Anagenix IP Limited v Pharmazen Ltd

[2018] ATMO 142

TRADE MARKS ACT 1995

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

Re:Opposition by Anagenix IP Limited to registration of trade mark application no. 1768379 (5, 16) – ActiPhen - in the name of Pharmazen Ltd

Delegate:	Bianca Irgang
Representation:	Opponent: Written submissions by Shelley Einfeld IP Applicant: Ben Hamilton of Hall & Wilcox
Decision:	2018 ATMO 142 Trade Marks Act 1995 - Section 52 opposition: sections 42(b), 44, 60 and 62A pressed – no ground of opposition established – opposition dismissed.

Background

1. Pharmazen Ltd (‘the applicant’), filed trade mark application number 1768379 on 3 May 2016 in classes 5 and 16 of the International Classification of Goods and Services. Current details of the application are set out below.

   Trade mark:  ActiPhen

   Trade mark application no:    1768379            

   Filing Date:  3 May 2016

   Specification:  Class 5: Food preparations including freeze dried kiwifruit adapted for medicinal purposes; pharmaceutical preparations including freeze dried kiwifruit powder; food supplements including freeze dried kiwifruit powder for medical purposes; nutritional supplements including freeze dried kiwifruit for medical use; food for babies

   Class 16:Printed materials related to food preparations adapted for medicinal purposes

2. Acceptance of the application for possible registration was published in the Australian Official Journal of Trade Marks on 22 September 2016. Subsequently Anagenix IP (‘the opponent’) filed its Notice of Intention to Oppose registration followed by its Statement of Grounds and Particulars[1].

   [1] which together constitute ‘the Notice’

3. The applicant then filed its Notice of Intention to Defend. Thereafter the opponent and the applicant respectively filed evidence in accordance with the provisions of the Trade Mark Regulations 1995 (‘the Regulations’).   

4. I heard the opposition in Canberra as a delegate of the Registrar of Trade Marks on 30 May 2018. The applicant was represented by Ben Hamilton of Hall & Wilcox. The opponent was not present at the hearing but did provide written submissions for consideration by way of its legal representatives, Shelley Einfeld IP.

   Grounds of Opposition

5. The Notice nominated a number of grounds of opposition under the Trade Marks Act 1995 (‘the Act’) however, only those grounds of opposition under sections 42(b), 44, 60 and 62A were pursued at the hearing. The onus is upon the opponent to establish one or more of its grounds of opposition. The Full Bench in Telstra Corporation Limited v Phone Directories Company Pty Ltd[2] affirmed the approach in Pfizer Products Inc. v Karam[3] where Gyles J referred to the standard of proof required in these matters in terms of a ‘balance of probabilities’. Should the opponent establish one ground of opposition in relation to all of the applicant’s goods, there is no requirement for me to consider the other grounds of opposition.

   [2] [2015] FCAFC 156, [133]

   [3] [2006] FCA 1663, [26]

   Evidence

6. The evidence in these matters consists of the following declarations:

   Evidence in Support

   ·Declaration of Christopher Michael Johnson ( ‘Johnson 1’) dated 20 April 2017

   ·Declaration of Terese Mansell (‘Mansell’) dated 7 April 2017

   Evidence in Answer

   ·Declaration of Craig McIntosh (‘McIntosh’) dated 28 July 2017

   Evidence in Reply

   ·Declaration of Christopher Michael Johnson ( ‘Johnson 2’) dated 21 September 2017

   ·Declaration of Mark Thurston ( ‘Thurston’) dated 2 October 2017

   Discussion

   Section 44 – Deceptive similarity

7. Subsection 44(1) of the Act is relevant in this case and reproduced below:

   (1) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of goods (applicant's goods) must be rejected if:

   (a) the applicant's trade mark is substantially identical with, or deceptively similar to:

   (i) a trade mark registered by another person in respect of similar goods or closely related services; or
   (ii) a trade mark whose registration in respect of similar goods or closely related services is being sought by another person; and

   (b) the priority date for the registration of the applicant's trade mark in respect of the applicant's goods is not earlier than the priority date for the registration of the other trade mark in respect of the similar goods or closely related services.

   Note 1:  For deceptively similar see section 10.

   Note 2:  For similar goods see subsection 14(1).
   Note 3:  For priority date see section 12.

