American Airlines Inc v Advantagecard Pty Ltd

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Oppositions by American Airlines, Inc. to applications under section 92 of the Act by Advantagecard Pty Ltd to remove trade mark numbers 519305(39), 702930(39), 702934(39), 721814(39), 805290(35)(39) 826664(35)(39) - AAdvantage trade marks – registered in the name of American Airlines, Inc

Delegate:

Iain Campbell Thompson

Representation:

Owner: Eric Ziehlke of Chrysiliou IP

Removal Applicant: Did not appear or file written submissions

Decision:

2013 ATMO 63

Section 96 - s92(4)(a) and (b) trade marks used in good faith during relevant period.

Oppositions to removal established

Background

In these proceedings under section 96 of the Trade Marks Act 1995 (‘the Act’) Advantagecard Pty Ltd (‘the Removal Applicant’) applied under paragraphs 92(a) and (b) on 14 August 2009 for the removal of the trade marks listed hereunder for all services in respect of which they are registered except, where relevant, for the services, ‘providing a program of bonus flights for frequent travelers.’
Registration No:             519305
Priority Date:                   15 September 1989
Services:Class 39: Services rendered in the carriage or transport of passengers and freight by aeroplane and related or ancillary means of transport; and all other services necessarily connected with or ancillary to such transport including freight forwarding and storage, arranging of tours and travel information
Trade Mark:
Registration No:             702930
Priority Date:                   20 February 1996
Services:Class 39: Transportation of passengers by air, including providing a program of bonus flights for frequent travellers
Trade Mark:  AAdvantage Gold
Registration No:             702934
Priority Date:                   20 February 1996
Services:Class 39: Transportation of passengers by air, including providing a program of bonus flights for frequent travellers
Trade Mark:  AAdvantage Platinum
Registration No:             721814
Priority Date:                   14 November 1996
Services:Class 39: Services in relation to the transportation of passengers by air, inclusive of providing a program of bonus flights for frequent travellers
Trade Mark:
Registration No:             805290
Priority Date:                   27 August 1999
Services:Class 35: Promoting the goods and services of other [sic] by means of an incentive awards program, whereby purchase points are awarded for purchase made from vendor subscribers, which can then be rendered for merchandise and travel
Class 39: Providing air transportation services featuring a program of bonus flights for frequent travellers
Trade Mark:  AAdvantage
Registration No:             826664
Priority Date:                   7 March 2000
Services:Class 35: Promoting the goods and services of others by means of an incentive awards program, whereby purchase points are awarded for purchases made from vendor subscribers, which can then be redeemed for merchandise and travel
Class 39: Transportation of passengers and cargo; travel information and reservation services
Trade Mark:
On 1 December 2009 American Airlines, Inc. (‘the Owner’) filed Notices of Opposition (‘the Notices’) to the removal applications. The Notices state the grounds of opposition to removal which were subsequently argued before me.
The parties have served and filed evidence as discussed hereunder to support their respective positions.
Subsequently both parties were informed of their right to be heard. The Owner elected to be heard and the Removal Applicant elected to rely on its evidence which is in the nature of being written submissions. As a delegate of the Registrar of Trade Marks I heard the submissions of the Owner made by Eric Ziehlke of Chrysiliou IP in Sydney on 13 August 2013.
Onus
In removal proceedings the onus is on the opponent to removal, here the Owner, in terms of section 100 which deals with the question of onus. Section 100 states:
100Burden on opponent to establish use of trade mark etc.
(1)In any proceedings relating to an opposed application, it is for the opponent to rebut:
(a)any allegation made under paragraph 92(4)(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:
(i)to use the trade mark in Australia; or
(ii)to authorise the use of the trade mark in Australia; or
(iii)to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services to which the opposed application relates (relevant goods and/or services); or
(b)any allegation made under paragraph 92(4)(a) that the trade mark has not, at any time before the period of one month ending on the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services; or
