  These traders should not be unfairly restricted in advertising their services by reason of the registration of the applied for trade mark.  Similarly, I am not satisfied that Mr Skelly is correct in asserting that because the applicant has obtained registration for the graphical mark, that other traders who used the expression "24 hour fitness" to describe their services would be doing so with improper motive or in an infringing manner.  If the applicant chooses to take a common phrase as the basis of its graphical mark, it runs the risk that others will use the words to describe their services.  That is what has occurred in the present case.

Accordingly, I am not satisfied that the applied-for trade mark has any inherent capacity to distinguish. 

Given this, I must now determine whether the provisions of s.41(6) apply. Section 41(6) reads:

(6)If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a)if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b)in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

The applicant has provided evidence of use of the trade mark overseas.  By its own admission, the trade mark has not been used in Australia.  While Mr Skelly pointed to evidence which showed extensive advertising, internet presence and some sponsorship in the United States, this is not enough to satisfy me that the applicant's trade mark is known to Australian consumers to the extent that the applicant's services advertised under the applied-for trade mark are distinguished in consumer's minds.  While the comments of judges such as Lockhart J ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 23 IPR 193 per Lockhart J at 233-4, are helpful in determining whether reputation may have spread from overseas due to advances in technology, His Honour's full comments must be taken into account. Most importantly, he confirms that the relevant party must provide some evidence that the reputation has in fact spread - it is insufficient to merely point to the means by which the reputation might spread without also showing that consumers have actually been exposed to the relevant goods or services, and that the reputation has made its way into the relevant jurisdiction. Justice Lockhart's comments were as follows:

The real question is whether the owner of the goods has established a sufficient reputation with respect to his goods within the particular country ... This is essentially a question of fact.

... it is still necessary for a plaintiff to establish that his goods have the requisite reputation in the particular jurisdiction ...  reputation within the jurisdiction may be proved by a variety of means including advertisements on television, or radio or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum, and that people within the forum (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner (see for example & A Modes, Orkin and Midas).

Accordingly, it is incumbent upon the applicant to provide evidence which shows that the applied-for trade mark is known in Australia and is associated with its services in the minds of Australian consumers.  Without such evidence, the applicant cannot establish that the trade mark has become distinguished by prior overseas use.  There is no such evidence before me.

Finally, there is no evidence before me that the applied-for trade mark has ever been used by the applicant on its own.  In the advertising material annexed to the declaration of Mr Bakos, the applied-for trade mark is always used in conjunction with the graphical mark.  In many examples, the applied-for trade mark is located only in the "commentary" or "terms and conditions" portion of advertisements.  Frequently, the words appear not as a trade mark at all, but merely as the name of the applicant "24 Hours Fitness" or to identify the applicant's website 24hourfitness.com (see for instance, the advertisements included in Exhibit JB-3). Such use, particularly when it plays a secondary role behind the graphical mark, does not assist the applicant in satisfying s.41(6).

As a consequence, and in the absence of any other evidence, I am not satisfied that the elements of s.41(6) are made out.

If I were wrong, and the trade mark did have some inherent capacity to distinguish, s.41(5) would come into play. However, for the reasons set out below, I would still not be satisfied that the grounds had been made out.

Section 41(5) reads:

(5)If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a)the Registrar is to consider whether, because of the combined effect of the following:

(i)the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

(ii)the use, or intended use, of the trade mark by the applicant;

(iii)any other circumstances;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b)if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and

(c)if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.

In relation to considerations (ii) and (iii) in s.41(5)(a), I note there is no evidence of use in Australia to date and, while the applicant has provided declaratory evidence that it intends to expand into Australia, there is no documentary evidence to support this. Such documentary evidence might establish that legal advice has been commissioned to investigate the regulatory requirements of Australia, marketing plans have been compiled or market surveys undertaken to determine the viability of the proposed venture. There is no such material before me and I am not satisfied that there is in fact any firm and fixed intention to ever move into the Australian market.

The applicant also referred me to successful registrations in five other countries - the United States, Canada, Singapore, Chile and Japan.  This might be a relevant consideration in terms of s.51(5)(a)(iii).  However, the applicant failed to provide any evidence which indicated the basis on which these registrations were allowed.  There is nothing before me to indicate that the relevant applications were not accepted on the basis of past or proposed use of the trade mark in the relevant jurisdiction.  Similarly, merely presenting a list of countries in which registration has been allowed, without also providing a list of all the countries in which applications have been made, together with an indication of whether they are currently under examination or have been rejected, is unsatisfactory.  I am not prepared to give such potentially incomplete evidence any great weight at all.

For these reasons, I am not satisfied that the trade mark does or will distinguish the applicant's services to the requisite degree and therefore, s.41(5)(b) has not been made out.

Conclusion

I am not satisfied that any of the grounds of s.41 have been made out by the applicant. I see no reason to allow the application in so far as it relates to the class 41 services.

Accordingly, and subject to the expiry of the relevant appeal period and the payment of all necessary fees, I direct that the application may proceed to registration in relation to classes 18 and 25 only.  The application may not proceed to registration in relation to class 41.

Geoffrey Purvis-Smith

Hearings Officer

Trade Marks Hearings

10 December 2001