8. To establish section 44of the Act the opponent must show all of the following:

   Øa trade mark, either registered or pending registration, in the name of a person other than the applicant, and in relation to which the opposed trade mark is either substantially identical or deceptively similar;

   Øthe trade mark in the name of the other person must be in respect of similar goods or closely related services; and

   Øthe priority date of the trade mark of the other person is earlier than the priority date of the applicant’s trade mark.

9. The opponent has a trade mark registration which it has put forward in support of the section 44 ground of opposition. The details of this registration are as follows:

   Trade mark:  ACTAZIN (‘opponent’s trade mark’)

   Trade mark registration no:  1505023

   Filing Date:  27 July 2012

   Specification:  Class 5: Kiwifruit extract powder as a dietetic substance or ingredient adapted for human health and medical use including dietary, health and nutritional supplements, medical food and functional foods and beverages

   Class 29:Kiwifruit extract powder as a dried fruit ingredient in the manufacture of food and chilled dairy products, including drinking yogurts

10. I note that the opponent’s trade mark has an earlier priority date than the Trade Mark. I also note that the respective goods are the same and similar goods being kiwifruit powder. Therefore, the key issue to be decided is whether the Trade Mark is substantially identical or deceptively similar to the opponent’s trade mark.

11. It is clear that the Trade Mark is not substantially identical with the opponent’s trade mark according to the side-by side test set out by Windeyer J. in Shell Co. (Aust) Ltd v Esso Standard Oil (Aust) Ltd[4].

    [4] (1963) 109 CLR 407 at 414

Trade Mark	Opponent’s trade mark
ActiPhen	ACTAZIN

1. While all the respective trade marks share the same three letter prefix ACT- and the last letter ‘N’, there exist such differences in spelling that there is a clear picture of dissimilarity between the trade marks. The trade marks are not substantially identical.

2. Deceptive similarity is defined by section 10 of the Act. The determination of deceptive similarity requires a comparison of the impression which persons of ordinary intelligence and memory would have upon recalling the opponent’s trade mark, to the impression that they would form from the Trade Mark[5].

   [5] The Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, Windeyer J [415]

3. According to the authorities[6] any consideration of whether trade marks are deceptively similar must take into account that consumers may have an imperfect recollection of a trade mark. As a general principle one needs to estimate the impression consumers are likely to form of each trade mark as a whole. Confusion may result if a trade mark incorporates the distinguishing features of another’s trade mark. Justice French in Woolworths[7] observed in relation to the expression “likely to deceive or cause confusion”:

   … The use of the word “likely” in this context does not import a requirement that it be more probable than not that the mark has that effect. The probability of deception or confusion must be finite and non-trivial. There must be a “real tangible danger of its occurring” …

   [6] Clark v Sharp (1898) 15 RPC 141, [146]; Re Application by the Pianotist Co Ltd (1906) 23 RPC 774; Australian Woollen Mills Ltd v F.S. Walton & Co Ltd (1937) 58 CLR 641; Aristoc Ltd v Rysta Ltd (1943) 60 RPC 87; Cordova v Vick Chemical Co (1951) 68 RPC 103; Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536; Registrar of Trade Marks v Woolworths Ltd (1999) 45 IPR 411

   [7] Woolworths (1999) 45 IPR 411

4. The concepts ‘deceive’ and ‘cause confusion’ were considered in Pioneer Hi-Bred  Corn  Co v Hy-Line Chicks Pty Ltd[8]:

   ‘Deceived’ implies the creation of an incorrect belief or mental impression and ‘causing confusion’ may go no further than perplexing or mixing up the minds of the purchasing public .... Where the deception or confusion alleged is as to the source of the goods, deceived is equivalent to being misled into thinking that the goods bearing the applicant's mark come from some other source and confused to being caused to wonder whether that might not be the case.

   [8] (1979) RPC 410 at 423

5. Thus I need to decide whether the concurrent use of the respective trade marks in relation to the goods in classes 5, 16 and 29 is likely to result in a tangible danger of confusion or deception. In this case, I do not consider it would.

6. In coming to this decision it is important that the trade marks are considered in their entirety – ‘it is the whole of the mark as used which is the subject of the comparison with the registered mark.’[9]

   [9] Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182, 218 (Allsop J).

7. In comparing the respective trade marks it becomes apparent that ActiPhen does share some phonetic similarities with the opponent’s trade mark ACTAZIN. Visually, all the trade marks begin with the same three letter prefix ACT- and end with the letter “N”. However, it is also clear that all the trade marks contain very different aural and visual structures within the trade mark being “-iPhe-” in comparison to “-azi-” which are very different in look and sound. The Trade Mark is also eight letters long compared to the opponent’s trade mark which consists of seven letters.