(c)any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.
Note 1:If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Note 2:For file, month and registered owner see section 6.
(2)For the purposes of paragraph 1(b), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time before the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:
(a)the opponent has established that the trade mark or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services before that period; or
(b)in a case where the trade mark has been assigned but a record of the assignment has not been entered in the Register:
(i)the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by the assignee in relation to those goods or services before that period and that that use was in accordance with the terms of the assignment; and
(ii)the Registrar or the court is of the opinion that it is reasonable, having regard to all the circumstances of the case, to treat the use of the trade mark by the assignee before that period as having been a use of the trade mark in relation to those goods or services by the registered owner.
Note 1:If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Note 2:For registered owner see section 6.
(3)For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:
(a)the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during that period; or
(b)in a case where the trade mark has been assigned but a record of the assignment has not been entered in the Register:
(i)the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by the assignee of the trade mark in relation to those goods or services during that period and that that use was in accordance with the terms of the assignment; and
(ii)the Registrar or the court is of the opinion that it is reasonable, having regard to all the circumstances of the case, to treat the use of the trade mark by the assignee during that period as having been a use of the trade mark in relation to those goods or services by the registered owner; or
(c)the opponent has established that the trade mark was not used by its registered owner in relation to those goods and/or services during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period.
Note 1: If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).
Note 2:For registered owner see section 6.
Relevant dates
The relevant dates for the purposes of paragraph 92(4)(a) are the priority dates, given above, of each of the registrations in respect of which removal is sought.
The relevant date under paragraph 92(4)(b) is the three year period ending on 14 July 2009.
Other
It follows logically in the circumstances of these matters that if the Owner demonstrates use of its trade marks during the three year period ending on 14 July 2009, it has also effectively addressed the ground under paragraph 92(4)(a) as such use should be viewed as being convincing evidence of its intention at the relevant dates to use the impugned trade marks.
Evidence
The evidence served and filed by the parties in these matters comprises statutory declarations being:
Evidence in Support
Charles Sultan
Stephen Limbrick
Evidence in Answer
Mark Truman
Evidence in Reply
Suzanne Rubin
Charles Sultan is Vice President Partner Marketing of the Owner. Mr Sultan details the history of the Owner from its roots in the 1920s through to the Aviation Corporation in 1928 which acquired many existing aviation companies and which were incorporated into American Airways Inc. in 1930 which changed its name in 1934 to that of the Owner – American Airlines, Inc.
By 2007 the Owner’s market share in the USA was 18% and its ‘house’ trade mark is that which appears below:
(‘the AA device trade mark’)
The device component of the AA device trade mark is a stylised American eagle and the AA device trade mark appears within impugned registrations 519305, 721814 and 826664.
There are two factors attested to by Mr Sultan which bear on the Owner’s allegation that it has used the impugned trade marks. Firstly, the Owner has a codeshare arrangement with QANTAS; and, secondly, it has an extensive loyalty program which it operates (and the Removal Applicant appears – via its seeking to limit the impugned registrations to ‘providing a program of bonus flights for frequent travellers’ – to implicitly agree that the Owner has provided this loyalty program). In order to explain my decisions, it is necessary to discuss the nature of both ‘codeshare’ and the loyalty program.
Codeshare
Mr Sultan explains:
