Ashley Chase Estate Limited v Spanish Foods (Aust) Pty Ltd

[2013] ATMO 104

TRADE MARKS ACT 1995

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

Re:Opposition by Ashley Chase Estate Limited to registration of trade mark application 1436708(29) - FORD FARM TRADITIONALLY HANDMADE Logo - filed in the name of Spanish Foods (Aust) Pty Ltd.

Delegate:

Nicole Worth

Representation:

Opponent: David Stewart of Wrays Lawyers, instructed by Nico de Jong also of Wrays Lawyers.

Applicant: not present and no written submissions provided.

Decision:

2013 ATMO 104

Section 52 opposition – grounds of opposition under sections 42, 58, 59, 60 and 62A pursued – section 62A established – registration refused.

Background

1. This is an opposition brought by Ashley Chase Estate Limited (‘the Opponent’) pursuant to section 52 of the Trade Marks Act 1995 (‘the Act’) to the registration of the trade mark the subject of application number 1436708 in the name of Spanish Foods (Aust) Pty Ltd (‘the Applicant’).

2. Relevant details of the opposed application are as follows:

Trade Mark:   (‘the Trade Mark’)

Filing date:  14 July 2011

Owner:                Spanish Foods (Aust) Pty Ltd

Goods:  Class 30: Blended cheese; blue cheese; butter cheeses; cheddar cheese; cheese; cheese based products containing fruit puree; cheese containing herbs; cheese containing spices; cheese fondue; cheese for grilling; cheese for toasting; cheese in powder form; cheese in the form of dips; cheese mixtures; cheese products; cheese spreads; cheese sticks; cheese toppings for pizzas; cheese wedges; combinations of cheese and fruit; combinations of cheese and meat; combinations of cheese and vegetables; cottage cheese; cream cheese; curd cheese; fresh cheese; goat's milk cheese; imitation cheese; low fat cheese; non-dairy cheese; preparations of cottage cheese; prepared foods consisting principally of cheese; prepared meals made principally of cheese; processed cheese; processed cheese products; ready grated cheese; soft cheese; soft cheese preparations

1. The application was examined and accepted for possible registration. Acceptance was advertised in the Australian Official Journal of Trade Marks on 10 November 2011.

2. On 8 February 2012 the Opponent filed a notice of opposition to the registration (‘the Notice’). The Notice nominated grounds of opposition under sections 42, 58, 58A, 59, 60 and 62A of the Act.

3. Following the service of evidence, described in more detail below, the matter was set down to be heard. I heard the matter, as a delegate of the Registrar of Trade Marks, in Canberra on 8 November 2013. David Stewart of Wrays Lawyers, instructed by Nico de Jong also of Wrays Lawyers, represented the Opponent at the hearing. The Applicant did not attend the hearing, nor did it provide any written submissions for consideration.

Evidence

1. The only evidence served and filed in respect of this matter is the Opponent’s evidence in support, which comprises statutory declarations by:

   ·     Michael John Pullin, Managing Director of the Opponent, with exhibits MJP1 to MJP8, made 31 January 2013.

   ·     Nico Gjalt de Jong, Lawyer with Wrays Lawyers, with annexure NDJ-1, made 5 February 2013.

2. The Pullin declaration sets out facts and events relevant to this matter, and the de Jong declaration addresses an error in exhibit MJP8 of the Pullin declaration.

3. Michael Pullin is the Managing Director of the Opponent, a cheese producing business in the United Kingdom. Mr. Pullin set up a dairy under the name “Ford Farm Dairy” in the UK in 1983 and commenced the production of cheese under the trade mark FORD FARM in that year. In 1990 he joined the Opponent and in 1996 transferred to it the cheese production business from Ford Farm Dairy. The Opponent commenced selling FORD FARM branded products in 1996, using the words together with a banner device as depicted below[1]. It has done so continuously to the present time.

   [1] It appears from the evidence that the words in small text underneath the banner device vary. For example the trade mark depicted here includes the words “Cheesemakers since 1972”, whereas the trade mark displayed upon the Opponent’s invoices includes the words “traditionally handmade”.

4. This is the primary trade mark used by the Opponent, which may be supplemented by secondary trade marks that refer to specific cheeses. Mr. Pullin says that the plain text words FORD FARM have also been used as a trade mark since 1996, which was applied for as a European Community Trade Mark in 2003 and subsequently registered. In this decision I will refer to the above logo and the plain text words FORD FARM collectively as ‘the Opponent’s trade marks’.