8. The written submissions provided on behalf of the opponent by its legal representatives Shelley Einfeld IP, submit that the prefix is the dominant cognitive cue which will be taken away by the viewer. The opponent stated:

   “…Both marks consist of three syllables in total and end with the letter “N” preceded by a close sounding vowel, namely “IN” vs. “EN” The respective marks therefore share a similar structure and rhythm overall. As noted in Johnson, para 86, ACTAZIN is pronounced with the emphasis on the first syllable – that is, as “ACT-UH-ZIN”. ActiPhen is pronounced with the same emphasis – namely, “ACT-uh-fen”. The middle syllable of both marks is likely to be pronounced by Australian consumers as a neutral sound (schwa) – namely as “uh” rather than distinctively as “I” or “a” as the case may be…”

9. Mr Hamilton, the representative for the applicant, argued that the prefix in both trade marks “ACT-” is descriptive of the kiwifruit goods. He states that the botanical name for green kiwi fruit is ‘actinidia decliciosa’. Actinidin is an enzyme which is unique to kiwi fruit. Mr Hamilton submitted that the natural shortening of the botanical name and the enzyme would be “ACT-” and that within the nutraceutical industry it is common practice to amalgamate a word which is associated with a biologically active component with a suffix to form a coined term to act as a brand name or trade mark.

10. While it is true that the trade marks all contain some similar letters and some letters may potentially be interchangeably mispronounced, I am not satisfied that the Trade Mark is deceptively similar to the opponent’s trade mark, particularly when the trade marks are considered, as they must be, as wholes. The spelling differences between the ‘coined’ terms is significant and even though all the trade marks may share some of the same three letter prefix and end with the letter “n”, the trade marks are likely to be pronounced a number of different ways by the general monolingual Australian consumer particularly when the suffixes of the trade marks are so different. I do not believe that ActiPhen would be pronounced in so similar a fashion as ACTAZIN by a significant number of consumers. The differences in spelling between the trade marks is simply too great. 

11. The Trade Mark is broken into two distinct parts via the capitalization of the “A-” and then the “-P-” within the Trade Mark. I believe this presentation would convey a strong emphasis to the consumer that the pronunciation of the term was a conjoining of the elements ACTI- and –PHEN. The sharp “eye” or “ee” sound at the end of the first part “ACTI-“ when coupled with the softer “FEN” sound at the end of the Trade Mark conveys a different impression to the opponent’s trade mark.

12. The opponent’s trade mark contains no cues as to how the term should be expressed or broken down for pronunciation. It is a coined expression of three syllables which have a number of different ways of being pronounced with emphasis considerably different to the one presented to me by the opponent such as “ACT-TA-ZEEN” or “ACT-TU-ZIN”. The memorable letter “z” which is accompanied by the strong “Zee” sound and the “in” or “een” sound which makes up the suffix are considerably different to the softer “FEN” suffix of the Trade Mark. 

13. The nature of the goods in question and the usual manner in which they are sold is also particularly relevant to determining whether there is a tangible danger of deception or confusion arising. While deception or confusion may arise when trade marks are used either visually or aurally, aural deception is unlikely to occur with goods which are generally inspected before purchase, such as the pharmaceutical goods claimed in class 5. The likelihood of visual deception is also reduced as the goods are ‘likely to be subjected to a careful visual examination by any intending purchaser’.[10] I am not satisfied there is a real tangible danger of these respective trade marks being confused in the marketplace when applied to the applicant’s goods in class 5 and the opponent’s goods, particularly when the opponent’s goods are being sold to manufacturers rather than end consumers.

    [10] Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505, per Burchett J at 510

14. In view of my finding that the Trade Mark is not substantially identical or deceptively similar to the opponent’s trade mark the opponent has not established its opposition ground based on section 44 of the Act.

    Section 60 - Reputation in Australia

15. Section 60 of the Act provides:

    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.

16. To establish the ground of opposition under section 60 the opponent is relying on its use of and reputation in its ACTAZIN trade mark. Unlike section 44 of the Act, section 60 does not require that the goods upon which the opponent uses its trade mark be of a specified standard of similarity with the goods of interest to the applicant, nor is there a requirement that the opponent’s trade mark be substantially identical or deceptively similar to the Trade Mark.

17. It is for me to determine whether the opponent has established that before 3 May 2016 the opponent’s ACTAZIN trade mark was recognized by the relevant market, or at least by a significant number of persons in Australia and whether because of that, the use by the applicant of the Trade Mark would be likely to cause the public confusion.

