ASep Healthcare Ltd v Multigate Medical Products Pty Ltd

[2015] ATMO 24

TRADE MARKS ACT 1995

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

Re:Opposition by ASEP Healthcare Ltd to registration of trade mark application 1477979(10) - TOURNI TAPE (Logo) - filed in the name of Multigate Medical Products Pty Ltd.

Delegate:

Iain Campbell Thompson

Representation:

Opponent: Marcus Fleming of Counsel instructed by Kellick Smith and Phoebe Vertigen of Ashhursts

Applicant: Spiro Pappas of Chrysilliou

Decision:

2015 ATMO 24

S52 opposition to registration – grounds under sections 60, 42(b), 58 and 62A unsuccessful

Background

1. In this matter Multigate Medical Products Pty Ltd (‘the Applicant’) has applied under the Trade Marks Act 1995 (‘the Act’) to register the trade mark which appears below:

Application No: 1477979

Priority Date:  28 February 2012

Goods:Class 10: Surgical and medical apparatus and instruments; suture materials; compression goods in this class; compression bandages; bandages in this class; bandages for medical purposes; bandages for surgical purposes; tourniquets

Trade Mark:  

(‘the Trade Mark’)

1. The application was examined as mandated by section 31 of the Act and advertised as accepted for possible registration on 21 June 2012 in the Australian Official Journal of Trade Marks.

2. On 20 September 2012, ASEP Healthcare Ltd, (‘the Opponent’) filed Notice of Opposition (‘the Notice’) to the registration of the Trade Mark. The Notice is couched in broad terms and contains the grounds under sections 42(b), 58, 60 and 62A of the Act which were argued at a hearing of the matter. For the sake of completeness I note both that the grounds not relied upon are not established and that, should there be an appeal from this decision, any ground may be relied upon whether mentioned in the Notice or not.

3. The hearing was before me as a delegate of the Registrar of Trade Marks in Canberra on 9 December 2014.  Marcus Fleming of Counsel instructed by Kelleck Smith and Phoebe Vertigan of Ashhursts represented the Opponent; Spiro Pappas of Chrysilliou IP represented the Applicant.

Onus and Relevant Date

1. The Opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities.[1]

   [1] Pfizer Products Inc v Karam [2006] FCA 1663; 237 ALR 787; (2006) 70 IPR 599; [2006] AIPC 92-146 per Gyles J at [6] to [26]; Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891; (2009) 180 FCR 60; (2009) 258 ALR 545; (2009) 82 IPR 13; [2009] AIPC 92-355 per Sundberg J at [22] to [26]; Sports Warehouse, Inc v Fry Consulting Pty Ltd [2010] FCA 664; (2010) 87 IPR 300 per Kenny J at [30] to [40]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051; (2011) 198 FCR 435; (2011) 283 ALR 743 per Greenwood J at [16] to 32]; Allergan, Inc v Di Giacomo [2011] FCA 1540; (2011) 199 FCR 126; 94 IPR 541 per Stone J at [11] to [12]; Tricarico v Dunn Bay Holdings Pty Ltd [2012] FCA 271 per McKerracher J at [9] to [10]; Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81; ( 2012 ) 94 IPR 551 per Dodds-Streeton J at [13]; DC Comics v Cheqout Pty Limited [2013] FCA 478 per Bennett J at [13]; and, most recently, Phone Directories Company Australia Pty Ltd v Telstra Corporation Limited [2014] FCA 373 per Murphy J at [30] to [37].

2. The relevant date at which the grounds must be considered is the filing date of the application.[2]

   [2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; The Seven Up Company v O.T. Limited (1947) 75 CLR 203 at 211; Rael Marcus v Sabra International Pty Ltd (1995) 30 IPR 261 at 266.

