Australian Drafting & Design Pty Ltd v Raj Gohil

[2018] ATMO 18

TRADE MARKS ACT 1995

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

Re:Opposition by Australian Drafting & Design Pty Ltd to registration of trade mark application 1737120 (42) - AUSTRALIAN DESIGN & DRAFTING SERVICES (Logo) - in the name of Raj Gohil.

Delegate:	Decision on the Written Record Iain Campbell Thompson
Representation:	Opponent: Self represented Applicant: Self represented
Decision:	2018 ATMO 18 Trade Marks Act 1995 Section 52 opposition to registration; section 58 - trade marks substantially identical and services ‘the same kind of thing’ as those of the Opponent’s prior used trade mark; section 62A – Applicant had a previous relationship with the Opponent – application made in bad faith. Grounds under section 58 and 62A established. Registration refused

Background

1. In these proceedings under section 52 of the Trade Marks Act 1995 (‘the Act’) Raj Gohil (‘the Applicant’) has made application to register the trade mark which appears below:

Application No:         1737129

Priority Date:             25 November 2015
  (‘the Relevant Date’)

Services:Class 42: Advisory services relating to building design; Advisory services relating to industrial design; Advisory services relating to industrial engineering; Aeronautical design; Architectural consultation; Building design services; Civil engineering design services; Civil engineering drawing services; Commercial design services; Commercial interior design; Construction drafting; Design consultancy; Design engineering; Design of building interiors; Design of buildings; Design of business premises; Design of child care facilities; Design of industrial machinery; Design of industrial products; Design of kitchens; Design of land vehicle parts; Design of layouts for offices; Design of manufacturing apparatus; Design of new products; Design of office space; Design of packaging; Design of pipelines; Design of products; Design of restaurants; Design of road networks; Design of scale models and dioramas; Design of shopfittings; Design of shops; Design of sports facilities; Design of storage systems; Design of telecommunications apparatus; Design of telecommunications installations; Design of test apparatus; Design of tools; Design of vehicles; Design of watches; Design planning; Design services; Design services for architecture; Design services for artwork; Design services relating to civil engineering; Design services relating to interior decoration; Design services relating to printing; Drawing up of plans; Drawing-up of house plans; Electrical engineering services (design); Engineering; Engineering consultancy; Engineering design; Engineering drawing; Engineering feasibility studies; Engineering project management services; Engineering project studies; Engineering research; Engineering services relating to architecture; Engineering testing; House design; Industrial design; Industrial design styling; Industrial engineering design services; interior decor design; Interior decorating design; Interior design services; Kitchen design; Marine vehicle design; Mechanical engineering services (design); Pattern design; Preparation of architectural reports; Preparation of blueprints; Preparation of drawings; Preparation of engineering drawings; Preparation of engineering reports; Preparation of reports relating to architecture; Preparation of technical manuals; Product analysis; Product design; Product development; Product evaluation; Provision of engineering reports; Provision of engineers; Retail design services; Ship design; Shop design; Shopfitting design services; Structural engineering services (design); Technical drawing services; Technical engineering; Vehicle design services.

(‘the Services’)

Trade Mark:               

(‘the Trade Mark’)

1. The Trade Mark was examined as is mandated by section 31 of the Act and subsequently advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 21 April 2016.

2. On 12 April 2016, Australian Drafting & Design Pty Ltd (‘the Opponent’) filed a Notice of Intention to Oppose the registration of the Trade Mark; this document was subsequently rectified on 20 May 2016.

3. On 25 April 2016 the Opponent filed its Statement of Grounds and Particulars detailing grounds under sections 58, 60, 42, 43, and 62A of the Act.

4. On 26 May 2016 the Applicant filed a Notice of Intention to Defend.

5. On 6 June 2016 the Opponent filed its Evidence in Support of the opposition – this is a declaration by Nikos Athanasiadis, a/the director of the Opponent, made on 1 August 2016, with attachments.

6. On 26 December 2016 the Applicant filed its Evidence in Answer being a declaration by the Applicant made on 26 December 2016 with attachments.

7. The Opponent filed Evidence in Reply on 23 February 2018 being a further declaration, with attachments, made by Nikos Athanasiadis on 23 February 2017.

8. Both parties have been informed of their rights to be heard or to file written submissions – neither has availed themselves of these opportunities. Now, in order that the Registrar may discharge her obligation under section 55 of the Act to decide the matter, it has been passed to me, one of her delegates, for my decision based on the written record which is comprised of those materials mentioned in the foregoing paragraphs.