American Airlines' presence in Australia is manifested in its involvement with the oneworld Alliance and its partnership with Qantas. The nature of the association of American Airlines with Qantas stems from their historical relationship and the fact that both airlines are members of the oneworld Alliance which brings together eleven of the leading airlines in the world. The Alliance provides a close link between American Airlines and Qantas in a range of services which include the mutual recognition of frequent flyers.
Launched early in 1999, February 2009 marked the 10th anniversary of the oneworld Alliance. Originally made up of five respected airlines, including American and Qantas Airlines, in a few years, oneworld has become one of the strongest air transport networks in the world, reaching cities all over the globe. oneworld has been named the World's Leading Airline Alliance at the World Travel Awards for six years in a row, a reflection of the Alliance's dedication to quality.
Qantas and American Airlines, cooperate through codeshare agreements, reciprocal frequent flyer programs and lounge access arrangements. The relationship began in 1989 with what was, at the time, the world's first commercial codeshare agreement. A codeshare is the practice of more than one airline selling space on the same flight, where a seat can be purchased on one airline but is actually operated by a cooperating airline under a different flight number or code. American Airlines codeshares on Qantas transpacific flights between the U.S. and Australia and New Zealand, as well as Qantas flights within and between select destinations in Australia and New Zealand. Through its codeshare agreement with Qantas, American Airlines offers flights to Australia via Adelaide, Brisbane, Cairns, Melbourne, Perth and Sydney. Thus, for example, an Australian passenger can purchase a flight on to the United States, and each leg is listed under both the QF code (for Qantas), even though a leg of the trip may be operated by American Airlines. The same leg of the trip operated by American Airlines would be cross-listed under the AA code (for American Airlines) for purchasers. An Australian passenger may purchase the identical flight on and here the flight would be listed under the AA code. Conversely, a United States passenger may purchase a flight on to Australia and each leg is listed under the AA code, even though one or more legs of the trip may be operated by Qantas. The same leg of the trip operated by Qantas would be cross-listed under the QF code for purchasers.
Mr Stephen Limbrick is Executive Manager Australian Sales of QANTAS. Mr Limbrick confirms the above description of the codeshare agreement between QANTAS and the Owner.
The Loyalty Program
Mr Sultan states:
Increased competition in the United States following the 1978 Airline Deregulation Act prompted airline marketing professionals to develop ways to reward repeat customers and build brand loyalty. The first idea at American Airlines, a special "loyalty fare", was modified and expanded to offer complimentary first class tickets and upgrades for companies, or discounted coach tickets. Membership was seeded by searching American Airlines' SABRE computer reservations system for recurring phone numbers. The 130,000 most frequent flyers, together with an additional 60,000 members of American Airlines' Admirals Club, were pre-enrolled and sent letters with their new account numbers.
In 1981, American Airlines introduced the AADVANTAGE travel awards program, a revolutionary marketing program to reward frequent flyers. Launched on 1 May 1981, the AADVANTAGE program was the first such loyalty program in the world. The program remains the world's largest program, with more than 50 million AADVANTAGE members worldwide as of 2005. There are currently over 80,000 AADVANTAGE members based in Australia.
The rapid appearance of competition changed the nature of the program, and as airlines began to compete on the features of their frequent flyer programs, the AADVANTAGE program liberalised its rules, established partnerships with hotel and rental car agencies and offered promotions such as extra free beverages. In 1982, the AADVANTAGE program also became the first program to co-operate with an international carrier, allowing its members to accrue and redeem miles on British Airways' flights to Europe.