Evidence

1. The evidence was served and filed in accordance with the Trade Mark Regulations 1995 and comprises the following declarations:

   In Support

   Alan Edwards, Chairman and Chief Executive Officer of the Opponent, made on 16 May 2013

   In Answer

   Ben Chen, General Manager of the Applicant, made on 13 February 2014

   Michael O'Brien, National Sales Manager of the Applicant, made on 13 February 2014

   Spiro Pappas, Principal, Chrysiliou IP, 13 February 2014

   In Reply

   Alan Edwards, Chairman and Chief Executive Officer of the Opponent, 27 June 2014

   Kellech Smith, Partner, Ashurst Australia, 30 June 2014

2. In brief, the evidence establishes that the Opponent, in the United Kingdom, devised a disposable medical tourniquet.  This tourniquet is a strip of plasticized paper with plastic peel backing which reveals an adhesive area by means of which it is bound around the limb of a patient who is going to give blood, or a blood sample.  The Opponent applied for patents in various countries including Australia and adopted the trade mark TOURNISTRIP to use in relation to this product.

3. The Applicant, an Australian medical supplies distributor, agreed with the Opponent to be its exclusive distributor of the product for a period of nine months.  The agreement which is dated 19 May 2011 states in part:

   A thorough understanding of the market and the market needs, a sales forecast for three years and an understanding of what other countries could be brought into the arrangement to enable the parties to agree either a Distribution Agreement or a License Agreement enabling local manufacture.

   [The Opponent] undertakes to [the Applicant] that for the duration of this Agreement it will not sell or provide the product to any other entity in Australia (unless requested or agreed by [the Applicant]) and [the Opponent] will continue to forward all enquiries it receives from Australia to [the Applicant]. [The Opponent] also gives [the Applicant] the exclusive option to negotiate a further agreement between the parties.

4. The agreement established the price of the product under the trade mark TOURNISTRIP and provided that the exclusive distribution by the Applicant would be dependent on the sale of particular quantities of the product, allowing the Opponent to terminate the agreement if these particular quantities were not sold.

5. I note that this agreement had a finish date on 19 February 2012: prior to the filing of the Trade Mark by the Applicant on 28 February 2012.

6. There were, according to the Applicant, problems with the distribution of the TOURNISTRIP product.  Mr Chen states:

   From the very beginning of the relationship with [the Opponent], the price of the TOURNISTRIP product was an issue with [the Applicant]. It was [the Applicant’s] belief that the TOURNISTRIP product was simply priced too high for the Australian marketplace. This was confirmed by the fact that minimal orders were placed by parties to purchase the TOURNISTRIP product from [the Applicant].

7. This account is corroborated by Mr O’Brien who states:

   Initially, a few of the contacts in the Australian medical marketplace that were approached by [the Applicant] showed interest in the TOURNISTRIP product, hence my comments in my email of 9 February 2011 (Confidential Annexure AE-18 to the Edwards Declaration) to the effect that [the Applicant] was getting a few requests for samples already and in my email of 23 March 2011 (Confidential Annexure AE-19 to the Edwards Declaration) to the effect that [the Applicant] was receiving great feedback, that there was a lot of interest in the product and that stock was needed for trials and a full market launch. [The Applicant] required samples in order to run full trials with customers so as to ensure that the TOURNISTRIP product worked as described by [the Opponent] to [the Applicant]. "Full market launch" essentially meant that [the Applicant] would advertise the product nationally and that sales staff would effectively be directed to place the product under their arms and take it out to the market.

   […]

   My belief is that while the TOURNISTRIP product appeared to be a good product, it was simply priced too high for the Australian marketplace and that is why [the Applicant’s] contacts in the Australian medical marketplace did not follow up their initial interest in the product with the placement of substantial orders.

8. Mr Chen and Mr O’Brien also state that the Applicant offered various solutions to the Opponent such as manufacturing under license or manufacturing offshore in China which did not receive responses. 

