Active Skin Pty Ltd v Yey Pty Ltd

Link copied
Case Copied 83 min read

Federal Circuit and Family Court of Australia

(DIVISION 2)

Active Skin Pty Ltd v Yey Pty Ltd [2022] FedCFamC2G 865

File number(s): SYG 1636 of 2019
Judgment of: JUDGE BAIRD
Date of judgment: 25 October 2022
Catchwords: INTELLECTUAL PROPERTY – TRADE MARKS – appeal from decision of a Delegate of the Registrar of Trade Marks refusing registration of trade marks – where Delegate upheld respondent’s opposition to applicant’s trade marks registration for cosmetics and certain distribution services under s 60 of the Trade Marks Act 1995 (Cth) – ss 60 and 42(b) of the Act grounds of opposition –similar trade marks – whether reputation in respondent’s trade mark established – online retailing services for cosmetics – whether similar goods and/or services – whether use of trade marks likely to deceive or cause confusion – likelihood of misleading or deception – whether use of trade marks contrary to law –appeal dismissed
Legislation:

Competition and Consumer Act 2010 (Cth) Schedule 2, ss 18, 29

Trade Marks Act 1995 (Cth) ss 12, 42, 55, 56, 60, 197

Trade Marks Amendment Act 2006 (Cth)
Cases cited:

Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 124 IPR 264; [2017] FCAFC 56

Apple Inc v Registrar of Trade Marks (2014) 227 FCR 511; (2014) 109 IPR 187; [2014] FCA 1304

Australian Competition and Consumer Commission v TPG Internet Pty Ltd  (2020) 381 ALR 507; [2020] FCAFC 130

Bauer Consumer Media Ltd v Evergreen Television Pty Ltd (2019) 142 IPR 1; (2019) 367 ALR 393; [2019] FCAFC 71

Berlei Hestia Industries Ltd v Bali Co Inc (1973) 129 CLR 353

Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397; [2007] FCAFC 70

Chris and Dora Di Lorenzo Partnership v Denversian Pty Ltd [2020] FCCA 1718

ConAgra Inc. v McCain Foods (Australia) Pty Ltd (1992) 33 FCR 302

Food Channel Network Pty Ltd v Television Food Network GP (2010) 185 FCR 9; (2010) 86 IPR 437; [2010] FCAFC 58

Gain Capital UK Ltd v Citigroup Inc (No 4) (2017) 123 IPR 234; [2017] FCA 519

Jafferjee v Scarlett (1937) 57 CLR 115; [1937] ALR 404

Le Cordon Bleu BV v Cordon Bleu International Ltee (2000) 51 IPR 1; [2000] FCA 1587

McCormick & Co Inc (2000) 51 IPR 102; [2000] FCA 1335

Monster Energy Company v Mixi Inc (2020) 156 IPR 378; [2020] FCA 1398

Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR379; [2017] FCAFC 83

Primary Health Care Limited v Commonwealth of Australia (2017) 260 FCR 359; [2017] FCAFC 174

Qantas Airways Limited v Edwards (2016) 228 ALR 134; [2016] FCA 729

Quintis Ltd (subject to Deed of Company Arrangement) (ACN 092 200 854) & Ors v Certain Underwriters at Lloyd’s LondonSubscribing to Policy Number B0507N16FA15350 & Ors [2021] FCA 19

Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365

Rodney Jane Racing…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Active Skin Pty Ltd v Yey Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2022] FedCFamC2G 865
Decision Date

CaseChat Overview and Summary

The case of Active Skin Pty Ltd v Yey Pty Ltd involved a dispute over the registration of trade marks by Active Skin Pty Ltd, which was opposed by Yey Pty Ltd. The opposition was based on grounds under sections 60 and 42(b) of the Trade Marks Act 1995 (Cth). Yey argued that the registration of Active Skin's trade marks would likely deceive or cause confusion among consumers, and that the use of the marks would contravene the Australian Consumer Law (ACL) by being misleading or deceptive. The court had to determine whether Yey had successfully established these grounds of opposition.

The court examined the history and reputation of Yey’s trade marks, as well as the limited market presence of Active Skin at the relevant times. Yey presented evidence of its established business and significant online presence, while Active Skin's operations were limited to home-based activities with minimal sales and distribution. The court concluded that Yey had a substantial reputation in its trade marks, which made it likely that the registration of Active Skin’s marks would cause confusion among consumers. Additionally, the court found that the use of Active Skin’s marks would likely mislead consumers, thus contravening the ACL.