5. Mr. Pullin provides details of promotional expenditure, although the figures given are not specific to Australia. He says that the Opponent’s trade marks have been advertised in a number of specialty food magazines and that the Opponent has won a number of awards for its cheeses, as well as the Queen’s Award for Enterprise.

6. Approximately one third of the cheese to which the Opponent applies the FORD FARM trade mark is exported from the United Kingdom to countries including Australia. The Opponent first exported such cheese to Australia on 25 June 2010 and has done so continuously since. Mr. Pullin provides figures for the volume of cheeses exported to Australia and their respective wholesale values, which are considerable. The primary importer of the Opponent’s cheese into Australia is the wholesaler COSTCO®, which then on-sells the cheese through outlets in Sydney, Canberra and Melbourne.

7. On 18 March 2009 Mr. Pullin met with Mr. Peter Paphitis at the International Food Exhibition in London. Mr. Paphitis was representing the entity ‘Capital Foods’, a business based in Australia. He is also the sole director of the Applicant. Following the meeting Mr. Paphitis visited the Opponent in Dorset and toured its production facilities, during which he was given information about the variety of cheeses that the Opponent could supply to Capital Foods.

8. Mr. Pullin says that in June 2009 the Opponent sent product samples to Capital Foods in order to ascertain market acceptability. In June 2010 a “Customer Details Form” was completed on behalf of Capital Foods, which is a form used by the Opponent for potential new distributors. In it Mr. Paphitis is named as “buyer” and he provides two trade references to support his “application for credit facility”.

9. A second meeting took place in London between Mr. Paphitis, Mr. Pullin and the Opponent’s Commercial Director Mr. Greg Parsons, on 5 August 2010. There, further discussions were held in regard to Capital Foods selling the Opponent’s FORD FARM branded products, including cheeses under various sub brands including OAKWOOD, BILLIES, CAVE AGED CHEDDAR, COASTAL and DORSET GOLD. Minutes for this meeting indicate that there was a “current range [of cheeses] sold”, presumably to Mr. Paphitis and/or Capital Foods, and that a range of further samples as well as 200 “Ford Farm Leaflets” were to be supplied by the Opponent.

10. Two invoices for sales to Capital Foods are in evidence. They are for commercial quantities of various cheeses and dated 3 September 2010 and 28 March 2011. The trade mark displayed upon them is substantially identical to that applied for in the subject application, namely:

11. A third meeting with Mr. Paphitis took place in London in “the autumn of 2011” (presumably the UK autumn). Mr. Pullin says that by this time several trade mark applications had been filed in Australia by either Capital Foods or the Applicant for FORD FARM (in either plain text or the composite banner device) and several of the sub brands used by the Opponent including “Coastal Cheddar” and “Dorset Gold”. Mr. Paphitis failed to inform the Opponent of the filing of these applications, despite them having occurred prior to this third meeting in London. A similar situation has apparently arisen involving the Applicant and another prominent cheesemaker in the UK, Wyke Farms, wherein the Applicant applied for registration of the trade mark “Wyke Farms” in respect of cheeses. That application has since been refused under the provisions of section 58 of the Act.

12. Mr. Pullin says that the Opponent attempted to resolve the dispute with Mr. Paphitis with a “without prejudice” settlement offer, to which Mr. Paphitis did not respond, and through direct negotiation, which did not elicit any “valid” response.

Grounds and onus

1. The Opponent pressed the grounds of opposition under sections 58, 62A, 59, 60 and 42 at the hearing. It advised that it was not relying upon the ground under section 58A, and for completeness I find that the ground has not been established.

2. I proceed on the basis that the Opponent bears the onus of establishing at least one of the grounds on the ordinary civil standard of the balance of probabilities[2] and that the date at which the rights of the parties are to be determined is the date the application was filed.[3] For reasons that will become clear I have found it only necessary to discuss the ground under section 62A.

   [2] See Pfizer Products Inc v Karam [2006] FCA 1663; 70 IPR 599 per Gyles J at [6] to [26]; Chocolaterie Guylian N.V. v Registrar of Trade Marks [2009] FCA 891; (2009) 82 IPR 13 per Sundberg J at [22] to [26]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051; (2011) 198 FCR 435 per Greenwood J at [16] to [32]; and Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (2012) 94 IPR 551 per Dodds-Streeton J at [13].

   [3] Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 595.

Section 62A

1. Section 62A of the Act provides:

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

2. In determining what constitutes bad faith, Dodds-Streeton J in Fry Consulting Pty Ltd v Sports Warehouse (No 2)[4] commented:

   Bad faith, in the context of s62A, does not, in my opinion, require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.