Onus and Relevant Date

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

2. The Relevant Date at which the grounds under section 52 of the Act must be considered is the filing date of the opposed application (whilst section 60 mentions the ‘priority date’, that date is here the same as the filing date).

Evidence

1. The evidence in this matter is extensive but, as the grounds under sections 58 and 62A are very obviously established by the Opponent, I will only discuss the evidence briefly as far as it is essential to those grounds.

2. The Opponent runs an agency that provides drafting services,[1] recruitment services,[2] and engineering services.[3]  Nikos Athanasiadis, a/the director of the agency, states that since 1994 the Opponent has provided its services under the following trade marks (which appear on its letterheads and other office stationery):

(‘Version 1’)

(‘Version 2’)

(‘Version 3’)

[1] AutoCAD, MicroStation Inventor, Revit, Solidworks F.E.A.

[2] EPCM, Drafters, Engineers, Estimators, Project Managers and many other professionals available to commence work immediately.

[3] Mechanical and Structural Engineering Design F.E.A &Certification

1. The trade mark immediately above also appears on the reverse of the Opponent’s business cards in the ‘clean’ form:

(‘the Opponent’s Trade Mark’)

1. I note that the development of the Opponent’s Trade Mark has been evolutionary rather than revolutionary and that, in terms of subsection 7(1) of the Act, the alterations or additions to the Opponent’s Trade Mark compared with (at least) Versions 2 or 3, above, do not substantially affect its identity.[4]

   [4] E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15; (2010) 241 CLR 144; (2010) 265 ALR 645; (2010) 86 IPR 224; (2010) 84 ALJR 352; [2010] AIPC 92-381.

2. It is not clear when the Opponent started using the Opponent’s Trade Mark in substantially its current form but it must have been by 17 September 2008 when the Applicant executed a sub-contractor’s agreement (‘the Agreement’) with the Opponent that bore the trade mark which appears below:

1. The Opponent’s Trade Mark appeared on stationery which the Applicant saw on a regular basis including upon time slips which he completed and returned to the Opponent.

2. On or about 23 November 2015 the Opponent issued a solicitor’s letter to the Applicant terminating the Agreement on the basis that he had allegedly breached a term of the Agreement by dealing with one of the Opponent’s clients directly.

3. I note that two days later, on 25 November 2015, the Applicant applied to the Australian Registrar of Trade Marks to register the Trade Mark.

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. Ownership of a trade mark may arise in two ways: firstly, by use of a sign as a trade mark; or, secondly, by the filing of an application for registration as a trade mark.  In the case of a dispute as to the ownership of a trade mark, the first person to publically use the trade mark in the course of trade in relation to particular goods or services, or to apply to register it as a trade mark for those goods or services (whichever is the earlier) is the owner of the trade mark.  In order to displace a statutory claim to ownership, an opponent must show first use of a trade mark which is at least substantially identical[5] to the impugned trade mark in relation to goods or services which are, as a minimum, ‘the same kind of thing’.[6]

   [5] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495; (1994) 31 IPR 375; [1994] AIPC 91-049 at [62].

   [6] Re Hicks’ Trade Mark [1897] VicLawRp 118; (1897) 22 VLR 636.

3. The Opponent commenced use of the Opponent’s Trade Mark at least eight years prior to the Relevant Date because it appears on the Agreement that the Applicant executed on 17 September 2008.

4. Discussing the expression ‘substantially identical’ in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd[7] (‘Shell’) Windeyer J said:

   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. Judging by the eye alone, as I think is proper for the determination of substantial identity …

   [7] [1963] HCA 66; (1963) 109 CLR 407; [1962] ALR 304; 35 ALJR 355; 1B IPR 523 at [12].

5. In Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd[8] (‘Insight’) the Full Bench observed:

   The required exercise of side-by-side comparison is not carried out in a factual and legislative vacuum. The purpose of the exercise is to decide if two trade marks are substantially identical, where a trade mark is “a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person” (s 17). Given this context, it is unlikely that the essential elements of a mark or its dominant cognitive clues are to be found in mere descriptive elements, which are not apt to perform this distinguishing role in respect of the relevant goods or services. While this does not mean that differences, including descriptive differences, may be ignored, it does mean that the side-by-side comparison is to be carried out cognisant of the essential elements of the mark.

   [8] [2017] FCAFC 83 at [52].