Based on these findings, the court upheld the opposition under section 60 of the Trade Marks Act, finding that Yey had demonstrated a significant reputation in its trade marks. The opposition under section 42(b) was also upheld, as the court was satisfied that the registration of Active Skin’s marks would likely mislead or deceive consumers. Consequently, the court ruled in favour of Yey, opposing the registration of Active Skin’s trade marks.

The final orders of the court would likely reflect the decisions made, potentially preventing the registration of Active Skin’s marks and upholding Yey’s opposition.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

So too, the fact that both parties have existing Australian trade mark registrations does not bear upon whether the Active Skin Applications ought to proceed to registration; the issue for determination before me is whether Yey establishes either of the grounds of opposition it presses under ss 60 and 42(b) of the TM Act in respect of those Applications. Active Skin’s submissions to the contrary are misconceived and must be rejected: see further the legal principles discussed below.Hearing and evidence on the appeal I heard the appeal in person at the Court in Sydney on 8, 9 and 10 February 2021. Each party called evidence from a representative of the party, and from their lawyer. A number of documents were tendered separately. Yey read and relies on the affidavits of Mr Ben Wyeth, affirmed 13 March 2020, and of Mr Cameron Lang, affirmed 17 March 2020:(a)Mr Wyeth is a director of the holding company for Yey, and has been the general manager of Yey’s online retailing arm of Yey’s business since 2004. He is responsible for the day-to-day operations of the online retailing arm, including management of the marketing, graphic designs and accounts teams. Mr Wyeth gives evidence of the history of Yey’s business and its provision of online retail, salon retail and beauty services using the Yey trade marks; (b)Mr Lang is a solicitor at Actuate IP, the legal representative for Yey. His evidence sets out the examination and opposition history of the Active Skin Applications, and the results of various website and online searches he conducted, including via the Internet Archive Wayback Machine, for Yey’s website. Active Skin read and relies on the affidavits of Mrs Kim Marie Smith, affirmed 22 May 2020; and of Mr Peter Whitehead, affirmed 22 May 2020: (a)Mrs Smith is a director and the company secretary of Active Skin, and has been since it was incorporated in 2006. Mrs Smith is responsible for Active Skin’s business - the products it manufactures and sells, third party products it distributes, its advertising and marketing activities. Mrs Smith gives evidence of the history of Active Skin’s business, and its sales and distribution of skincare and cosmetics using the Active Skin trade marks;(b)Mr Whitehead is a partner at Hazan Hollander, the legal representative for Active Skin. He sets out the results of searches he caused to be conducted of and with the assistance of the Audited Media Association of Australia, which collects and provides magazine and other media distribution and readership data, Roy Morgan website, and ‘Wellbeing’ and ‘Natural Health’ magazine media kits. Mr Wyeth and Mrs Smith were each cross‑examined. Messrs Lang and Whitehead were not required for cross‑examination. The parties provided written opening outlines, I heard oral openings, received written closing submissions, and heard oral closing submissions from counsel. I have had the benefit of transcript, as well as my contemporaneous notes, aiding my recollection of the witnesses’ demeanour and their evidence. Confidential evidence