9. The Opponent also told the Applicant that it was considering abandoning its patent applications.  Mr Chen says:

   During the face-to-face meeting between [Applicant and the Opponent] in November 2011, [the Opponent] stated to [the Applicant] to the effect that [the Opponent’s] applications for its patent were facing difficulties in other countries and that it was considering abandoning the application for its patent in Australia. The abandonment of the patent application in Australia, would mean that no patent protection would be afforded, indirectly, to [the Applicant] if it would commence distribution of the TOURNISTRIP product.

10. The Applicant, states Mr Chen, accordingly formed the view that the Opponent was not interested in the long term development of the product in Australia and, he states, the Applicant terminated the agreement with the Opponent by email dated 27 June 2012.  I note that the agreement had, in fact, a termination date of 19 February 2012.

11. It is convenient to discuss the balance of the evidence as it becomes relevant to my decision.

Section 60

1. Section 60 of the Act provides:

   60Trade 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.

   Note:For priority date see section 12.

2. In order to establish this ground the Opponent must establish to my satisfaction firstly that the Trade Mark has a reputation in the relevant marketplace and secondly that because of that reputation the Applicant’s use of the Trade Mark would confuse or deceive.

3. The Opponent has provided no evidence of the reputation of the Trade Mark in Australia by way of declarations by those in the marketplace and relies on the number of products bearing the Trade Mark that it supplied to the Applicant. The Applicant, for its part states that very few products were sold and many of those supplied were given away as samples.  Mr O’Brien says:

   On receiving the TOURNSTRIP product from [the Opponent], [Applicant] placed the TOURNISTRIP product into cartons to be sold or given away as free samples, with each carton consisting of five boxes. Each box contained 200 strips. [The Applicant’s] accounting records show that, in total, [the Applicant] only sold about 88 cartons. The remainder of the TOURNISTRIP product that [the Applicant] obtained from [the Opponent] was given away as free samples.

   The 158,400 units of the TOURNISTRIP product purchased by [the Applicant] from [the Opponent] was well short of the minimum purchase target of 400,000 to 500,000 units as set out in the agreement.

4. While these figures suggest that some 70,400 goods were given away, I would be hesitant to conclude that these ‘give-aways’ were not goods in trade as they were provided to customers to encourage sales of goods bearing the Opponent’s TOURNISTRIP trade mark.

5. Concerning the assessment of reputation, in McCormick & Co Inc v McCormick [2000] FCA 1335; (2000) 51 IPR 102; [2000] AIPC 38-192 Kenny J said at [86]:

   In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product: see, e.g., Isuzu-General Motors Australia Ltd v Jackeroo World Pty Ltd (1999) 47 IPR 198; Marks & Spencer plc v Effem Foods Pty Ltd (2000) AIPC 91-560; Photo Disc Inc v Gibson (1998) 42 IPR 473; and RS Components Ltd v Holophane Corp (1999) 46 IPR 451. This Court has followed this approach as well, acknowledging that public awareness of and regard for a mark tends to correlate with appreciation of the products with which that mark is associated, as evidenced by sales volume, amongst other things. Thus, in Toddler Kindy Gymbaroo Pty Ltd v Gymboree Pty Ltd [2000] FCA 618 ("Gymboree"), Moore J accepted at [94] that the applicant had established a reputation for the purposes of s 60 solely on the basis of use and promotion of the relevant mark. Another example of this approach is Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd (1997) 38 IPR 495 ("Nettlefold"), in which Heerey J relied upon the public visibility of the applicant's mark over approximately two decades as well as a $100,000 promotional campaign in finding that a reputation for the purposes of s 28 of the 1955 Act existed.

6. Kenny J also stated in McCormick at [81]:

   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?

7. Concerning specialized markets, in Le Cordon Bleu B. V. v Cordon Bleu International Ltee [2000] FCA 1587 Heerey J said that the reputation required to be demonstrated was to be:

   …one of which a significant number of persons were aware ... What is 'significant' or 'substantial' will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient.

8. The Applicant submits that:

   The First Edwards Declaration states at paragraph 25 that:

   " ... As a rough general rule, it is estimated by ASep that the number of times a tourniquet is used in a developed country per annum is equal to the population of that country."

