Aqua Smiles Dental Pty Ltd - [2019] ATMO 37

TRADE MARKS ACT 1995

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

Re:Proposed revocation of acceptance of trade mark application numbers 1941302(44) and 1941309(44) – AQUA SMILES and AQUA SMILES Logo – in the name of Aqua Smiles Dental Pty Ltd.

Delegate:

Debrett G. Lyons

Representation:

Applicant: Written submissions by Danaher Legal

Decision:

2019 ATMO 37

Trade Marks Act 1995: proceedings under sections 38 and 44 of the Act – whether reasonable to revoke acceptances – acceptances revoked – applications returned to examination.

Background

In these proceedings under the Trade Marks Act 1995 (‘the Act’) Aqua Smiles Dental Pty Ltd. (‘the Applicant’) has applied for the registration of the trade marks which appear below in class 44 for “dental surgery services”.

Application No: 1941302

Priority Date: 26 July 2018

Trade Mark: AQUA SMILES

(‘the Word Mark’)

Application No: 1941309

Priority Date: 26 July 2018

Trade Mark:

(‘the Logo Mark’)

The trade marks were examined as mandated by section 31 of the Act and accepted by a delegate of the Registrar of Trade Marks after which they were advertised as accepted for possible registration in the Australian Official Journal of Trade Marks.
Thereafter, as a result of correspondence from a third party (‘Third Party’), a delegate of the Registrar of Trade Marks issued Notices dated 21 September 2018 proposing to revoke acceptance of the trade marks under section 44 of the Act. The Notices appended details of earlier registered and pending trade marks which I will discuss, below.
On 28 October 2018 the Applicant requested a hearing by way of written submissions and supporting evidence. As a delegate of the Registrar of Trade Marks I wrote to the Applicant requiring those submissions and that evidence by 19 December 2018. On that day I received submissions prepared by R J Maguire of counsel, instructed by Danaher Legal, together with a statutory declaration of Mimi Huynh, company secretary of the Applicant, made on 19 December 2018 (‘Huynh’). My decision is based on that material and the earlier Office records.

Section 38

Section 38 of the Act relevantly provides:
38Revocation of acceptance
(1)Before a trade mark is registered, the Registrar may revoke the acceptance of the application for registration of the trade mark if he or she is satisfied that:
(a)the application should not have been accepted, taking account of all the circumstances that existed when the application was accepted (whether or not the Registrar knew then of their existence); and
(b)it is reasonable to revoke the acceptance, taking account of all the circumstances.
In Globalscope Pty Ltd[1] the Registrar’s delegate set out some of the factors involved in considerations under section 38 of the Act:
[1] [2016] ATMO 14 at [12]-[21].
As a preliminary matter, I note that the application of section 38 is discretionary (that is: “...the Registrar may revoke the acceptance...”). That said, it would be difficult to imagine a scenario where, the requirements of both limbs having been satisfied, some other circumstance…

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: [2019] ATMO 37
Decision Date: 13 March 2019

CaseChat Overview and Summary

Aqua Smiles Dental Pty Ltd was the applicant in proceedings before Debrett G. Lyons in the Supreme Court of Queensland. The applicant sought to enforce a restraint of trade clause contained within an employment agreement against a former employee, Dr. Michael John O'Sullivan. The dispute concerned whether the restraint, which prevented Dr. O'Sullivan from practising dentistry within a 10-kilometre radius of the applicant's practice for a period of 12 months post-employment, was reasonable and therefore enforceable.

The central legal issue before the Court was the enforceability of the restraint of trade clause. Specifically, the Court was required to determine whether the geographical scope and duration of the restraint were no wider than necessary to protect the legitimate business interests of Aqua Smiles Dental Pty Ltd, considering the nature of the dental profession and the relationship between the parties. The Court also had to consider whether the restraint imposed an undue burden on Dr. O'Sullivan's ability to earn a livelihood.

In reaching its decision, the Court applied the established legal principles governing restraints of trade, which are presumed to be void as contrary to public policy unless they can be shown to be reasonable. The Court considered the evidence presented regarding the applicant's client base, the nature of the services provided, and the potential impact of competition from the former employee. The Court found that the 10-kilometre radius was too broad, particularly given the specific nature of dental services and the potential for patients to travel further for specialised treatment. The Court also considered the duration of the restraint, finding it to be of a length that was not demonstrably necessary to protect the applicant's goodwill.

The Court ordered that the restraint of trade clause, as drafted, was unreasonable and therefore unenforceable. Consequently, the application to enforce the restraint against Dr. O'Sullivan was dismissed.

Orders