Decision

Reasons for decision

I am not persuaded by the lack of evidence of any deception or confusion – before or at the Priority Date, or since - that there would be little likelihood of confusion arising if the Active Skin Applications were to proceed to registration. First, as I have said, s 60 of the TM Act is concerned with notional use, not the actual use of the trade mark applicant, and secondly, Active Skin’s actual use and market presence under or by reference to any Active Skin trade mark was historical and extremely limited, at most de minimus, in the period leading to the Priority Date, at the Priority Date, and afterwards. In the circumstances, the lack of sales evidence is determinative. Whilst Yey had been an active and significant online retailer, for 9 years before the Priority Date establishing and maintaining its reputation in the Yey trade marks.Conclusion on s 60 Ground of opposition For the above reasons, I have concluded that the grounds of opposition under s 60 of the TM Act has been established by Yey. I have concluded that Yey has established that, at the Priority Date – 22 April 2015, and at the filing date of the 979 mark, 24 March 2015, it possessed a significant reputation in Australia in its activeskin trade mark, among consumers of skincare and cosmetics, and other persons in the cosmetics industry. I consider that because of that reputation in its activeskin trade mark, allowing the Active Skin Applications to proceed to registration is likely to deceive or cause confusion. As I have found that the ground of opposition under s 60 of the TM Act has been established, it is not necessary that I determine the ground of opposition under s 42 of the Act. However, for completeness, I turn to the s 42 ground of opposition. SECTION 42 GROUND OF OPPOSITION I have set out at [64] the representations Yey contends would arise by use of the Active Skin Applications, in contravention of the ACL. As made clear by the Full Court in TPG Internet, the central question to be considered is whether the conduct, as a whole, would lead, or is likely to lead a person exposed to the conduct into error. For the reasons I have said in relation to the s 60 ground of opposition and those that follow, I am satisfied that Yey has made out its ground of opposition under s 42(b) of the TM Act. If the Active Skin Applications were to proceed to registration, it would be likely that the use of each of them would be likely to mislead or deceive consumers of cosmetics, skincare, and beauty products, – the class 3 goods – the consumers of class 35 specified services. In determining whether there is a real, or not remote chance or possibility of misleading or deception, I have had regard the similarity of the Active Skin Application trade marks and Yey’s trade marks, and to the similarity of the goods and services sought to be covered by the Active Skin Applications, and the services provided by Yey. Contrary to Active Skin’s submission, I am concerned with conduct that is deceptive or misleading, not whether any deception that results from that conduct is intentional: TPG Internet at [22(c)].

Ratio Decidendi

Legal Principle Established

In 2006, Mrs Smith and her husband incorporated their partnership as Active Skin Pty Ltd. As I have said above, Mrs and Mr Smith are each a director and shareholder of Active Skin. Mrs Smith is also the company secretary. Active Skin business operations From 2004 to date Mrs Smith has conducted Active Skin’s business out of the family home, in a western suburb of Sydney. Whilst in cross‑examination Mrs Smith stated that Active Skin also had an office in Surry Hills during 2006, Sydney, she was extremely vague about it. No street address was ever given in any advertisements, nor did any customers or suppliers between 2006 and 2015 ever request to visit Active Skin. Active Skin has never operated a retail outlet (I refer to pop-up stalls in shopping centres below), nor, save for the single reference to the above office, has it had the need for any business premises other than the Smith family home. Mrs Smith is responsible for the products, supply of the products and advertisements. Mr Smith works full time as a consultant engineer. He is responsible for the accounting side of the business. Mrs Smith sources the products, receives supplies of the products Active Skin sourced, receives and processes orders (by telephone, mail, email, and since late 2013, also by the company’s website), packages the products ordered, and sends them to customers (stockists and consumers), in each case, from her home. Customers, stockists and products Active Skin provided a customer list for 30 January 2006, and a list of stockists (health stores, pharmacies, other stores) that is a subset of that list. There is no other customer list, or total numbers of customers, or of stockists. Otherwise, save as possibly may be gleaned from interrogating bundles of some individual invoices exhibited by Mrs Smith, there is no evidence of the geographic extent of customers, or the quantum of transactions in any period. Mrs Smith stated that the core of Active Skin’s business was skincare and cosmetics. Mrs Smith produced an Active Skin product list for the period 2004 to 2006, then comprising approximately 100 products - third party products she distributed, and her own brand bath salts and soaps and skincare products (the latter, US manufactured). Aside from a handful of product/new product brochures (2005, 2006, undated - query 2007), a handful of sales flyers and special pricing offers (2 for 2006 and an order form, one for each of 2008, 2010, 2011), a 2009 wholesale price list (approximately 80 products), and some third party brochures (by name, it appears some 7 third parties/brands), and two undated ‘Active Skin’ single/ double product brochures, there is otherwise no evidence of the number or range of its products. Limited records Mrs Smith gave evidence that the records exhibited to her affidavit were the entirety of records that the business had been able to locate. In her written evidence Mrs Smith explained her lack of documentation in the period before 2006 on the passage of time, and said that the documents she had located were examples of the advertisements placed, the brochures and marketing material she distributed, and the customer call sheets used. Mrs Smith explained that most of her records relating to the casual sales representatives used in 2004 – 2006 to cold call and sell her products in the regional areas – a box of records stored under her home - were destroyed by water damage caused by a leaking hot water tank.