6. The trade marks of the parties appear below side-by-side, as the tests in Shell and Insight require:

1. It must be observed that the device of a compass is common to the trade of ‘design’ services, as must also be the words ‘Australian Drafting & Design’ or ‘Australian Design & Drafting Services’[9] and thus (individually) prima facie lacking in inherent adaptation to distinguish the parties’ services.  Possibly apart from the ‘swirl’ appearing in each trade mark, ‘the dominant cognitive clues’ are (to quote Insight) ‘to be found in mere descriptive elements’.  However, an agglomeration of non-distinctive elements may combine to form a distinctive trade mark: In Re Diamond T Motor Car Company.[10]  In such circumstances the non-distinctive components may become essential elements of the combination depending, possibly, on the degree of inherent distinctiveness of the trade mark that they combine to form.

   [9] As regards the words within the parties’ trade marks see Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216; (1978) 18 ALR 639; [1978] ATPR 40-067; [1978] ASC 55-010; (1978) 52 ALJR 392; (1978) 3 TPC 244; (1978) 1B IPR 818; 18 A Crim R 639. Regarding the device of a compass see, by analogy, Eclipse Sleep Products Inc v Registrar of Trade Marks [1957] HCA 86; (1957) 99 CLR 300.

   [10] [1921] 2 Ch 583.

2. I consider that the ordering of the words, the selection of fonts, and the slight differences in graphical design within the trade marks do not subtract from the overall impression that the trade marks of the parties are, in essence, the same trade mark and that they are accordingly substantially identical.

3. The evidence establishes that the Opponent and the Applicant offer services which are either the same services or are services of such a similar nature that those services should be regarded as being ‘the same kind of thing’.

4. In summary, vis-à-vis the Trade Mark, the Opponent started use of its substantially identical trade mark before the Relevant Date in respect of services which are the same kind of thing as the Services and accordingly the Applicant is not the owner of the Trade Mark.

5. The Opponent has thus established its opposition under section 58 of the Act.

Section 62A

1. Section 62A of the Act 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[11] Bennett J summarised the decision of Dodds-Streeton J in Fry Consulting v Sports Warehouse Inc (No 2:[12]

   [11] [2013] FCA 478; (2013) 212 FCR 194; (2013) 299 ALR 110; (2013) 101 IPR 334 from [60].

   [12] [2012] FCA 81; (2012) 201 FCR 565.

   Her Honour considered (at [144]) the Explanatory Memorandum relating to s 62A, which stated:

   1.The Act allows removal of a trade mark on the basis that there was no intention in good faith to use, authorise use of, or assign the trade mark. However, current opposition grounds do not cover instances in which a person has deliberately set out to gain registration of a trade mark, or adopted a trade mark in bad faith. There have been several instances in which trade mark applicants have deliberately set out to gain registration of their trade marks, or have adopted trade marks, in bad faith. Some examples of these include:

   a person who monitors new property developments; registers the name of the new property development as a trade mark for a number of services; and then threatens the property developer with trade mark infringement unless they licence or buy the trade mark;

   a pattern of registering trade marks that are deliberate misspellings of other registered trade marks; and

   business people who identify a trade mark overseas which has no market penetration in Australia, and then register that trade mark with no intention to use it in the Australian market and for the express purpose of selling the mark to the overseas owner.

   When such situations occur, there is very little third parties can do to prevent registration of this type of trade mark, because existing grounds for rejection and opposition do not allow the Registrar to take these facts into account.

   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:

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

   oBad faith does not require dishonesty.

   oBad 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.

   oThe 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.

   oIt 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.

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

   oAll the circumstances surrounding the application to register the mark are relevant.

   oAn 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. Here the Applicant was a sub-contractor for the Opponent for a period of some eight years and upon the adverse termination of that relationship has made application to register the Trade Mark which is substantially identical to the trade mark used by his former employer in relation to services which are also ‘the same kind of thing’ as those then offered by his former employer.  I consider that this behaviour is likely to ‘fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons.’

4. I conclude that the application was made in bad faith and the Opponent has accordingly established its ground under section 62A of the Act.

Decision

1. Section 55 of the Act relevantly provides:

   55Decision

   (1)Unless subsection (3) applies to the proceedings, 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.

1. As the grounds under sections 58 and 62A have been established by the Opponent, it is

appropriate that the Registrar decides to refuse to register the Trade Mark.

Iain Campbell Thompson
Hearing Officer
Trade Marks Hearings
13 February 2018