Apax Partners Midmarket v Apax Partners LLP

[2015] ATMO 30

TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS

Re:Opposition by Apax Partners Midmarket to registration of trade mark application 1364284(36) - APAX - in the name of Apax Partners LLP.

Delegate:	Debrett G Lyons
Representation:	Opponent: Blake Knowles of Cullens, Patent and Trade Mark Attorneys Applicant: Bill Ladas, special counsel of King & Wood Mallesons
Decision:	2015 ATMO 30 Section 52 opposition – Ground pursued under s.44(2); engagement of s.44(2) conceded by Applicant; ss44(3)(a) and (b) argued – s44(3)(a) to be applied - application to proceed to registration – divisional claim to be deleted.

Background

1. This matter concerns an opposition under section 52 of the Trade Marks Act 1995 (“the Act”) brought by Apax Partners Midmarket[1] (“the Opponent”) to registration of the trade mark APAX (“the Trade Mark”) for class 36 services  filed by Apax Partners Worldwide LLP, now Apax Partners LLP (“the Applicant”).

   [1] Formerly, Apax Partners SNC

2. Application for the Trade Mark was made on 31 May, 2010 under no. 1364284 for the services set out hereunder:

   Class 36: Insurance; financial affairs; monetary affairs; financial services; real

   estate affairs; corporate finance; private equity; investment services; capital, fund and trust investment services; investment management services; mutual fund, collective investment scheme and hedge fund services; unit trust services; financial and investment planning and research; advisory, consultancy and information services relating to all the aforesaid services

3. The application is a divisional of Australian trade mark application no. 1251095 (itself a divisional of application no. 1037722) although the Applicant has formally withdrawn the divisional claim and wishes that the application proceeds, if it does, without any claim to divisional status.

4. The application was examined in compliance with section 31 of the Act and on 21 June 2010 an examiner’s first report raised grounds for rejection of the application based on section 44 of the Act by reason of the Opponent’s prior registration no. 818902 for the same Trade Mark.

5. In response, the Applicant filed declaratory evidence (referenced at f.n. 2) and on 24 February 2013 requested that the class 36 specification be amended to read “venture capital financing, venture capital fund management, venture capital management, private equity investment and financing” as a result of which the application was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 7 March 2013.

6. The acceptance and advertisement was subject to an endorsement reading “provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied”. 

7. On 4 June 2013, the Opponent filed a Notice of Intention to Oppose the registration of the application. Thereafter the Opponent and Applicant filed, respectively, a Statement of Grounds and Particulars and a Notice of Intention to Defend.

8. The parties filed evidence as provided by the Trade Mark Regulations 1995 (“the Regulations”) after which a hearing was convened in Melbourne on 11 November 2014 where, acting as a delegate of the Registrar of Trade Marks, I took aural submissions, via telephone, from Blake Knowles, a partner of Cullens, Patent and Trade Mark Attorneys, who represented the Opponent and from Bill Ladas, special counsel of King & Wood Mallesons, solicitors, who appeared in person for the Applicant.

9. In the days leading up to the hearing both attorneys provided me with written outline submissions in accordance with directions I had given.

   Evidence

10. The evidence consists of the following declarations:

    in support

    ·    Rhiannon Patricia Solomon, a trade mark attorney in the employment of the Opponent’s representative, Cullens, made 5 December 2013 (“Solomon”).

    in answer

    ·    Simon Cresswell, General Counsel of the Applicant, made 28 February 2015 with Exhibits SC-1 through SC-11 (“Cresswell”)[2];

    ·    Mark McNamara, a partner at King & Wood Mallesons, made 5 March 2014 (“McNamara”);

    ·    Michael Barker, a partner at King & Wood Mallesons, made 6 March 2014 (“Barker”); and

    ·    Yuen-Yee Cho, a partner at King & Wood Mallesons, made 7 March 2014 (“Cho”).

    [2] Cresswell exhibits declarations that were filed during prosecution of the application from James Rozsa made 20 February 2013 (Rozsa) and Katherine Woodthorpe made 18 February 2013 (Woodthorpe).

    in reply

    ·    Casey Joly, a lawyer for the Opponent[3], made 7 May 2014 (“Joly”); and

    ·    Maurice Tchenio, the founder of the Applicant’s predecessor in business, made 8 July 2014 (“Tchenio”).

    [3] It is not clear from Joly whether he is engaged in-house or is an external advisor.

11. Prior to the hearing, the Applicant requested that a further declaration by Simon Cresswell made 25 September 2014 be accepted into evidence under Regulation 21.19.  On 14 October 2014 I advised the Applicant that I proposed to deny the request but would allow the Applicant to make representations on the matter at the hearing.