18. The principles relevant to the assessment of the likelihood of confusion were set out by French J in Registrar of Trade Marks v Woolworths (‘Woolworths’): [11]

    (ii) A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt.

    It may be interpolated that this is another way of expressing the proposition that the trade mark is likely to cause confusion if there is a real likelihood that some people will wonder or be left in doubt about whether the two sets of products or the products and services in question come from the same source.

    (iii) In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.

    (iv) The rights of the parties are to be determined as at the date of the application.

    (v) The question of deceptive similarity must be considered in respect of all goods or services coming within the specification in the application and in respect of which registration is desired, not only in respect of those goods or services on which it is proposed to immediately use the mark. The question is not limited to whether a particular use will give rise to deception or confusion. It must be based upon what the applicant can do if registration is obtained.

    In respect of the last proposition, Mason J observed in Berlei Hestia Industries Ltd v The Bali Company Inc:[12]

    “...the question whether there is a likelihood of confusion is to be answered, not by reference to the manner in which the respondent has used its mark in the past, but by reference to the use to which it can properly put the mark. The issue is whether that use would give rise to a real danger of confusion.”

    [11] [1999] FCA 1020 [50]

    [12] [1973] HCA 43; (1973) 129 CLR 353, 362

19. Reputation is to be assessed according to the test set out in McCormick & Company Inc v McCormick[13] by Kenny J:

    What is intended by the word “reputation” in s 60? The word is defined in The Macquarie Dictionary as follows:

    reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.

    Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to “the recognition of the McCormick & Co marks by the public generally”.

    Does the evidence establish that in Australia before 9 March 1992 the McCormick  & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public’s mistakenly attributing a business connection between the two or attributing her product to the company?

    [13] [2000] FCA 1335 [81]

20. The opponent has argued that the reputation of the opponent in its ACTAZIN trade mark in relation to its dried kiwi fruit powder is sufficient to enliven section 60 of the Act. Briefly put:

    ·The opponent is a collection of New Zealand nutraceutical companies which was incorporated in 2007. The opponent’s interests are in natural products relating to digestive health, including kiwifruit powder and it is the largest business selling kiwifruit ingredients in New Zealand and globally[14].

    [14] Johnson 1 [61]

    ·Mr Johnson advises that the opponent’s primary role is to facilitate connections between research and the commercialisation of natural products relating to aspects of human health and only works with products that have been the subject of scientific research.

    ·The opponent currently has active partnerships with a number of organization including Plant and Food Research, Callaghan Innovation, Massey University, the Riddet Institute and a number of other New Zealand universities and Crown Reasearch Institutes.  

    ·A kiwifruit powder concentrate was the first product developed by the opponent and the opponent applied its trade mark ACTAZIN to the product.

    ·Mr Johnson states that the trade mark ACTAZIN was first coined in 2007. He states that the ACT- prefix of the mark came from the botanical name for kiwifruit.

    ·The opponent’s first sales of the goods bearing the ACTAZIN trade mark were in 2009 in the USA.

    ·ACTAZIN is mainly sold as an ingredient to be formulated into capsules with other products, such as probiotics, to aid digestive health.

    ·The opponent has sold its ACTAZIN product to other New Zealand and overseas businesses, only manufacturers, which use ACTAZIN as an ingredient in specialised dietary supplements.

    ·The opponent sold its ACTAZIN products in New Zealand over several months beginning in February 2012.

    ·In 2012 the ACTAZIN product was also used in Go Healthy’s SLIMFAST range, SLIMFAST FAT ATTACK and SLIMFAST DETOX DIVA. The products were advertised on the website opponent has sold its ACTAZIN products to a number of other countries since  2009 being USA, Canada, Spain, UK, Italy, Taiwan, Thailand, Malaysia and South Korea.

    ·Mr Johnson states that the opponent has been in discussions since 2012 with potential customers in Australia with the purpose of selling the ACTAZIN product.

    ·In 2015 the opponent applied for TGA (Therapeutic Goods Act) approval to ACTAZIN in Australia which is required in order to be allowed to sell a product in the supplement market in Australia or use it as an ingredient. The approval was issued in 2016.

    ·The opponent commenced a second clinical trial of ACTAZIN in Australia in 2017 and expected to start supplying ACTAZIN in Australia in early 2018.