Today, miles accumulated in the AADVANTAGE program allow members to redeem tickets, upgrade service class, or obtain free or discounted car rentals, hotel stays, merchandise, or other products and services through partners. For instance, members earn miles when staying at AADVANTAGE hotel partners or when renting a car from a partner company. Currently, over 35 hotel partners including, for instance, Crowne Plaza Hotels and Resorts, Hilton Hotels, Holiday Inn Hotels and Resorts, JW Marriott Hotels and Resorts, Hyatt, InterContinental Hotels and Resorts and Westin Hotels and Resorts, representing more than 75 brands and all 7 major car rental agencies, namely Alamo, Avis, Budget, Dollar, Europcar, Hertz, National and Thrifty are AADVANTAGE partners. Many of American Airlines' relationships with these hotel and car rental companies extend back decades. For example, both Hyatt and Avis have had long-standing partnerships with American, both dating back to the 1980's.
The most active AADVANTAGE members, based on the amount and price of travel booked, are designated AADVANTAGE Gold, AADVANTAGE Platinum and AADVANTAGE Executive Platinum elite members, with privileges such as a separate check-in, priority upgrade and stand-by processing or complimentary upgrades. Because not everyone is a frequent traveller, miles can also be earned through non-travel-related partners, including assorted financial partners, for instance, Chase, Citi, Fidelity Investments, Liberty Mutual, TD Ameritrade and Wells Fargo, and retail, for instance, DirecTv, FTD, Harry and David, Netflix, Office Depot, Samsonite and USA Today partners.
Concerning Australian membership of the Owner’s loyalty program Mr Sultan states:
There are currently nearly 85,000 AADVANTAGE members based in Australia. The first member based in Australia joined the program in 1981, and Australian membership in the AADVANTAGE program has grown steadily ever since.
In addition to the services provided to members of the AADVANTAGE program by the program directly, Australians and Australian based members of the program can earn and redeem points in the AADVANTAGE program through other oneworld member airlines such as Qantas and British Airways and through the codeshare alliance with Qantas. AADVANTAGE members can earn miles on any eligible fare on any Qantas operated flight, anywhere in the world, as well as Qantas codeshare services, inclusive of flights offered by Qantas on behalf of any other carrier. AADVANTAGE members can use their AADVANTAGE miles for awards of Qantas flights worldwide, including a variety of awards between North America, Australia and New Zealand.
The Australian members of the Owner’s loyalty program have the same access to the privileges and complimentary services such as hotels, car hire, upgrades, ‘free’ air travel tickets as do American members of the program: these offers are promoted to Australian members of the loyalty program in a variety of ways. Mr Sultan states:
The promotional activities of the AADVANTAGE program of American Airlines to Australian consumers include the following items during the Relevant Period for the Subject Marks:
• American Airlines' award-winning inflight magazine, American Way has been and continues to be an important source of American Airlines' advertisement and promotion of travel services and reward programs to Australians. American Way is a bi-monthly magazine distributed to all American Airlines passengers in flight and in the Admirals Club lounges.
• Celebrated Living, American Airlines' luxury magazine is offered in first and business classes to its Australian and other customers. Celebrated Living is a quality magazine that is distributed to all first class and business class American Airlines passengers in flight and in the Admirals Club lounges.
• American Airlines also issues to its customers, including Australian customers, the magazine AA Insider which includes articles concerning the activities of American Airlines and its services. AA Insider is distributed as an insert with the American Way magazine and is therefore distributed to all American Airlines passengers in flight and in the Admirals Club lounges.
• Newspaper, magazines, direct mail, telephone directories specifically directed at Australians.
• Brochures specifically directed at Australians including membership kits for the AADVANTAGE scheme.
• Advertising and promotion by American Airlines of the AADVANTAGE program to Australian consumers through the website allowing Australian to book flights online, redeem tickets, upgrade service class, obtain free or discounted car rentals, hotel stays, merchandise or other products and services.
• American Airlines also launched in December 2008 the website specifically directed at the Australian market.
• Via the codeshare arrangement of American Airlines with Qantas under the oneworld Alliance, there is close co-ordination between Qantas and American Airlines including specific reference to the AADVANTAGE program of American Airlines on the website.