12. The Applicant did so but since my decision does not depend on anything in Simon Cresswell’s 25 September 2014 declaration it is unnecessary for me to come to a separate decision on the admissibility of that declaration.

    Ground of Opposition & Legislative Framework

13. The Opponent nominated its ground of opposition under section 44 of the Act and bears the onus to establish that ground on the ‘balance of probabilities’.[4]

    [4] See Pfizer Products Inc v Karam [2006] FCA 1663; (2006) 70 IPR 599 and Chocolaterie Guylian NV v Registrar of Trade Marks [2009] FCA 891, (2009) 82 IPR 13 at [22] – [27]. See also Sports Warehouse Inc v Fry Consulting [2010] FCA 664; (2010) 87 IPR 300 at [36] to [39]; and NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051 (9 September 2011) at [16] to [32].

    Section 44

14. Section 44 of the Act provides, relevantly:

    44  Identical etc. trade marks

    (1)     …  

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

    (a)       it is substantially identical with, or deceptively similar to:

    (i)        a trade mark registered by another person in respect of similar services or closely related goods; or

    (ii)       a trade mark whose registration in respect of similar services or closely related goods 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 services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

    Note 1:    For deceptively similar see section 10.

    Note 2:    For similar services see subsection 14(2).

    Note 3:       For priority date see section 12.

    Note 4:       The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

    (3)  If the Registrar in either case is satisfied:

        (a)  that there has been honest concurrent use of the 2 trade marks; or

    (b)  that, because of other circumstances, it is proper to do so;

    the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area.

    Note: For limitations see section 6.

    (4)  …

15. The Opponent relies upon its registration no. 818902 for APAX, which has a filing date earlier than the opposed application and is registered in respect of the following services in class 36:

    financial services; financial transactions and loans; financial dealings; all types of investment activities and in particular equity capital investment; financial engineering, arranging the transfer, merger and acquisition of businesses; search, selection, studies and advice relating to investments; financial, tax and real estate valuations; brokerage; valuation and management of property and real estate; financial analysis; leasing of property; factoring, financial and monetary business; setting-up, investing and managing funds, management of venture capital investment funds, fund raising, setting-up and investing in capital, venture capital and third and second stage equity investment

16. The Applicant concedes that section 44(2) is engaged and, understanding that it bears the onus of proof, relies on the exceptions in section 44(3)(a) and (b), underlining the fact that the application was accepted under section 44(3)(b) in the face of registration 818902.

    Submissions

17. In redacted form, the Opponent’s submissions are that:

    Given the trade marks and services under comparison are identical, and the risk of confusion and public inconvenience is high, the Applicant must put forward a strong case that registration on the basis of honest concurrent use (or other circumstances), based on other relevant factors set out in the authorities. The evidence filed by the Applicant is simply insufficient to make any determination as to the honesty of use of the APAX trade mark in Australia, the extent of such use, and whether registration favours the Applicant based on relative inconvenience. The evidence, although voluminous, is very sparse in relation to objective details relevant to the Applicant’s trading activities in Australia. Much of the evidence relates to the activities of the Applicant overseas, and after the filing date of the application. No specific evidence has been provided as to the makeup of the Applicant’s customer base, and how it engages with any Australian customers. The Applicant does not have an Australian office, or an Australian phone number. No revenue figures or promotional expenditure has been provided that is specific to Australia, and no supporting declarations from Australian clients have been provided. In light of the above, the Applicant has not discharged its burden to ‘satisfy’ the Registrar, as required by subsection 44(3), that registration on the basis of honest concurrent use or other circumstances is warranted.

    Honest concurrent use and/or other circumstances – section 44(3)

18. Had the divisional status of the application been maintained the Opponent rightly submitted that by operation of section 6 of the Act the relevant date for determining registrability would have been 14 January 2005. For reasons given later, I accept that the relevant date is the filing date of the application, 31 May 2010[5].

    [5] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592.

19. The parties agree that the following criteria are relevant to the determination of honest concurrent use[6]:

    (i)the degree of confusion likely between the trade marks in question;

    (ii)whether instances of confusion have in fact occurred;

    (iii)the honesty or otherwise of the concurrent use;

    (iv)the extent of use in duration, area and volume; and

    (v)the relative inconvenience that would be caused to the respective parties if the applicant's trade mark should be registered or not registered.

    [6] John Fitton & Company Limited'sapplication for a trade mark (1949) 66 RPC 110; McCormick & Company Inc v McCormick [2000] FCA 1335.

20. The Applicant now bears the onus of proof and its written submissions include the introductory statements that this case “is about market reality” and that a decision to exercise the Registrar’s discretion in favour of the Applicant would only reflect what is happening in the market. 