    ·The opponent has advertised its ACTAZIN product via its website[15], press releases[16], Natural Products NZ Summit[17], news articles[18], Stratum’s website and stands at trade shows[19].

    ·The opponent has significant market share in the international global health and wellness market for kiwifruit products[20]. 

    ·Thurston states that AIDP Inc. is the exclusive licensee for the opponent’s ACTAZIN goods in USA, Canada, Mexico and Brazil since July 2017. Mr Thurston states that he is concerned that confusion will occur between the Trade Mark and the opponent’s trade mark given the similarities.

    ·Terese Mansell states in her declaration  that she attended the SupplySide West trade show in Las Vegas in October 2016 and was confused when she saw the trade stand for ActiPhen because she believed that it was ACTAZIN and related to the opponent.

    [15] Johnson 1 [35]

    [16] Exhibit CMJ-7 accompanying Johnson 1

    [17] From 2013 through to 2016

    [18] Exhibit CMJ-8 accompanying Johnson 1

    [19] Exhibits CMJ-9 and CMJ-10 accompanying Johnson 1

    [20] Johnson 1 [62]

1. Given all of the above information it is clear that the opponent had not used its ACTAZIN trade mark within Australia before the priority date of the Trade Mark. The vast majority of the opponent’s use of its trade mark has been overseas and not directed towards the average Australian consumer. I note that there are products, trade shows and advertisements along with information on the benefits of kiwifruit powder that likely did reach Australian consumers. I also do not doubt that the opponent did engage in talks and in processes with the intent of bringing its product for sale to Australian manufacturers. However, being known in Australia does not necessarily translate into having a significant reputation in the Australian marketplace.

2. I do note Mansell in which the opponent has brought to my attention that an actual instance of confusion between the respective trade marks has taken place. However, this confusion took place in the USA and the level of reputation demonstrated by the opponent for its ACTAZIN product within Australia is de minimus. Particularly when I consider the considerable and growing size of the health and wellness industry and marketplace within Australia.

3. Taken all together, I am not satisfied that the opponent’s ACTAZIN trade mark had a very significant reputation in Australia for kiwifruit powder before the priority date of the Trade mark. As such, I am not satisfied that the applicant’s use of the Trade Mark will result in any significant degree of confusion or deception within Australia.  The opponent has accordingly not established its ground of opposition under section 60.

   Section 42(b) – Contrary to Law

4. Section 42(b) of the Act is reproduced below:

   Trade mark scandalous or its use contrary to law

   An application for the registration of a trade mark must be rejected if:

   (a) …

   (b) its use would be contrary to law.

5. I have found that the use of the Trade Mark is not, at a minimum, likely to “deceive or confuse” under section 60, it follows that the use is not, on the stricter test posited by the Australian Consumer Law, likely to mislead or deceive, nor do I believe use would amount to a false representation in terms of section 29. I thus find that the opponent has not established the ground of opposition under section 42(b).

   Section 62 A – Bad Faith

   37. Section 62A of the Act is reproduced below:

   62A Application made in bad faith

   The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

6. The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 provided some non-exhaustive examples of applications made in bad faith:

   ·persons who monitor new property developments, register the names of new developments as trade marks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers licence or buy the trade marks;

   ·persons who have a history of applying for trade marks that are deliberate misspellings of other registered trade marks;

   ·persons who identify trade marks used overseas but with no Australian use as yet who then apply to register the trade marks in Australia for the express purpose of selling them to the overseas owners.

7. The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) is a current leading Australian authority on this section.  In that case, Dodds-Streeton J made the following comments, quoting from Harrison’s Trade Mark Application[21]:

   Clearly the court, when considering bad faith, cannot apply a purely subjective test, called by Lord Hutton ‘the Robin Hood test’. The dishonest person or one with low standards cannot be permitted to obtain trade mark registrations in circumstances where a person abiding by a reasonable standard would not. The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading. Registration is not provided to help those with low moral standards.

   … The words ‘bad faith’ suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.[22]

   [21] [2004] EWCA Civ 1028; [2005] FSR 10.

   [22] [2012] FCA 81, [147].

8. Her Honour continued later in the same decision:

   The formulation in United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison.

   Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.[23]

   [23] Ibid [165]-[166].

9. The opponent stated the history between the applicant and opponent as follows: 

   ·In July 2013 the opponent was looking for additional production capcity and entered into discussions with the applicant’s Waitaki Biosciences (‘Waitaki’) division in relation to Waitaki’s capability for producing large quantities of the opponent’s ACTAZIN kiwifruit powder.