   The formulation in the United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison [Harrison’s Trade Mark Application [2005] FSR 10, in which the “combined test” of bad faith was said to involve both subjective and objective elements].

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

   The question is whether, in all the particular circumstances, the applicant’s knowledge was such that his decision to apply for registration at the relevant date would be regarded as in bad faith by persons adopting proper standards.

   [4] [2012] FCA 81; (2012) 94 IPR 551, at [164].

3. Applying this question to the circumstances before me, the question is whether the Applicant’s knowledge was such that its decision to apply for registration of the Trade Mark on 14 July 2011 would be regarded as in bad faith by persons adopting proper standards. I note also that in DC Comics v Cheqout Pty Ltd[5] Bennett J observed that the decisions, and therefore the mental state, of the sole director of a company is attributable to the company itself. As sole director of the Applicant, the mental state of Mr. Paphitis is attributable to the Applicant.

   [5] [2013] FCA 478; (2013) 101 IPR 334, at [73].

4. Additionally the Applicant has elected to remain silent throughout the opposition. Of itself an applicant’s silence says little because there may be many reasons it elects not to participate, including that it believes the case against it is not strong enough to require a response. Nonetheless where an opponent has established a prima facie case, a response from the applicant may be required. I bear in mind also the observation of the High Court in Jones v Dunkel[6]:

   (i) that the absence of the defendant Hegedus as a witness cannot be used to make up any deficiency of evidence; (ii) that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence; (iii) that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.

   [6] [1959] HCA 8; (1959) 101 CLR 298.

5. Therefore, although I approach the Opponent’s version of events (particularly where not supported by documentary evidence) with a degree of caution, in the absence of any rebuttal from the Applicant I consider it reasonable to draw certain inferences, as follows.

6. The Applicant was aware of the Opponent’s use of the trade mark FORD FARM and the banner device – such is evident from the invoices of sale to the Applicant, which are dated well prior to the filing date of the application.

7. It is not explicitly clear whether, per the UK case William Leith New Century Marquees[7], the Applicant and/or Mr. Paphitis ever recognised the Trade Mark as the property of the Opponent. However I consider it improbable that, during the course of the meetings that took place between the parties, Mr. Paphitis believed the Opponent was surrendering its title to the Trade Mark in its efforts to distribute its goods in Australia. This is particularly so given the Opponent had already, by the time of the second meeting between the parties and by the time the application was filed, exported to Australia commercial quantities of its cheeses.

   [7] SRISO/018/00, UK Registry, p.9.

8. I also consider it improbable that Mr. Paphitis believed the Applicant could properly assert to be the owner of the Trade Mark, or any of the Opponent’s sub brands, in Australia (by the filing of this and the related applications). Were this the case there would be no reason to fail to bring those applications to the Opponent’s attention at some point during their negotiations. That the Applicant did not do so implies bad faith on the face of it.

9. Lastly, I am not satisfied that the Applicant’s actions, or Mr. Paphitis’ actions, amount to mere opportunistic behavior. Prior to the filing of the application Mr. Paphitis formed a business relationship with the Opponent. He had a number of dealings with the Opponent with a view to being a distributor of the Opponent’s goods in Australia. He imported into Australia, through either Capital Foods or the Applicant, commercial quantities of the Opponent’s goods. Through the Applicant he has chosen to apply for a trade mark not merely similar, but substantially identical to that of the Opponent. All of these factors amount to more than exploitive behavior designed to “acquire a springboard for a fledgling business”[8], but rather to conduct that is “of an unscrupulous, underhand or unconscientious character”[9].

   [8] Fry Consulting, above n. 4.

   [9] Fry Consulting, above n. 4.

10. For these reasons I am satisfied that “a reasonable man standing in the shoes of the Applicant should be aware that he ought not to apply for trade mark registration”[10]. As such, the ground of opposition under section 62A is established.

    [10] As per the delegate in Hard Coffee Pty Ltd v Hard Coffee Main Beach Pty Ltd [2009] ATMO 26; [2009] AIPC 92-343.

Decision and costs

1. Section 55 of the Act provides:

   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 established a ground of opposition under the Act. I therefore refuse to register trade mark application 1436708.

3. Costs generally follow the event, and given there is no apparent reason to depart from this principle I award costs against the Applicant.

Nicole Worth

Hearing Officer

Trade Marks Hearings

18 December 2013