21. The Applicant’s primary position is that it is one of the world’s leading private equity and venture capital firms which adopted the Trade Mark honestly, has used it in commerce since 1991 such that it “has been known in the relevant circles in Australia since the late 1990s and has been used in Australia since at least 2001.”  The Applicant’s use has not resulted in any confusion and the relative inconvenience caused to it in needing to rebrand for Australia alone would far outweigh any disadvantage to the Opponent in allowing registration.

    The degree of confusion likely between the trade marks

22. The Applicant’s submissions are that section 44(3) requires tolerance of a likelihood of confusion and it points to decisions of the Federal Court and of this Office where discretion was exercised in favour of the later applicant even when the risk of likely confusion was high[7].

    [7] No NameRestaurants Pty Ltd v No Name Restaurants (Cesare) Pty Ltd 36 IPR 488; PB Foods Ltd v Malanda Dairy Foods Ltd [1999] FCA 1602.

23. The Opponent admits that it has not found any instances of confusion and the Applicant submits this is because its services “are highly specialized and would only be provided to sophisticated consumers.”  The Applicant cites the case of Idameneo (No 789) Ltd v Symbion Pharmacy Services Pty Ltd [2011] FCAFC 164 (15 December 2011) where the Full Federal Court of Australia repeated with approval the following statement from Lord Diplock in GE Trade Mark [1973] RPC 297:

    where goods are of a kind which are not normally sold to the general public for consumption or domestic use but are sold in a specialised market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential.

24. By contrast, the Opponent’s submissions are that this is a “triple identity case” and so there is a very significant risk of confusion.  The Opponent refers to Part 28.3.1 of the Trade Marks Office Manual of Practice & Procedure, which states in part that “[A] finding of a strong likelihood of confusion between the marks is not necessarily fatal to the applicant's case.  But the information supplied for the remaining four criteria (paras 3.2 - 3.5) would need to be very persuasive to overcome this shortcoming.”

    Evidence of actual confusion

25. The Applicant’s submission is that decisions from the Federal Court and from this Office do not make much of this factor when there is in fact no evidence of confusion[8].  It submits that three of its declarants, all professionals in the relevant field of business, had not heard of the Opponent before these proceedings[9].

    [8] In No Name Restaurants Pty Ltd v No Name Restaurants (Cesare) Pty Ltd 36 IPR 488, Hearing Officer V Zars stated as follows in exercising the discretion: “As the opponent did not raise any instances of confusion of the marks, I do not propose to make any comments on this issue”

    [9] In particular, Barker Declaration, paragraph 13; Woodthorpe Declaration, paragraph 11; Cho Declaration, paragraph 10; all declaring they had not heard of Apax SNC, the former name of the Opponent.

26. The Opponent states that “[W]e are not informed of any instances of confusion occurring in the Australian market. However, this is not to say that confusion has not occurred, or may not occur.”… “Given the potential for confusion is obvious and incontrovertible, focusing on whether there is evidence of actual confusion is a distraction from more relevant issues.”

    The honesty or otherwise of the concurrent use

27. The Applicant points to the evidence from Creswell that the Trade Mark was adopted by the Applicant “in or about” 1991 because the word “apax” has a relevant meaning in Ancient Greek, because it continued the existing branding of “APA funds” and because it bore a connection with one of the Applicant’s founders, an Alan Patricof.

28. The Applicant’s position is that “the Opponent has accepted by inference … that the Applicant’s predecessor honestly adopted the APAX mark and has not otherwise challenged the Applicant’s honesty as at the date of adoption.”

29. The Opponent states that “the honesty of the use of the Trade Mark is an essential factor in determining whether the Registrar should exercise discretion to accept a trade mark in the face of an earlier conflicting trade mark.”  It concedes that it can be “inferred [from] Creswell that the Applicant’s predecessor in title honestly adopted the APAX mark ‘in or around’ 1991” but points to its own registrations for the Trade Mark in other jurisdictions before that time[10].

    [10] The Opponent registered APAX (Trade Mark No. 1596850) in France in June 1990.  

30. The Opponent refers to Part 28.3.3 of the Trade Marks Office Manual of Practice & Procedure, which states that “in cases where the conflicting trade marks are identical, or nearly so, and also have a high level of adaptation to distinguish, the applicant should furnish a statement indicating whether at the time of adopting the trade mark they were aware of the other trade mark: and, if so, why in the face of that knowledge they decided to persist.”

31. The Opponent then submits that:

    “[T]here is no express statement in the Applicant’s evidence that the Applicant’s predecessor was not aware of trade mark registration no. 818902 in 2001 when it claims to have extended its activities to Australia. The Opponent’s trade mark registration no. 818902 (filed in 1999) existed well before the purported date of first use of APAX by the Applicant’s predecessor in Australia in 2001. At that stage, even the most cursory exact word check of the IP Australia database would have revealed the existence of the Opponent’s trade mark.