   ·On 25 September 2013 the applicant and the opponent entered into a Confidential Disclosure Agreement and the opponent supplied the applicant with a substantial amount of confidential information concerning its ACTAZIN product including the recipe for manufacturing ACTAZIN.

   ·In June 2014, the opponent formally engaged Waitaki to prepare three 500kg validation batches of ACTAZIN and paid for them.

   ·In September 2014, Waitaki produced the three 500kg validation batches of ACTAZIN. Johnson 1 asserts that problems with the quality of the product were immediately obvious and communication about the issues between the opponent and the applicant became difficult and eventually broke down[24].

   ·The opponent asserts and states in the evidence that the product produced by Waitaki was not up to standard. The applicant in its evidence asserts that the product was up to standard.

   ·In May 2015 the relationship between the opponent and the applicant regarding possible manufacture of the ACTAZIN product came to an end.

   ·In May 2016 the applicant commenced selling freeze dried kiwifruit powder product produced in New Zealand from New Zealand green kiwifruit under the Trade Mark.

   ·The product description of the applicant’s kiwifruit powder goods sold under the Trade Mark is very close to the opponent’s product description of its ACTAZIN product and the goods are mostly supplied to be made into dietary supplement products just like the opponent’s ACTAZIN goods. 

   [24] Exhibit CMJ-14 accompanying Johnson 1

10. The onus is on the opponent to establish bad faith and it will not be found easily given the serious nature of the allegation.[25]  In the present case the allegations made by the opponent in its particulars and submissions do not fall within the non-exhaustive examples set out in the Explanatory Memorandum referred to in paragraph 38 above.  I accept the opponent’s submissions that the applicant would have been aware of the opponent at the relevant date. It is clear from the opponent’s evidence that the applicant was well acquainted with the opponent’s ACTAZIN goods at the time of the filing the application for its Trade Mark. Further, it is apparent that the applicant had access to the opponent’s recipe and the method of manufacturing the kiwifruit powdered product.

    [25] Hard Coffee Pty Ltd v Hard Coffee Main Beach Pty Ltd [2009] ATMO 26,[12].

11. Mr Johnson states that in May 2016 an incident occurred at the Vita Foods trade fair in Geneva, which caused him to believe that the applicant intended to compete unfairly with the opponent in the kiwifruit powder market. He states that he had a conversation with Craig McIntosh, the CEO of the applicant, about the problems with the unusable kiwifruit powder product supplied by Waitaki and that the applicant owed money to the opponent. According to Mr Johnson angry words were exchanged between the two and it culminated in what amounted to a threat to put the opponent out of business[26].

    [26] Johnson 1 [72]

12. The applicant denies all the allegations made by the opponent and states that Mr McIntosh’s conduct cannot be regarded as ‘unscrupulous, underhand or unconscientious’. The applicant asserts that while it was aware of the opponent, the choice to adopt the Trade Mark was made on the basis of the active ingredient in kiwifruit and that is it not deceptively similar to the opponent’s ACTAZIN trade mark. The applicant points out that there are significant differences between the products in terms of composition and benefits and that wholesale consumers are acutely aware of these differences[27].  

    [27] McIntosh [9.1-12.6]

13. I note that the time-line for the launch of the applicant’s product into the same marketplace as the opponent, after considerable information had been shared between the parties and the falling out between them does raise eyebrows. However, in circumstances where the evidence in support of the section 62A ground of opposition is very limited and the opponent bears the onus, I cannot be satisfied the applicant’s conduct in filing the application was unscrupulous, underhanded or unconscientious in character based upon the limited evidence before me to substantiate the opponent’s assertions. While it may well be the case that behavior amounting to bad faith has been engaged in, the evidence before me is simply not sufficient to establish that.

14. Consequently I find that the opponent has failed to establish the ground of opposition under section 62A of the Act.

    Decision

15. Section 55 of the Act provides:

    55  Decision

    (1)  Unless subsection (3) applies to the proceedings, 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.

    Note:          Forlimitationssee section 6.

16. The opponent has not established any grounds of opposition. The trade mark application may accordingly proceed to registration one month from the date of this decision. If the Registrar has been served with notice of appeal before that time, I direct that registration of the trade mark shall not occur until the appeal has been decided or discontinued.

    Costs

17. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs against the opponent under section 221 of the Act in terms of Schedule 8 of the Regulations.

    Bianca Irgang

    Hearing Officer

    Oppositions and Hearings

    11 September 2018