   The Australian Bureau of Statistics publication "Australian Historical Population Statistics, 2014", shows that as at 2001, the population of Australia was 19,274,701. Therefore, in the words of the First Edwards Declaration, over 19 million tourniquets would have been used in Australia per annum at the Priority Date.

9. This evidence is unchallenged by the Opponent but bears the flaw that the majority of usages of tourniquets at the priority date were of non-paper tourniquets and that therefore the marketplace for paper tourniquets was then quite low.

10. There is no direct information before me about the size of the marketplace for these goods so that the significance of the presence of 158 or so cartons of goods bearing the Opponent’s trade mark within the marketplace can be gauged.  It seems clear that the marketplace is primarily comprised of private pathology practices and public and private hospitals the latter of which may or may not also include pathology departments.  Additionally some medical practices may use the goods.  I have attempted to inform myself in terms of regulation 21.15(4) about the potential size of the marketplace for tourniquets.

11. In 2009–10, there were 1,326 hospitals[3] in Australia:

    736 public acute hospitals

    17 public psychiatric hospitals

    293 private day-only hospitals

    280 other private hospitals.

    [3] >

    According to the Australian Bureau of Statistics (‘ABS’),[4] there were 50 businesses operating pathology laboratories in Australia at the end of June 2002. These businesses received income of $1,243.1m during 2001–02 and employed 14,534 persons at the end of June 2002. Industry value added was $785.2m, contributing 0.1% to GDP.

    [4] >

    Some of these pathology businesses do, in my observations, operate multiple shopfronts and if one conservatively estimates 10 employees per shopfront, a conclusion that in 2002 there were some 1,400 pathology shopfronts in Australia seems reasonable.  Obviously, this number of shopfronts would have grown by the relevant date some ten years later.

12. And, again according to the ABS,[5] in June 2002, there were 19,464 GP and specialist medical practices in Australia, comprising 9,600 GP and 9,864 specialist practices. These medical practices operated from 28,676 locations and had employment of 101,957 persons.

    [5] >

    The size of the potential marketplace for the goods at the relevant date in Australia, if my guestimates are within the ballpark, was considerable – some 1300 hospitals and either at least 1400 pathology shopfronts (or some 50 businesses which then operated those shopfronts) and in excess of 19,000 medical practices.  Thus the Applicant’s claim of a potential market of some 20 million tourniquet usages per annum in Australia appears reasonable.

13. Accordingly, while the quantity of the goods bearing the Opponent’s trade mark in their Australian marketplace appears high, in reality (whether they were sold/given away in boxes of 200 or cartons of 1000), the presence of the goods bearing the Opponent’s trade mark in the marketplace was slight and apparently of short duration.  It is, I consider, fair to conclude that the number of goods bearing the Opponent’s TOURNISTRIP trade mark sold or given away by the Applicant was, in the context of the marketplace at the relevant date, insignificant.

14. The Opponent has therefore not established the first leg of its ground under section 60 to my satisfaction – that the trade mark upon which it relies had a reputation in Australia at the priority date.

15. The ground under section 60 is not established.

Subparagraph 42(b)

1. Subparagraph 42(b) of the Act provides that ‘An application for the registration of a trade mark must be rejected if … its use would be contrary to law’

2. The Opponent relies on sections 18 and 29 of the Australian Consumer Law 2010 (‘the ACL’) and the common law tort of passing off.