    It is also important to differentiate between the honesty in adopting the trade mark overseas, and the honesty involved with adopting the same trade mark in Australia. The fact that a trade mark may be honestly adopted overseas by a person does not give that same person the right to simply extend such use to another country without regard to the prior rights of others. If this were the case, then any foreign trade mark owner could be excused for extending their activities to Australia notwithstanding the existence of prior conflicting trade mark rights. 

    The Applicant infers in its evidence that it is a large, sophisticated and successful private equity investment firm. As such, it is reasonable to infer that it would have had access to legal advice and could easily have procured appropriate due diligence checks prior to entering into the Australian market. On this basis, even if the Applicant did not have actual knowledge of cited trade mark no. 818902, it ought reasonably have been aware of the possibility that prior rights may exist (particularly in light of the Opponent’s rights in other countries), and conducted some sort of due diligence investigation. The lack of any evidence of even basic due diligence investigations should not be a factor supporting a finding of honest adoption of the trade mark in Australia. 

    We also understand from Cresswell1 that the declarant has only been employed by the Applicant since 2010. As such, Mr Cresswell would not have personal knowledge of the circumstances surrounding the commencement of use of the APAX trade mark in Australia. It may therefore have been more appropriate that another officer of the Applicant, one with personal knowledge of the circumstances surrounding the extension of activities to the Australian market, on whether the Applicant was aware of trade mark registration 818902 when it commenced use of its trade mark.

    Extent of use

32. Relevant extracts of the Applicant’s written submissions follow[11]:

    This case involves deals in the private equity and venture capital. … The Applicant is an equity advisory firm. … The Applicant’s business is relationship-based and it takes a long-term view in making investments. …The average length of an investment is around 5 years. … The use by the Applicant [of the Trade Mark] does not simply involve a sale of a product to a consumer in return for cash [but rather] is in the context of advising a number of funds by reference to APAX. … Funds advised by the Applicant invest in companies with a value between $1.5 billion and $7.5 billion … [and so] …the reputation garnered by the Applicant through its use is not measured by the revenue that it generates, but by the perception of it as being a leading deal-maker and the value of the deals in which it is involved.

    [11] Not always in the order in which they originally appeared in the Applicant’s written submissions but arranged for brevity

1. Against that backdrop, the Applicant’s summary of the extent and duration of use follows:

   1990’s

   ·“In my view, APAX would be a well-known name among those in the M&A and financial services industries. I consider that, since the late 1990s, a significant number of people in the private equity field in Australia would, on hearing the name APAX, associate the name exclusively with the Applicant” (McNamara, paragraph 9).

   ·“Although I have not worked on any matters involving the applicant since moving to Australia, I am aware that the Applicant has been involved in a large number of deals since the late 1990’s. Many of these deals would likely have been reported in the media and would have come to the attention of those participating in the private equity and M & A markets in Australia. This is particularly so as a number of the private equity professionals working in Australia during the 2000s had prior working experience in the private equity sector in the UK where they would hear of the Applicant’s name regularly in the private equity context”.  (Barker, paragraph 10).

   ·            “I first became aware of the Applicant and its mark APAX in the late 1990s.  It was my job to know who the top private equity players were that played in my industry and the Applicant was at that time one of the leading private equity firms” (Cho, paragraph 7)

   ·            “ … from the late 1990s onwards, the name of the Applicant and its mark APAX would arise in the Australian market in the context of private deals and occasionally inbound enquiries for conflict checks” (Cho, paragraph 8)

   1996

   ·Michael Barker first became aware of Applicant (“a major target client”) whilst practicing in the UK. He first became aware of Applicant’s reputation and presence in the Asia Pacific region while conducting business development research (“one of the leading UK private equity power houses that had invested in and had some on the ground operations in the Asia Pacific Region”) (Barker, paragraph 9).

   2001

   ·“The Applicant’s funds operated under the APAX trade mark have had Australian investors since at least 2001” and “[s]ince that time the Applicant has continuously used the APAX mark in Australia in respect of the Services” (Cresswell, paragraphs 28 and 29).

   2005

   ·Applicant completes purchase of Tommy Hilfiger (Exhibit JR-6 to Rozsa Declaration), as reported in the Financial Times, The New York Times and Wall Street Journal.

   ·Applicant ranked number 9 in PEI 300 (Exhibit SC-9, Cresswell).

   2008

   ·Australia’s Future Fund reported to be looking at buying a stake in the Applicant (article from The Australian in Exhibit SC-5, Cresswell).