The above statements are well supported by exhibits to Mr Sultan’s declaration and by Mr Limbrick’s declaration. A list of Australian members (with addresses redacted) is exhibited to Suzanne Rubin’s declaration in evidence in reply.
Mr Mark Truman is Managing Director of the Removal Applicant. As mentioned above, Mr Truman’s declaration by its nature is more a submission than it is evidence. The crux of the Removal Applicant’s argument appears to lie in the submission that:
[I]t appears that [the Owner’s] services would be provided under the Opponent's AMERICAN AIRLINES or associated trade marks as opposed to the AADVANTAGE group of trade marks. Even so, it is difficult to see how the Opponent could be capable of offering air transportation services, travel information, reservation services, freight forwarding and storage, tour arrangement or any other related or ancillary services given that by its own admission, it has not operated flights in or out of Australia since February 1992.
Section 92 - Legislation
Section 92 of the Act relevantly provides:
92Application for removal of trade mark from Register etc.
(1)Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.
(2)The application:
(a)must be in accordance with the regulations; and
(b)may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.
(3)An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person may apply to the court for an order directing the Registrar to remove the trade mark from the Register.
Note:For prescribed court see section 190.
(4)An application under subsection (1) or (3) (non‑use application) may be made on either or both of the following grounds, and on no other grounds:
(a)that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith:
(i)to use the trade mark in Australia; or
(ii)to authorise the use of the trade mark in Australia; or
(iii)to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services to which the non‑use application relates and that the registered owner:
(iv)has not used the trade mark in Australia; or
(v)has not used the trade mark in good faith in Australia;
in relation to those goods and/or services at any time before the period of one month ending on the day on which the non‑use application is filed;
(b)that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non‑use application is filed, and, at no time during that period, the person who was then the registered owner:
(i)used the trade mark in Australia; or
(ii)used the trade mark in good faith in Australia;
in relation to the goods and/or services to which the application relates.
Note 1:For file and month see section 6.
Note 2:If non‑use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under section 102 on the registration of the trade mark so that its registration does not extend to that place or export market.
As mentioned above, if the Owner establishes use of the impugned trade marks during the relevant period, it has also effectively answered the allegation under paragraph 92(4)(a) that on the date that the applications for the registration of the trade mark were filed, the applicant for registration had no intention in good faith to use the impugned trade marks in Australia.
Section 17 of the Act provides:
17What is a trade mark?
A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
Note:For sign see section 6.
What constitutes use of a trade mark is defined by section 7 which provides:
7Use of trade mark
(1)If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.
Note:For prescribed court see section 190.
(2)To avoid any doubt, it is stated that, if a trade mark consists of the following, or any combination of the following, namely, any letter, word, name or numeral, any aural representation of the trade mark is, for the purposes of this Act, a use of the trade mark.
(3)An authorised use of a trade mark by a person (see section 8) is taken, for the purposes of this Act, to be a use of the trade mark by the owner of the trade mark.
(4)In this Act:
use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second‑hand goods).
(5)In this Act:
use of a trade mark in relation to services means use of the trade mark in physical or other relation to the services.
Further, a trade mark is to be taken to be applied to, or applied in relation to, services as provided in section 9 of the Act:
9Definition of applied to and applied in relation to
(1)For the purposes of this Act:
(a)a trade mark is taken to be applied to any goods, material or thing if it is woven in, impressed on, worked into, or affixed or annexed to, the goods, material or thing; and
(b)a trade mark is taken to be applied in relation to goods or services:
(i)if it is applied to any covering, document, label, reel or thing in or with which the goods are, or are intended to be, dealt with or provided in the course of trade; or
(ii)if it is used in a manner likely to lead persons to believe that it refers to, describes or designates the goods or services; and
(c)a trade mark is taken also to be applied in relation to goods or services if it is used:
(i)on a signboard or in an advertisement (including a televised advertisement); or
