Afterpay Australia Pty Ltd v Clearpay Pty Ltd

[2024] ATMO 17

TRADE MARKS ACT 1995

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

Re:Opposition by Pilates Haus Pty Ltd to registration of trade mark application 2278546 (41) – PILATES HOUSE – in the name of Nikola Siljeg as trustee for the Siljeg Family Trust

Delegate:

Nicholas Smith

Representation:

Opponent: Self-represented

Applicant: Arceo IP

Decision:

2024 ATMO 17

Trade Marks Act 1995 (Cth) - section 52 opposition: ss 42(b), 58 and 60 considered – none established – trade mark to proceed to registration

Background

1. This decision concerns an opposition brought by Pilates Haus Pty Ltd (‘Opponent’) to the registration of the trade mark which is the subject of the application detailed below in the name of Nikola Siljeg as trustee for the Siljeg Family Trust (‘Applicant’): 

Application Number:	2278546
Filing Date[1]:	22 June 2022
Services:	Class 41: Conducting pilates classes; Online pilates classes; Delivery of pilates material (pilates lessons and educational information) via social media (‘Applicant’s Services’)
Trade Mark:	PILATES HOUSE	(‘Trade Mark’)

[1] Also known in this decision as the ‘relevant date’.

2. Unless otherwise indicated, any references to sections or regulations in this decision are references to sections or regulations of the Trade Marks Act 1995 (Cth) (‘Act’) or the Trade Marks Regulations 1995 (Cth) (‘Regulations’), respectively.

3. Following the advertisement of the application’s acceptance for possible registration, the Opponent filed a Notice of Intention to Oppose the registration followed by a Statement of Grounds and Particulars (‘SGP’), later rectified, on 31 January 2023.  The rectified SGP raised grounds of opposition under ss 42(b), 58 and 60.  The Applicant filed a Notice of Intention to Defend on 31 March 2023. 

Evidence

1. The parties filed the following evidence in this matter:

Declarant and Position	Date	Annexures or Exhibits
Evidence in support
Emma Heuston, principal lawyer of Ready to Boss Legal Pty Ltd (‘Heuston declaration’)	18 April 2023	A to M
Evidence in answer
Nikola Siljeg, the Applicant (‘Siljeg declaration’)	21 September 2023	A to M
Evidence in reply
None filed

5. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing in this matter or a decision without hearing.  The Applicant requested that the matter proceed to a decision without hearing and paid the appropriate fee.  As a result the matter has been allocated to a delegate of the Registrar for a decision based on the written record.

1. I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by s 55 which provides that, unless the proceedings are discontinued, dismissed, or have lapsed under s 54A the Registrar must, at the end, decide:

   (a)to refuse to register the trade mark; or

   (b)to register the trade mark (with or without conditions or limitations) in respect of the goods and/or services then specified in the application;

   having regard to the extent (if any) to which any ground on which the   application was opposed has been established. 

   In doing so I take account of   the written record comprised of the materials mentioned in the preceding paragraphs.

   The Evidence

2. The evidence of both parties in this case is limited and can be summarised in a fairly simple manner.  I have concerns with the Opponent’s evidence which is given by their (then) legal representative, who would not be expected to have direct knowledge of the facts that she is deposing to and does not provide any explanation why she may have any particular knowledge of the facts beyond that of an external lawyer.  As such I have had limited regard to statements not directly supported by documentary material.  Nevertheless, the Opponent’s evidence establishes that the Opponent was established in July 2020 and has offered services of a studio conducting pilates classes since then.  It initially operated a single studio and opened second and third studios in February 2022 and February 2023 respectively.  Evidence of promotion and customer base is what one would expect for a growing but small business operating 1-3 pilates studios.  The Opponent conducts these activities under the word mark PILATES HAUS and a device mark containing the words ‘pilates haus’.

3. The Applicant’s evidence is that it has used the Trade Mark to offer the Applicant’s Services, and particularly pilates classes, since 2016.  It annexes evidence of its business name registration in 2016 and use of the Trade Mark on its Facebook page, signage on its studio and business website. The evidence of the use of the Trade Mark on Facebook, its studio and its business website predate the establishment of the Opponent in 2020.

   Grounds of Opposition, Onus and Standard of Proof

4. As indicated above, in the rectified SGP the Opponent nominated grounds of opposition under ss 42(b), 58 and 60.  To successfully oppose the application the Opponent needs to establish one of the nominated grounds.  

   10.     The onus of proof in an opposition rests upon the Opponent.[2]  The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[3]  The date at which the rights of the parties are to be determined is the relevant date, which is also the priority date for the purposes of s 60.[4]

   [2] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).

   [3] Following Pfizer Products Inc v Karam [2006] FCA 1663, [6]-[26] (Gyles J), and Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ).

   [4] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82, [4] (Kitto J) (‘Southern Cross’).

   Discussion

   Section 58 – Applicant not owner of trade mark

   11.     Section 58 is reproduced below:

   Section 58. Applicant not owner of trade mark

   The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

   Note:For applicant see section 6.