3. However, in the circumstances of this matter, if the Opponent has not established that the use of the Trade Mark would be likely to deceive or cause confusion in terms of section 60, it follows that neither can it establish that the use of the Trade Mark would ‘mislead or deceive’ under the ACL (or its common law equivalent), which is a higher standard. In Parkdale Custom Built Furniture Pty. Limited v Puxu Pty Limited [1982] HCA 44; (1982) 42 ALR 1, Gibbs CJ said (at page 6):

   The words of s. 52 require the court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive . . . . . The words “likely to mislead or deceive”, which were inserted by amendment in 1977, add little to the section; at most they make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone. In McWilliams v. McDonalds [1980] FCA 159; (1980) 33 A.L.R. 394 it was rightly held by Smithers J. and by Fisher J. that to prove a breach of s. 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source, and that Southern Cross Refrigerating Co. v. Toowoomba Foundry Pty Ltd (1954) 91 C.L.R. 592, a decision on the Trade Marks  Act 1905 (Cth) as amended, is distinguishable: I need not add to what their Honours said on this subject (33 A.L.R.) at 397-8 and 412-3. I agree too with those learned judges that the court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive, and that evidence that members of the public have actually been misled is not conclusive: see at 399-400 and 413-4. I would add that evidence that members of the public were misled, not by any conduct of the defendant, but by other circumstances for which the defendant was not responsible, would be quite irrelevant.”

In the same case Mason J. said (at page 15):

“. . . the onus is on the plaintiff to show that the conduct is likely to mislead or deceive. Therefore conduct which merely causes some uncertainty in the minds of relevant members of the public does not breach s. 52.”

1. The opposition under subparagraph 42(b) is not established.

Section 58

1. Section 58 of the Act provides:

   58Applicant not owner of trade mark

   The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

   Note:For applicant see section 6.

2. In a contest of this type, the owner of an impugned trade mark is the person who has first authored[6] and publically used that trade mark[7] (or one at least substantially identical[8] to it) in relation to particular goods or services (or goods or services which are the ‘same kind of thing or are ‘of like kind’)[9] or has applied to register it for those goods or services – whichever is the earlier.

   [6] Shell Co (Aust) Ltd v Rohm and Haas Co [1948] HCA 27; (1948) 78 CLR 601 at 625 and 627.

   [7] Buying Systems (Australia) Pty Ltd v Studio Srl [1995] FCA 1063; (1995) 30 IPR 517

   [8] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495; (1994) 31 IPR 375; [1994] AIPC 91-049

   [9] In re Hicks’s Trade Mark (1897) 22 VLR 636; Jackson & Co v Napper (1886) 35 Ch D 16

3. The Opponent thus argues that it had the first use of the TOURNISTRIP trade mark via the Applicant’s distribution of its identical goods and that the trade marks TOURNISTRIP and TOURNI TAPE are substantially identical.

4. There is no argument that the goods involved here are not the same or that the Opponent’s claim rightly stems from the Applicant’s distribution of those goods bearing the trade mark TOURNISTRIP.  Where the debate lies is whether the trade marks TOURNISTRIP and TOURNI TAPE are substantially identical.

5. In Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407; [1962] ALR 304; 35 ALJR 355; 1B IPR 523 Windeyer J said of substantial identity at [12]:

   In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. "The identification of an essential feature depends", it has been said, "partly on the Court's own judgment and partly on the burden of the evidence that is placed before it": de Cordova v. Vick Chemical Co. (1951) 68 RPC 103, at p 106. Whether there is substantial identity is a question of fact: see Fraser Henleins Pty Ltd v. Cody [1945] HCA 49; (1945) 70 CLR 100, per Latham C.J. (1945) 70 CLR, at pp 114, 115, and Ex parte O'Sullivan; Re Craig (1944) 44 SR (NSW) 291, per Jordan C.J. (1944) 44 SR (NSW), at p 298 , where the meaning of the expression was considered.

6. The Opponent submits that:

   The TOURNI TAPE Mark creates a "total impression of similarity" with the Opponent's TOURNISTRIP mark. Further, the goods specified for the Opposed Application are the same as (or very similar to) those in connection with which the Opponent's TOURNISTRIP mark was used prior to 28 February 2012 (being the filing date of the Opposed Application). The similarities between the Opponent's TOURNISTRIP mark and the Applicant's TOURNI TAPE Mark are discussed in detail in paragraphs 5.10 to 5.13 above.