   ·“In my view, APAX would be a well-known name among those in the private equity industry at the very least, but the name APAX would be known well beyond that specific industry (and in the financial services industry generally). I consider that a significant number of people in the financial services industry would now [as at 20 February 2013] - and as at 2008 – on hearing the name APAX, link that name exclusively with the Applicant” (Rozsa, paragraph 21).

   2009

   ·Australia’s Future Fund joined other investors in taking a collective stake of around 10% in the Applicant (worth around €900 million) (Woodthorpe Declaration, paragraph 9; article from The Australian in Exhibit SC-5, Cresswell Declaration; paragraph 31, Cresswell).

   ·Applicant purchased a 19% stake in SouFun, the largest online real estate portal in China, from Telstra (purchase price was around US$163 million) (Woodthorpe, paragraph 9; paragraph 31, Cresswell).

   ·Applicant ranked number 10 in PEI 300 (Exhibit SC-9, Cresswell).

   2010

   ·Funds advised by the Applicant agreed to sell its stake to IFCO Systems to the Australian Public company Brambles Limited (paragraph 31, Cresswell).

   ·Applicant sells Tommy Hilfiger to PVH, as reported in the Financial Times, The New York Times and Wall Street Journal (see also article from The Age in Exhibit SC-5, Cresswell).

   ·Applicant ranked number 10 in PEI 300 (Exhibit SC-9, Cresswell).

   2011

   ·Sale of Hit Entertainment (owner of Thomas The Tank Engine brand) by Applicant reported in global media (Exhibit JR-6 to Rozsa).

   ·Australia’s Future Fund joined other investors in taking a collective stake of around 10% in the Applicant (worth around €900 million) (Woodthorpe, paragraph 9), as reported widely in the Australian press (see eg. article in “Investment Magazine” at Exhibit SC-5, Cresswell).

   2012

   ·Nike’s sale of Cole Haan to Apax Partners for $570 million reported in New York Times (Exhibit JR-6 to Rozsa).

   ·Apax purchased Paradigm Software Group (including Australian operations) (Exhibit JR-6 to Rozsa Declaration; articles from The Australian and the Financial Review in Exhibit SC-5, Cresswell).

   ·Possible takeover of Everything Everywhere discussed in Australian Press (Exhibit SC-5, Cresswell).

   2013

   ·Telstra’s sale of a stake in SouFun to Applicant was widely reported in Australian media (Exhibit SC-5, Cresswell).

2. The Opponent’s “reply” is that the Applicant’s evidence “might be described as secondary or tangential material” and referred me to Kenny J.’s comment in the McCormick case (albeit written with section 60 of the Act in mind) that, as a practical matter, “it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions.” The Opponent reiterated that the Applicant’s evidence did not contain any specific information concerning Australian revenue generated from its services, nor any evidence of promotional expenditure or other specific expenditure aimed at establishing a presence in the Australian market. The Opponent underscored that none of the evidence even showed the Applicant to have a physical presence in Australia.

3. The Applicant’s retort was to remind me of the declarants’ statements that private equity funds typically do not advertise but, rather, gain their reputation from involvement in high value deals and in that regard the Applicant would have me draw parallels with the analysis of Arnold J in Och-Ziff Management Europe Ltd & Anor v Och Capital LLP & Anor [2010] EWHC 2599 (Ch) (20 October 2010):

   The Och-Ziff Group does not advertise its services. As a result of its success, however, the Och-Ziff Group has received substantial press coverage in the UK, including numerous articles in The Financial Times, The Times, The Daily Telegraph and The Independent, as well as specialist business and financial publications circulating here. Two particular factors that have contributed to this are its high-profile IPO and its involvement as a credit investor in the Glazer brothers' acquisition of Manchester United Football Club in May 2005. It has also been involved in a number of other UK acquisitions. As a result of the Group's own promotional efforts and the press coverage it has received, I am satisfied that the name Och-Ziff has become very well known to investment professionals in the UK and also to high net-worth individuals who are consumers of investment services. In addition, I consider that the name will be known to many in the wider financial services community.

4. The Applicant referred me to the comments of Lockhart J in ConAgra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 33 FCR 302 at 343:

   [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 …

5. The Opponent objects that although the primary basis upon which the Applicant claims use of the Trade Mark in Australia is that it has Australian investors, it does not identify those investors or how they engage the Applicant.

6. Further, the Opponent’s written submissions state that:

   … the specific examples of customer engagement in the Australian market given by the Applicant are also ambiguous as to whether services have actually been provided in the course of trade in Australia.  In particular:

   (i)the reference … to the acquisition of Australia’s Future Fund of a portion of the Applicant itself does not demonstrate use of the trade mark in the course of trade in Australia in relation to venture capital financing, venture capital fund management, venture capital management, private equity investment and financing. A sale of a business to an Australian company does not constitute use of a trade mark by that business in Australia.