   12.     The owner of a trade mark is the person who first uses it in Australia, or first files a trade mark application in Australia, whichever is the earlier.  It is now well established at law that in order to succeed under this ground of opposition the Opponent must establish three factors.  These are:

   · that the Trade Mark is identical, or substantially identical, to the trade mark(s) relied upon by the Opponent (‘the first factor’);[5]

   · that the Applicant’s Services are the ‘same kind of thing’ as the goods for which the trade mark(s) relied upon by the Opponent was used (‘the second factor’);[6] and

   ·     that a person other than the Applicant has the earlier claim to ownership of the Trade Mark based on use of the trade mark(s) relied upon by the Opponent prior to whichever is the earlier of: (a) the application to register; or (b) any actual use of the Trade Mark by the Applicant (‘the third factor’).[7]

   13.     The ground based on s 58 was particularised in the rectified SGP as follows:

   The Opponent has used the trade mark “Pilates Haus” in relation to conducting and carrying out Pilates classes since at least July 2020.  This is earlier than the Applicant’s first use of the Opposed Mark which is substantially identical to the Opponent’s Trade Mark.  Accordingly the Opponent is the owner of the Opposed Mark, not the Applicant.

   14.     As set out in my summary of the evidence above, the Applicant has established that it commenced use of the Trade Mark in connection with conducting and carrying out pilates classes in 2016, well before the July 2020 date set out in the particulars and established in the Opponent’s evidence.  As the Opponent has failed to establish the third factor (and must establish all three factors to succeed in the s 58 ground of opposition), I find that the Opponent has failed to establish the ground of opposition pursuant to s 58.

   Section 60

   [5] Carnival Cruise Lines Inc. v Sitmar Cruises Limited (1994) 31 IPR 375 (Gummow J)..

   [6] Re Hicks’ Trade Mark (1897) 22 VLR 636, 640 (Holroyd J).

   [7] Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402, 413 (McGarvie J).

5. Section 60 is reproduced below:

   Section 60 - Trade mark similar to trade mark that has acquired a reputation in Australia

   The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

   (a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

   (b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.

6. To establish a ground of opposition under s 60, an opponent must demonstrate that as at the relevant date there was another trade mark which had acquired a reputation in Australia amongst a significant or substantial number of persons in the relevant market such that use of the trade mark would be likely to deceive or cause confusion.

7. Some of the relevant principles of s 60 are summarised in the recent case of Ragopika Pty Ltd v Padmasingh Isaac trading as Aachi Spices and Foods as follows:

   The first of these elements calls for a factual inquiry into the extent and nature of the reputation that had been acquired by the existing trade mark – here, the Aachi mark – in Australia. The second element calls for an assessment of the likelihood of deception or confusion arising from use of the new trade mark as a consequence of that reputation.

   The existing trade mark need not even be registered for s 60 to be engaged (Fry Consulting Pty Ltd v Sports Warehouse Inc [2012] FCA 81; 201 FCR 565 (Fry Consulting) at [121] (Dodds-Streeton J); Qantas Airways Ltd v Edwards [2016] FCA 729 (Qantas Airways) at [144] (Yates J)). The classes of goods and/or services in respect of which the existing trade mark has been used, and those in which the new trade mark is intended to be used, may be very relevant to the likelihood of confusion (see Qantas Airways at [143] and GAIN Capital UK Limited v Citigroup Inc (No 4) [2017] FCA 519 at [148] (Markovic J)), but the fact that the classes are not the same cannot be determinative. The reputation of the existing trade mark need not relate specifically to the goods or services that are the subject of the proposed application (Qantas Airways at [143]; Rodney Jane Racing Pty Ltd v Monster Energy Company [2019] FCA 923 (Rodney Jane Racing) at [87] (O’Bryan J)). The question is simply whether the reputation of the existing trade mark in Australia is such that the use of the new trade mark is “likely” to be deceptive or cause confusion.[8]

   [8] [2023] FCA 487, [20]-[21] (Kennett J)

8. In McCormick & Co Inc v McCormick[9], Kenny J considered what is intended by the word ‘reputation’ as used in s 60.  Her Honour consulted the Macquarie Dictionary and on the basis of the definition provided concluded that it was ‘the recognition of the [trade mark] by the public generally’.[10]  Her Honour quoted with approval the following words of Lockhart J in Re ConAgra Inc v McCain Foods (Aust) Pty Ltd:

   [R]eputation 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 …[11]

   [9] [2000] FCA 1335.

   [10] Ibid, [81].

   [11] (1992) 33 FCR 302, 343.

9. On the subject of reputation, Kenny J also referred to Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl GmbH & Co KG, where the Registrar’s delegate observed:

   [I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.

   As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also its esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the ‘recognition’ component of the trade mark’s reputation. The credit, image and values projected by a trade mark attaches to the ‘esteem’ component of the reputation as do the public events and other trader’s marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, ‘contra deals’ and so forth.

   It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held, or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.[12]

   [12] (1999) 47 IPR 423, 436.