   The essential feature of the TOURNI TAPE Mark and the Opponent's TOURNISTRIP mark is the prefix "TOURNI". What follows is, to an extent, descriptive of the goods in respect of which the respective marks have been, and will be, used. That this is the impression created by the two trade marks is reinforced by the First Examination Report received by the Opponent for Trade Mark Application No. 1524906 for TOURNISTRIP, in which the Examiner stated that "[the TOURNISTRIP Mark] closely resembles the [TOURNI TAPE Mark] because the prefix TOURNI followed by a descriptive word element is likely to be seen as a brand variation".

   The use of the word "TAPE" in the Opposed Application conveys the same meaning as the word "STRIP" in the Opponent's TOURNISTIP mark. The Macquarie Dictionary defines the words in the following way:

   (a) STRIP – "a narrow piece, comparatively long and usually of uniform width: a strip of cloth; a strip of metal; a strip of land."

   (b) TAPE – "a long narrow strip of linen, cotton, or the like, used for tying garments, etc."

   Further, the word "TAPE" in the Opposed Application and the word "STRIP" in the Opponent's mark refer directly to the similar goods of the parties (in respect of which the relevant marks have been and will be used).

   The appearance of the Applicant's TOURNI TAPE Mark (in a stylised form) does little (if anything) to distinguish that mark from that of the Opponent. Similarly, the break between the words "TOURNI" and "TAPE" does not distinguish the Applicant's TOURNI TAPE Mark from the Opponent's TOURNISTRIP mark.

7. The question of whether the trade marks in question are substantially identical must be viewed in the light of the type of trade marks that they are.  There is some superficial attraction in the view that the essential element of the trade marks is the element TOURNI: the parties are the only persons with pending trade marks on the ATMOSS database with this element in Class 10.  To that extent the element TOURNI was unique to the Opponent when it was first used in Australia as a part of the Opponent’s TOURNI STRIP trade mark.

8. However, in my consideration the better view is to draw an analogy from section 24 of the Trade Marks Act 1955 and observe that, considered in relation to the goods, neither trade mark is ‘invented’.  Both have meanings (as regards their prefixes and suffixes) which are obvious to those in the trade when considered in relation to the goods: Howard Auto-Cultivators Ltd v Webb Industries Pty Ltd [1946] HCA 15; (1946) 72 CLR 175. It is of little matter that the Opponent might have been the first to use the prefix: it is plainly descriptive and will be understood by those in the marketplace as it is intended to be. It becomes difficult to conclude that the element TOURNI is indeed the essential feature of the trade mark as that would infer that the Opponent has some rights in the element TOURNI which its descriptiveness and obviousness of derivation militate against.

9. There is also the bi-coloured lozenge device against which the words TOURNI TAPE appear in the Trade Mark.  While I bear in mind the strictures of the decisions footnoted[10] below, it is apparent that the device makes some contribution to the identity of the Trade Mark.

   [10] Bayer Pharma Pty Limited v Farbenfabriken Bayer Aktiengesellschaft [1965] HCA 71; (1965) 120 CLR 285; Fanfold Ltd’s Appn (1928) 45 RPC 325; British Milk Products Co Ltd’s Application (1915) 32 RPC 453; Standard Cameras Ltd’s Application (1952) 69 RPC 125; Blount Inc v Registrar of Trade Marks [1998] FCA 440; (1998) 40 IPR 498.

10. Accordingly, in my consideration, the trade marks before me draw their identities from both their prefixes and suffixes, there is no ‘essential feature’ and they are accordingly not substantially identical.