   (ii)the reference … to the purchase of a stake in SouFun, does not demonstrate any apparent connection with Australia.

   (iii)the reference … to the sale of a stake in a Dutch Company, IFCO Systems, to an Australian Company, does not demonstrate that the trade mark APAX has been used in the course of trade in Australia in relation to venture capital financing, venture capital fund management, venture capital management, private equity investment and financing. Rather, it merely indicates that an Australian company purchased part of a Dutch company.

   The vast majority of newspaper and other media articles included in the Applicant’s evidence also post-date the filing date of the Opposed Mark. As such, they are of limited value in determining the extent of use and reputation of the Applicant in the trade mark at the date of filing. Further, the vast majority of references in media articles relate to investments in foreign countries, or deals with no immediately apparent Australian connection.  Further, the mere mention of a company in Australian media does not in itself constitute use of a trade mark in the Australian marketplace. It is commonplace for Australian news publications to refer to events overseas and to foreign companies when reporting news in Australia. Such activities are to be distinguished from objective evidence of trading activities under those brands in the Australian marketplace.  The list of “Target Countries” in the table of deals disclosed in Rozsa declaration, Exhibit JR-4 (included as part of Cresswell1, SC-1) does not include Australia. Furthermore, the supporting declarations of Mark McNamara, Michael Barker and Yuen-Yee Cho are personal opinion. What is more, the opinion is given by individuals who are partners of a law firm that act on behalf of the Applicant. More compelling evidence would have in the form of declarations of Australian customers of the Applicant.  We note that a supporting declaration has also been provided by Ms Katherine Woodthorpe, CEO of the Australian Private Equity and Venture Capital Association. Ms Woodthorpe declares her knowledge that the Applicant is a leading “European private equity firm”. Further, Ms Woodthorpe believes there is “little doubt that the big players in the financial services, private equity and venture capital fields will have been aware of the Applicant for the last 10 years and possibly longer”. However, this is merely opinion, and is not in itself supported by declaratory evidence from any of the ‘big players’.  Further, the extent of Ms Woodthorpe’s business relationship with the Applicant is not disclosed. It appears that Ms Woodthorpe has only a periphery relationship with the Applicant, and is not a customer or client of the Applicant.  Further, Ms Woodthorpe appears to have first become aware of the Applicant after the filing date of the Opposed Mark.

   Relative inconvenience

7. The Applicant’s submission is that case law shows this to be a critical factor.  It states that there are no proven instances of confusion; that the Opponent has not challenged the Applicant’s use in Australia; and were the Trade Mark to be registered to the Applicant, the situation will remain as it has since the Applicant’s first use in Australia.  Should registration be refused, it would be to defy the Applicant’s use of a mark it uses internationally and has used in Australia from 2001 up until the date of these proceedings.

8. The Opponent’s position is that registration “will provide a statutory right to the Applicant to use a trade mark that would otherwise constitute a clear infringement of the Opponent’s registered trade mark no. 818902 and has the potential to cause significant confusion in the Australian marketplace”, in response to which the Applicant points to section 122(1)(f) of the Act.

   Discussion

9. The recognition of concurrent rights held by unrelated traders in the one trade mark is bound to be difficult but the continuance into the Act of a provision recognizing honest concurrent use and allowing two (or more) traders to become the registered owner of the same mark or of similar trade marks continues a thinking that first took form in the Trade Marks Act 1905 (UK).

10. In earlier days the provision was most easily applied in the cases of businesses using the same mark, even for the same goods, but where they (and usually their customers) were separated geographically.  Acceptance of the later application was, as it remains, discretionary and it was not uncommon for conditions or limitations[12] to apply to the later acceptance.

    [12] As per the wording of s.21 of the Trade Marks Act 1905 (UK). 

11. At one level, those caveats limited the monopoly of the late comer to registration but at another they were statutory recognition of the state of the marketplace and a form of recognition that the public interest was served.

12. Later, the extent and duration of the uses came under closer consideration and so in Maeder’s Application, [1916] 1 Ch. 304, Sargant J. said that:

    It seems to me that the intention [of s. 21 of the Trade Marks Act 1905] was to allow the Court to weigh against a slight possibility of deception, or a slight possibility of confusion, in the minds of the public, the commercial claims which a proprietor of a common law mark might have acquired through a considerable amount of concurrent user,

    and it is after Pirie’s case that it might be said that the “commercial” factors start to outweigh the public interest and, in my opinion, make the provision less easy to administer.