(ii)in an invoice, wine list, catalogue, business letter, business paper, price list or other commercial document;
and goods are delivered, or services provided (as the case may be) to a person following a request or order made by referring to the trade mark as so used.
(2)In subparagraph (1)(b)(i):
covering includes packaging, frame, wrapper, container, stopper, lid or cap.
label includes a band or ticket.
Section 92 - Consideration
The Owner’s Services
As I have mentioned, the crux of the Removal Applicant’s argument appears to lie in the submission that, because the Owner provides services outside Australia, the impugned trade marks cannot have been used in Australia in relation to those services. This submission is ill-founded. In Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495; (1994) 31 IPR 375; [1994] AIPC 91-049 Gummow J stated at [55]:
It is appropriate now to consider more closely the nature of the arrangements pursuant to which bookings were made from Australia for Carnival cruises. Both Coulter Tours and Cruise World were appointed by Carnival as a general sales agent "on a non-exclusive basis". These firms were obliged to accept reservations from travel agents and to pass them on to Carnival on an "on request" basis. Final payment was to be received by Carnival in Miami 30 days before the departure date of the cruise in question. The gross commission of 20% received from Carnival by Coulter Tours or Cruise World was the only remuneration paid by Carnival; commissions to the local travel agents who dealt with the general sales agent were to be paid by the general sales agent out of that 20% commission. The local agent would contact the general agent seeking a particular booking for clients. The general agent would then forward the request to Carnival. The result would then be communicated by the general agent to the local agent, giving particulars of payment requirements and stating to the local agent that the reservation had been accepted. Carnival billed the general agent which in turn billed the local agent. The effect of the procedures was that the general agent brought about a contract made by it on behalf of its principal, Carnival, with the local agent on behalf of the passengers. The evidence indicates that in many cases, in the interval between the initial inquiry and the conclusion of the contract, there might be a number of communications on such matters as the location of available cabins.
Thus, whilst the course of trade involved the provision of the services contracted for by steps taken outside Australia (i.e. the cruise itself) crucial integers in that course of trade took place in Australia. The trade commenced with the various steps taken to encourage inquiries from prospective customers and advanced with the placing and acceptance of bookings. In relation to that course of trade, the marks "Fun Ship" and "Fun Ships" were used so as to indicate the connexion between Carnival and the services to be provided by means of its cruises, and to distinguish Carnival Cruises from those operated by other traders: Mark Foy's Limited v Davies Coop and Co. Ltd [1956] HCA 41; (1956) 95 CLR 190 at 205. Accordingly, in my view, before the dates of the relevant applications by Sitmar, there had been public use in Australia of "Fun Ship" and "Fun Ships" as trade marks so as to confer upon Carnival the statutory status of "proprietor" of those trade marks, within the sense of the High Court authorities to which I have referred.
There is a similar confluence of factors in the matters before me. There is:
1.   an offer of services by the Owner of the impugned trade marks to persons living in Australia;
2.   acceptance on the part of the Australian residents; and,
3.   consideration (the expenditure of ‘reward points’) which passes from the Australian resident to the Owner of the impugned trade marks.
Accordingly, the transactions between the Owner and Australian residents have brought about contracts, formed in Australia, in relation to the services of the Owner.
The services which are offered by the Owner to Australian residents include:
519305
Services rendered in the carriage or transport of passengers and freight by aeroplane and related or ancillary means of transport; and all other services necessarily connected with or ancillary to such transport including freight forwarding and storage, arranging of tours and travel information.
702930, 702934 & 721814[1]
Transportation of passengers by air, including providing a program of bonus flights for frequent travellers
805290
Promoting the goods and services of others by means of an incentive awards program, whereby purchase points are awarded for purchase made from vendor subscribers, which can then be rendered for merchandise and travel
Providing air transportation services featuring a program of bonus flights for frequent travellers
[1] The difference in the specification of services of 721814 is de minimis
826664
Promoting the goods and services of others by means of an incentive awards program, whereby purchase points are awarded for purchases made from vendor subscribers, which can then be redeemed for merchandise and travel
