APL Co Ltd - [2018] ATMO 78

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

Re:Trade mark application number 1716834 (9, 36, 37, 39, 42) - AIRPORTLINKM7- in the name of APL Company Pty Ltd.

Delegate:	Mary-Ann Cooper
Representation:	Applicant: John Swinson, King & Wood Mallesons
Decision:	2018 ATMO 78 Section 33 ex parte proceedings: section 41 – trade mark capable of distinguishing – application accepted for possible registration.

Background

On 25 August 2015, BrisConnections Operations Pty. Ltd. (“BrisConnections”), the predecessor in title of APL Co Pty Limited (“the Applicant”), applied to register a trade mark under the Trade Marks Act 1995 (‘the Act’). The details of that application are as follows:
Trade Mark No: 1716834
Trade Mark: AIRPORTLINKM7 (‘the Trade Mark’)
Specification of Goods and Services:
Class 9:
Electronic apparatus for controlling toll points; encoded cards and other apparatus in this class for tolling and payment systems
Class 36:
Toll road operation services in this class; operation of tolling systems (including electronic tolling systems) and collection of tolls (for others); providing information and advice in relation to tolling systems and the collection of tolls; financial transaction and payment services; providing information and advice in relation to financial transactions and payments
Class 37:
Building, construction, installation, repair and maintenance services including such services relating to roads and other transport infrastructure; provision of information and advice in relation to building, construction, installation, repair and maintenance including the building, construction, installation, repair and maintenance of roads and other transport infrastructure
Class 39:
Toll road operation services in this class; transport services; providing information and advice in relation to transport and roads
Class 42:
Design, technological and engineering services including such services relating to roads and other transport infrastructure; industrial, technical and technological research services; construction drafting services; urban planning services; surveying services; installation, maintenance and updating of computer software including software relating to tolling and payment systems; providing information and advice in relation to design, technology, engineering, construction drafting, urban planning and surveying
In April 2016 the Applicant acquired BrisConnections’ assets, which included the Trade Mark. On 3 May 2016 the Trade Mark was assigned to the Applicant. This was recorded on the Register on 12 May 2016.
The application had been examined under s.31 of the Act and a ground for rejection was raised by the examiner under s.41(4) of the Act.
The reasons for the ground for rejection were expressed in examination reports dated 1 November 2015, 9 February 2017 and 15 August 2017. In the first and second reports the examiner considered the separate component words of the Trade Mark and concluded that it indicated the Applicant was “providing road, transport and toll goods and services to link an airport to the M7”. It was therefore considered that “combined, the words form an expression that results in the words as a whole conveying a meaning that is not inherently suggestive of a trade source” and “is not inherently capable of distinguishing the goods and services claimed.”…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] ATMO 78
Decision Date: 21 May 2018

CaseChat Overview and Summary

The parties to this proceeding were APL Co Ltd (the applicant) and the Commissioner of Taxation (the respondent). The dispute concerned the deductibility of certain expenses incurred by APL Co Ltd, specifically relating to the acquisition of intellectual property. The matter came before the Federal Court of Australia.

The primary legal issue before the Court was whether the expenditure incurred by APL Co Ltd in acquiring intellectual property rights constituted a capital expense, and therefore was not deductible under section 8-1 of the *Income Tax Assessment Act 1997* (Cth), or whether it was an expense of a revenue nature, deductible in the year it was incurred. A related issue was whether, if the expenditure was capital, it could be treated as a depreciating asset under Division 40 of the *Income Tax Assessment Act 1997* (Cth).

Justice Cooper considered the established principles for distinguishing between capital and revenue expenditure, particularly the "profit-earning structure" test and the "once and for all" expenditure test. Her Honour found that the acquisition of intellectual property was an enduring asset that formed part of the applicant's profit-earning structure, rather than an expense incurred in the day-to-day carrying on of its business. Consequently, the expenditure was of a capital nature. The Court also determined that the intellectual property rights acquired did not fall within the definition of a depreciating asset under Division 40, as they were not "intangible assets" as defined in that Division.

The application was dismissed.

Orders