13. That said, and applying the case now in Australia as I now find it, there are certain uncontroversial propositions including the fact that my discretion is a broad one and that the honesty (understood in a commercial sense) of the Applicant remains an important consideration[13].  On the evidence, I have no reason to think that the Applicant’s adoption of the Trade Mark in 1991 was other than honest.  However the relevant date at which the honesty should be assessed is the filing date of the application in May 2010, now that the divisional claim is forgone.

    [13] Re Parkington & Co Ltd's Application (1946) 63 RPC 171 at 182.

14. Whether or not the Applicant knew of the Opponent and its use of the Trade Mark at that time is not determinative of the matter; the question is whether the Applicant might have had a reasonable good faith expectation of pursuing registration based on its concurrent use or other circumstances.  That is not said so as to encourage the assiduous infringer – in McCormick & Co Inc v McCormick (2000) 51 IPR 102, Kenny J. found on the evidence that Mary McCormick had known what the registered owner did under the McCORMICK trade mark, that she did essentially the same thing under the same name, but her Honour held that use may be honest even though it is carried out with knowledge of the registered mark.

15. The concession made by the Applicant that section 44(2) is engaged does not entail as a corollary that likelihood of confusion is inevitable and we have seen that, nowadays, the Courts will not regard even a high likelihood of confusion as an automatic disqualification of section 44(3). In that respect the Applicant rightly points out that so-called “triple identity” is not a term found in the Act and there is no rule against triple identity in the context of section 44(3); the discretions therein operate as exceptions to subsections 44(1) and (2), and each is available when the respective marks are substantially identical and the services are similar.

16. Nor is the degree of likely confusion tested by simple reference to the compared specifications of the application with the registration; if that were so, section 44(2) would again be conclusive of the issue.

17. The Applicant has submitted that this case “is about market reality” and the reality is that the Applicant is one of the world’s leading private equity and venture capital firms.  To better understand the nature of the services offered by the Applicant I was referred to the recent decision in  Parncutt v Lion Capital [2013] ATMO 60, 2 August 2013 where the meaning of these terms was considered[14].

    [14] Parncutt v Lion Capital [2013] ATMO 60, paras 19-23

18. It is fair to say this is the Applicant’s core business and the conclusion I have drawn, influenced primarily by the highly specific nature of the business of the parties and the enormous monetary value of many of the transactions, is that the likelihood of confusion is relatively low.

19. Consideration of honest concurrent use requires use by both parties.  The provision is premised, as it says, on “concurrent” use.   Whilst there have been older cases where an applicant has prevailed in the face of an earlier registered, but unused, mark,[15] the better view is that it is only possible to apply this discretionary provision sensibly when the concurrency of uses is plain.  Moreover, the comparison of uses is relative in the sense that the weight to be attributed to the Applicant’s use will vary according to the extent of the use made by the Opponent.

    [15] Peddie’s Appn (1944) 61 RPC 31; E. Merck AG v Schering Ltd [1976] I.P.L.R. 49.

20. The Opponent provides essentially the same services as the Applicant.  That said, the details of its use of the Trade Mark in Australia are sketchy.  I would not say that there is no evidence but I would agree with the Applicant that the evidence is vague and is limited to assertion unsupported by physical evidence.  The Applicant’s position is, on one reading of the evidence, little better in so far as it claims to have “been known in Australia” since the late 1990’s, but I note that there is evidence from others working in this field to corroborate that claim.

21. None of this is surprising.  I accept on the evidence much of what is said of the confidential nature of the private equity business.  Much of the Opponent’s protestation about the lack of proof of use of the Trade Mark in Australia by the Applicant applies directly to the Opponent’s own evidence.

22. I accept that there are sufficient barometers to show me in other ways that the Applicant has been well known in Australia for some time before the relevant date.   I find that the Applicant’s use has been honest in the sense I have outlined already and I find that the Applicant’s action during examination of the case to limit its services to “venture capital financing, venture capital fund management, venture capital management, private equity investment and financing” is entirely appropriate and warrants no further containment.

23. Given that the parties are using the identical Trade Mark, operate in the same sphere and are international businesses who have both extended their reach to Australia I do not think there is very much weight to put on the question of relative convenience although I am in agreement with the Applicant’s submission that adoption of a different mark for the Australian market would be a serious inconvenience to it.

24. Taking all these factors together, I think that the Applicant has made out a case adequate for exercise of my discretion to apply section 44(3)(a).

1. The opposition under section 44 is not established. The Applicant has satisfied me that I should apply section 44(3)(a), which I do.

   Deletion of the divisional claim

2. This decision has been based on my acceptance of the Applicant’s request for deletion from the application of the claim to divisional status from application no. 1251095 (as noted, itself a divisional of application no. 1037722) and, accordingly, treatment of the filing date of the application, 31 May 2010, as the relevant date.