Section 62A

1. Section 62A provides:

   62AApplication made in bad faith

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

2. In DC Comics v Cheqout Pty Ltd [2013] FCA 478; (2013) 212 FCR 194; (2013) 299 ALR 110; (2013) 101 IPR 334 at [61] Bennett J discussed the decision of Dodds-Streeton J in Fry Consulting v Sports Warehouse Inc (No 2) [2012] FCA 81; (2012) 201 FCR 565:

   Justice Dodds-Streeton observed (at [163]) that the examples of bad faith given in the Explanatory Memorandum are predominantly, but not exclusively, manifestations of blocking or holding to ransom a party which is, at least in conscience, entitled to a mark. However, her Honour noted that the illustrations are merely inclusive and do not limit the breadth of the concept of bad faith. Her Honour observed (at [145]) that the bad faith must be at the time of the application, that the onus is on the opponent seeking to establish bad faith and that the standard of proof is on the balance of probabilities.

   Given limited Australian authority, her Honour (at [145]–[166]) also considered relevant authorities from the United Kingdom. These cases stated, relevantly:

   ·Bad faith is a serious allegation and the more serious the allegation, the more cogent the evidence required to support it.

   ·Bad faith does not require dishonesty.

   ·Bad faith is a combined test that involves subjective and objective elements. The subjective element refers to the knowledge of the relevant person at the time of making the application. The objective element requires the decision-maker to decide whether, in the light of that knowledge, the relevant person’s behaviour fell short of acceptable commercial standards.

   ·The question is whether the conduct falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area. It is whether the knowledge of the applicant was such that the decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.

   ·It is difficult to see how a person who applies to register, in his own name, a mark he has previously recognised as the property of a potential overseas principal can be said to be acting in accordance with acceptable standards of commercial behaviour. Combining the mark with the applicant’s own name is no answer to that criticism.

   ·The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading.

   ·All the circumstances surrounding the application to register the mark are relevant.

   ·An act of bad faith cannot be cured by an action after the date of application.

   Justice Dodds-Streeton concluded (at [164]) that bad faith in the context of s 62A does not require (although it includes) dishonesty or fraud and that it is a wider notion, potentially applicable to diverse species of conduct. Her Honour rejected the proposition that mere awareness that an overseas company owning the mark operated or intended to operate in Australia would amount to bad faith, concluding that this would be unduly absolute. Justice Dodds-Streeton instead adopted as a touchstone the United Kingdom formulation of conduct falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons (at [165]). Her Honour observed that the applicant’s mental state is also relevant, and stated (at [166]) that:

   ... 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.

3. The Applicant filed the Trade Mark on 28 February 2012 some 9 days after its agreement with the Opponent had expired on 19 February 2012.  Mr Chen says that the agreement was terminated by email on 27 June 2012.  It is not clear whether by this he was referring to a relationship between the parties having come to an end or whether he in fact believed that the agreement was at that time still in force.  If he believed that the agreement was still in force it would appear that the application was made in bad faith but this is by no means clear – the agreement having ended before the application to register the Trade Mark was filed.

4. Generally, it might be said that the circumstances surrounding the application could give rise to “a vague feeling of distaste for the Applicant or its business methods”[11].  The worst interpretation of the Applicant’s actions is that it saw that the Opponent’s goods sold under the TOURNISTRIP trade mark had potential, waited until the agreement had expired and the patent application had lapsed then applied to register the Trade Mark for the identical goods.  However, this interpretation does not sit well with the Applicant’s uncontroverted evidence that it tried to persuade the Opponent to either drop the price or to allow it to arrange for the offshore manufacture of the goods under contract.  This resounds more of normal business practice.

   [11] Per Cross, J. in the Rawhide case [1962] R.P.C. 133 at 142

5. While the evidence might be suggestive of a course of action that might amount to bad faith, it does not, on balance, establish bad faith to my satisfaction.

6. Accordingly, the Opponent has not established its ground under section 62A.

Decision

1. At the relevant date, section 55 of the Act provided:

   55Decision

   (1)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.

2. The Opponent has not established its opposition to the registration of the Trade Mark.

3. The Trade Mark 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

1. Cost may follow the event and I order costs against the Opponent at the scale set out in the regulations.

Iain Campbell Thompson

Hearing Officer

Trade Marks Hearings

3 March 2015