Transportation of passengers and cargo; travel information and reservation services
In relation to registrations 805290 and 826664 I note that the evidence shows that both the Owner and QANTAS promote each other’s goods and services under their respective trade marks (including each other’s loyalty programs) as a necessary part of their codesharing agreement.
The Trade Marks
Which, if any, of the Owner’s trade marks were used in relation to the provision of the services?
The Removal Applicant, in its submission in the declaration of Mr Truman, states:
In any event, I was unable to find any reference to the AAdvantage Gold trade mark or trade mark contained in the materials annexed at YY-1 or YY-7 of the Sultan Declaration.
This submission effectively concedes the use of the trade marks , AAdvantage Platinum and AAdvantage by the Owner and I agree that this use is supported by the evidence.
In terms of subsection 7(1), above, the question thus arises: is the use of the trade marks , AAdvantage Platinum and AAdvantage by the Owner (which is conceded by the Removal Applicant) a use of the balance of the impunged trade marks (the trade marks AAdvantage Gold or ) with additions or alterations that do not substantially affect the identity of the trade marks?
In considering the substantial identity of the trade marks CHILL and CHOC CHILL, Carr J stated in PB Foods Ltd v Malanda Dairy Foods Ltd [1999] FCA 1602; (1999) 47 IPR 47; [1999] AIPC 40,117 at 38:
The question to be decided in each case is largely one of fact, provided that the test is properly applied. Comparing CHOC CHILL, or COFFEE CHILL, or VANILLA CHILL or STRAWBERRY CHILL with CHILL, I note the differences comprising an extra word of varying length the function of which is to describe flavour, but I note the similarity of the constant use of the word CHILL. I have already mentioned the importance of CHILL and the degree to which it is essential to the mark. Bearing in mind the relative importance of CHILL I give very little weight to the descriptors CHOC, COFFEE, VANILLA or STRAWBERRY. In the end, I found myself in agreement with the delegate's reasoning and conclusion which is set out at p 10 of her reasons as follows:
"When the side by side comparison is made between the mark CHILL, used by Malanda, and the application trade mark it is not a simple one to one comparison. P B Foods' mark is not simply CHOC CHILL. PB Foods has chosen to file its mark as one which will be varied in use and in doing so has made it clear that the essential feature of its trade mark is the word CHILL which is used with a purely descriptive variable feature. In selecting the goods, a prospective purchaser will therefore recognise the word CHILL as the badge of origin and will see the word CHOC or COFFEE or STRAWBERRY or VANILLA as nominating nothing more than the flavour of the product. When considered in this light, it seems to me that the comparison between CHILL and CHOC CHILL does lead to a "total impression of similarity" and the proprietorship claim is supported."
Further, in E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15; (2010) 241 CLR 144; (2010) 265 ALR 645; (2010) 86 IPR 224; (2010) 84 ALJR 352; [2010] AIPC 92-381 French CJ, Gummow, Crennan and Bell JJ stated at [67] (with footnotes omitted):
Lion Nathan contended before the primary judge that use of a trade mark consisting of the word BAREFOOT in combination with the device was not use of the registered trade mark, which was the word BAREFOOT simpliciter. The primary judge correctly rejected this submission. The Full Court did not deal with this issue.
In support of this contention Lion Nathan relied on Colorado Group Ltd v Strandbags Group Pty Ltd. The registered trade mark in that case was for the word "Colorado", which, by reason of its geographical significance, was not inherently adapted to distinguish the owner's goods from the goods of other persons as required by s 41(3) of the Trade Marks Act. As noted by Gyles J, it was difficult to obtain registration of a geographical name as a trade mark under the Trade Marks Act 1955 (Cth) by reason of s 24(1)(d) of that Act. The trade mark for the word "Colorado" had been used in conjunction with a mountain peak device, which reinforced the geographical connotation of the word. Allsop J found that the mark used was a composite mark and that the mountain peak device was not a mere descriptor but a distinguishing feature.