3. During prosecution of the application the Applicant offered to delete the divisional status of the application under section 65(7) of the Act. As it happened, the application was then accepted under section 44(3)(b) and so it seems that request was not actioned.

4. Nevertheless, the request was reiterated at the hearing and afterwards, more formally, in writing.  No objection was taken by the Opponent. 

5. The practice of this Office is to allow deletion under subsection 65(7) of a divisional claim during prosecution of an application.  The later application can then be treated as a standard application, and allocated its actual filing date.

6. Section 65(1) provides that if the particulars of an application have been published under section 30, the application may be amended as provided in the section. Section 65(7) provides that:

   An amendment may be made to any other particular specified in the application unless the amendment would have the effect of extending the rights that (apart from the amendment) the applicant would have under the registration if it were granted.

7. No prudent attorney would request the deletion of a divisional claim without first making a search for possible intervening rights. Likewise, were this application still under examination, a request for deletion of the divisional claim would in the usual course of events, cause the examiner to make a further search of the Register for any possible conflicting rights arising under section 44 by reason of the altered priority date.

8. For the reasons given I must assume no such search was made and so I have caused a relevant search to be made and I am advised that there are no perceived conflicts in terms of section 44 of the Act.

   Decision

9. Section 55(1) of the Act relevantly provides that, unless the proceedings are discontinued or dismissed:

   …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: For limitations see section 6.

10. My decision is to register the Trade Mark:

    (i) subject to entry on the Register of the endorsement that: “provisions of paragraph 44(3)(a) and/or Reg 4.15A(3)(a) applied”; and

    (ii) after deletion of the divisional claim.

11. The trade mark application may then proceed to registration one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been decided or discontinued and that the disposition of the application should be in accordance with the Court’s order or direction.

    Costs

12. The Applicant, having been successful in these proceedings, is entitled to its costs which I order against the Opponent accordance with Schedule 8 of the Regulations.

    Debrett G. Lyons
    Hearings Officer
    Trade Marks Hearings
    2 April 2015

    
    

In Millennium & Copthorne International Limited (MCIL) v Kingsgate Hotel Group Pty Ltd [2012] FCA 1022 (19 September 2012), Robertson J similarly treated the issue cursorily in exercising the discretion: “No instances of confusion were adduced in the present case and that is a further guiding factor to weigh in MCIL’s favour in the exercise of the discretion”

19.       It will therefore be useful to determine exactly what is meant by the term ‘private equity’ before proceeding further.

20.       Ms Ryan provided definitions from the Macquarie Dictionary (5th edition) for the words ‘private’, ‘private equity firm’ and ‘equity’ as follows:

Private: not of an official or public character; ... (of a company) having the right to transfer its shares restricted, the number of its members limited to 50, and prohibited from using public subscription for its shares or debentures.
Private equity firm: a shareholding company which is not listed on the stock exchange.
Equity: a. the interest of a shareholder of common stock in a company.
(b) Those funds of a company which are raised by borrowing from the proprietors and external sources

21.       She also provided an extract from a Reserve Bank of Australia Bulletin dated June 2002 which gives the following definition of ‘private equity’:

Private equity, also known as venture capital, is investment outside of public capital markets. While private equity can be raised from a variety of sources, such as friends, family members and business angels, the more visible (and measurable) avenue is the private equity market where funds are channelled to businesses – typically in new or fast-growing unlisted companies, or companies in financial difficulty with potential for restructuring – by fund managers.

22.       Ms Davies provided the following definition from an on-line dictionary ‘investopedia’:

Private equity: equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.

23.       I have discovered a further detailed explanation of the term, again from an Internet site:

Private equity is the provision of equity capital by financial investors – over the medium or long term – to non-quoted companies with high growth potential.
Venture capital is, strictly speaking, a subset of private equity and refers to equity investments made for the launch, early development, or expansion of a business. It has a particular emphasis on entrepreneurial undertakings rather than on mature businesses.
Private equity covers not only the financing required to create a business, but also includes financing in the subsequent development stages of its life cycle. When financing is required by a management team to buy an existing company from its current stakeholders, such a transaction is called a buyout.
Private equity and venture capital may refer to different stages of the investment but the essential definition remains the same: it is the provision of capital, after a process of negotiation between the investment fund manager and the entrepreneur, with the aim of developing the business and creating value. For the sake of simplicity, from this point onwards, the term private equity will be used to cover both venture capital and buyout.
Private equity firms have a main goal: seek out companies with the potential for growth and with the aim to put in place the capital, talent and strategy needed to permanently strengthen the company and raise its value.
Private equity is often categorised under the umbrella of “alternative investments”, complementary to the stock and bond portfolios traditionally used by investors.