10. As stated above, in assessing reputation under s 60, what constitutes a significant or substantial number of persons in the relevant market must be considered.  The case of Le Cordon Bleu BV v Cordon Bleu International Ltee[13] was decided under s 28(a) of the (now repealed) Trade Marks Act 1955 (Cth). That provision did not refer to ‘reputation’ at all, only that use of the impugned trade mark would be ‘likely to deceive or cause confusion’. Nevertheless the words of Heerey J provide some guidance:

    What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient … We are here concerned with foodstuffs sold in supermarkets, delicatessens, milk bars and other retail outlets. The relevant market is virtually the entire Australian population from early teenage years onwards.[14]

    [13] [2000] FCA 1587.

    [14] Ibid [91] (emphasis in original). Justice Heerey’s decision was overturned on appeal to the Full Federal Court, although not on the point quoted. Indeed the court specifically noted that his approach contained no error; see Renaud Cointreau v Cordon Bleu International Ltee [2001] FCA 1170, [75] (Moore, Tamberlin and Goldberg JJ).

11. The Opponent has particularised the ground of opposition in the SGP in the manner set out below: 

    The Opponent is the owner of the Trade Mark “Pilates Haus”.  Since July 2020, the Opponent has used and accrued a significant reputation in this trade mark in respect of services related to the conducting of pilates classes which are the same or closely related to the services covered under the Opposed Application.

12. I am not satisfied on the evidence before me that at the relevant date the Opponent had acquired a reputation in the PILATES HAUS mark sufficient for the requirements of s 60(a).  The market for pilates classes in Australia is a broad one, it being a popular activity accessible to most of the population.  At the relevant date the Opponent had operated one studio for just under two years and a second studio for approximately 5 months, had engaged in a corresponding level of marketing and had a customer base that corresponds to a small business offering services from 1-2 pilates studios.  The evidence before me is in no way sufficient to establish that, at the relevant date, the Opponent’s PILATES HAUS mark had acquired a reputation in Australia amongst a significant or substantial number of persons in the relevant market (pilates services).  As the Opponent has not satisfied the requirements under s 60(a) I do not need to consider whether the use of the Trade Mark would be likely to deceive or cause confusion. I find that the Opponent has failed to establish the ground of opposition pursuant to s 60.

    Section 42

13. Section 42 is reproduced below:

    42 - Trade mark scandalous or its use contrary to law

    An application for the registration of a trade mark must be rejected if:
    (a) the trade mark contains or consists of scandalous matter; or
    (b) its use would be contrary to law.

14. The Opponent pressed this ground of opposition solely on the basis that the use of the Trade Mark would be contrary to law (s 42(b)).  The onus is on the Opponent to establish that use of the Trade Mark by the Applicant would be, rather than could be, contrary to law on the balance of probabilities.[15]  The relevant time for assessing whether an application is contrary to law is at the relevant date but ‘looking forward to prospective conduct after registration’.[16]

    [15] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683, [28] (Madgwick J).

    [16] Time Warner Entertainment Co LP v Stepsam Investments Pty Ltd [2004] 59 IPR 343, 353 (Wilcox J).

15. The Opponent has particularised the ground of opposition in the SGP as follows: 

    Given the Opponent’s use and reputation in Australia with the trade mark “Pilates Hause”, the use of the Opposed Mark would constitute passing off and/or misleading and deceptive conduct in contravention of Australian Consumer Law

16. As previously stated the Opponent has failed to establish a ground of opposition under s 60. The test for misleading or deceptive conduct under s 18 of the Australian Consumer Law (‘ACL’) is a more stringent one than that for deception or confusion under s 60,[17] and consequently I find that the Opponent has also failed to establish that the Applicant’s use of the Trade Mark would be contrary to s 18 of the ACL.

    [17] See, e.g.: Ownit Homes Pty Ltd v Ownit Conveyancing Pty Ltd [2005] ATMO 47, [36] (Hearing Officer Williams); Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198 (Gibbs CJ).

17. Justice Hill in Re Equity Access Pty Ltd v Westpac Banking Corporation also addressed the relationship between s 52 of the superseded Trade Practices Act 1974 (Cth) (‘TPA’) (section 52 of the TPA being the equivalent provision to s 18 of the ACL) 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.[18]

    [18] [1989] FCA 506, [40] (citations omitted).

18. For these reasons I am not satisfied that use of the Trade Mark by the Applicant would be contrary to law.  Therefore, the Opponent has failed to establish the ground of opposition under s 42(b).

    Decision and Costs

19. The Opponent has failed to establish any of the grounds of opposition it nominated in the SGP.  Trade mark application number 2278546 may proceed to registration not less than one month from the date of this decision.  If the Registrar is served with a notice of appeal before that time, I direct that registration shall not occur until either the appeal is withdrawn or discontinued.  Otherwise the disposition of the application should be in accordance with the Court’s order or direction.

20. The Applicant has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. I accordingly award costs against the Opponent under s 221 in the relevant amounts under Schedule 8 of the Regulations.

    Nicholas Smith

    Hearing Officer

    Delegate of the Registrar of Trade Marks

    21 January 2025