This is to be contrasted with the position in this case. The addition of the device to the registered trade mark is not a feature which separately distinguishes the goods or substantially affects the identity of the registered trade mark because consumers are likely to identify the products sold under the registered trade mark with the device by reference to the word BAREFOOT . The device is an illustration of the word. The monopoly given by a registration of the word BAREFOOT alone is wide enough to include the word together with a device which does not substantially affect the identity of the trade mark in the word alone. So much is recognised by the terms of s 7(1), which speak of additions or alterations which "do not substantially affect the identity of the trade mark". Except for a situation of honest concurrent use, another trader is likely to be precluded from registering the device alone while the registered trade mark remains on the Register. The device is an addition to the registered trade mark that does not substantially affect its identity. Accordingly, the use of the registered trade mark with the device constitutes use of the registered trade mark in accordance with s 7(1).
Similarly, the conceded (and evidenced) use of the trade mark AAdvantage Platinum is a use of the trade mark AAdvantage Gold with an alteration or addition which does not substantially affect the identity of the trade mark. The words ‘Gold’ and ‘Platinum’ are, in the context of the trade marks under consideration, mere descriptors of different grades within the Owner’s loyalty program with different entitlements to ‘rewards’ and their use does not affect the identity of the trade mark AAdvantage which is the distinguishing portion of the trade marks by which purchasers of the Owners services are likely to identify those services.
By analogy, the conceded use of the impugned trade mark is also a use of the trade mark with alterations or additions which do not substantially affect its identity for reasons identical to those stated in the foregoing paragraph.
The Owner has therefore used each of the impugned trade marks.
Use during the relevant period
There were, when Mr Sultan made his declaration, some 85000 Australian members of the Owner’s loyalty scheme. As Ms Rubin explains:
As of August 2011, there are currently about 93,000 AADVANTAGE members based in Australia. The first member based in Australia joined the program in 1981, and Australian membership in the AADVANTAGE program has grown steadily ever since. As discussed in the Sultan Declaration dated 27 October 2010, American Airlines had between 70,000 and 90,000 AADVANTAGE members in Australia between 2006 and 2009.
While the Removal Applicant observes that the Owner has not shown that any Australian has availed themselves of the Owner’s services offered under its trade marks, I consider that the numbers involved dictate that it is quite unrealistic to suppose that no Australian has done so. In South African Airways (Proprietary) Ltd v Virtuoso, Ltd [2011] ATMO 30 I observed at [41] in relation to a different airline’s loyalty program:
Further, I agree with Mr Stevens that the trade mark VOYAGER has been used by the opponent in relation to, inter alia, airline transportation services in the broad for the following reason. There were, according to Mr Krishna’s evidence, in the relevant period, 717 people (year 2006) rising to 1602 people (year 2008) who were members of the VOYAGER scheme. In 2005, the year before the relevant period, there were 558 members of the scheme. It is, in my consideration, quite unrealistic to imagine that none of the people who were members of the scheme availed, or intended at some time to avail, themselves of the opponent’s ‘free’, or reduced price, airline tickets for airline transportation from Australia during the relevant period (which was offered under the VOYAGER trade mark) when that was the core object of the scheme. In other words, the trade mark VOYAGER functioned during the relevant period so as to indicate a connection in the course of trade between the owner of the trade mark and the transportation services it offered or provided to qualifying members of its frequent flyer program. These transportation services include transportation by airline, transportation of baggage, and (according to the evidence of Mr Krishna) the provision of chauffeur services.

Accordingly, in my consideration the Owner has shown, on the balance of probabilities, that it has used the impugned trade marks in relation to the services in respect of which they are registered during the relevant period.
Decision
Subsection 101(1) provides:
101Determination of opposed application—general
(1)Subject to subsection (3) and to section 102, if:
(a)the proceedings relating to an opposed application have not been discontinued or dismissed; and
(b)the Registrar is satisfied that the grounds on which the application was made have been established;
the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.
The Owner has established its opposition to the removal of the trade marks from the Register.
Costs
Costs may follow the event and I order costs at the official scale against the Removal Applicant to be appropriately apportioned between the oppositions. Accordingly, the Owner is entitled, for instance, to claim its costs once for its evidence in support; once for its evidence in reply, and once in relation to its attendance at the hearing but is entitled each official fee incurred as a result of its opposition to the removal of the impugned trade marks.
Iain Campbell Thompson
Hearing Officer
Trade Marks Hearings
21 August 2013

[2013] ATMO 63

21 August 2013