Australian Ezy Tax Systems Pty Ltd v Ezy Tax Solutiions Pty Ltd
[2016] ATMO 62
•11 August 2016
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Australian Ezy Tax Systems Pty Ltd to registration of trade mark application 1603760 (35) - ETO EZY TAX ONLINE (and device) - in the name of Ezy Tax Solutions Pty Ltd.
| Delegate: | Heath Wilson |
| Representation: | Opponent: Tim Clarke of Addisons Lawyers. Applicant: Siobhan Ryan of Counsel instructed by O’Reilly Stevens (Solicitors). |
| Decision: | 2016 ATMO 62 Opposition under section 52 of the Trade Marks Act 1995; grounds pursued under sections 42(b), 43, 58, 60 and 62A of the Act; no grounds established; Trade Mark to proceed to registration. |
Background
On 3 February 2014, Ezy Tax Solutions Pty Ltd (‘the Applicant’) applied for registration of a trade mark under the provisions of the Trade Marks Act 1995 (Cth) (‘the Act’). The current details of that trade mark application are as follows:
Trade Mark No: 1603760
Trade Mark:
(‘the Trade Mark’)
Specification of Services:
Class 35: Accounting; Advice on tax preparation; Preparation of income tax returns; Preparation of tax returns; Tax advice (accountancy); Tax consultancy (accountancy); Tax planning (accountancy); Tax preparation; Tax return advisory (accountancy) services; Tax return preparation; Taxation (accountancy) advice; Taxation (accountancy) consultancy; Preparation of documents relating to taxation; Tax assessment (accountancy) consultancy; Tax assessment (accounts) preparation; Tax consultations (accountancy); Tax services (business management and accountancy services)
The Trade Mark was examined under section 31 of the Act and accepted for possible registration. The advertisement of that acceptance appeared in the Australian Official Journal of Trade Marks on 10 July 2014.
On 10 September 2014, a Notice of Intention to Oppose the registration of the Trade Mark was filed by Australian Ezy Tax Systems Pty Ltd (‘the Opponent’). The Statement of Grounds and Particulars (‘SGP’) that followed set out grounds of opposition under sections 42(b), 43, 58, 60, and 62A of the Act.
On 28 October 2014, the Applicant filed a Notice of Intention to Defend and the evidence stages of the opposition commenced, comprising the following declarations:
Statutory declaration of Terry Domenico Sofra (Director of the Opponent) made 25 February 2015 with exhibits TS-1 to TS-16 (‘Sofra 1’).
Statutory declaration of Shohei Kaya (Director of the Applicant) made 3 July 2015 with annexures A to K.
Statutory declaration of Terry Domenico Sofra made 11 September 2015 with exhibits TS-1 to TS-7 (‘Sofra 2’).
The parties subsequently requested to be heard on the matter and the opposition was scheduled for hearing on 7 July 2016. I was allocated to decide the matter in my capacity as a delegate of the Registrar of Trade Marks. In that capacity, I set out the schedule for the provision of a written outline of arguments prior to the hearing.
The Opponent complied with the deadline and the Applicant provided its written submissions at a later date than scheduled. I subsequently heard the opposition in Canberra on the scheduled date. Both parties attended by telephone with Siobhan Ryan of Counsel for the Applicant instructed by O’Reilly Stevens Lawyers and Tim Clarke of Addisons Lawyers representing the Opponent.
Onus
The opposition before me will be decided on the basis of the Opponent establishing at least one ground of opposition on the balance of probabilities.[1] The Opponent relied on each of the grounds of opposition set out in the SGP. The rights of the parties are determined as at the date of the application[2], which in this matter is 3 February 2014 (‘the relevant date’).
[1] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156; [133] affirming the approach of Gyles J in Pfizer Products Inc. v Karam [2006] FCA 1663; [26].
[2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82; (1954) 91 CLR 592, [595].
Reasons
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.
The ground of opposition under section 60 has two major elements that must both be satisfied for it to be established. Here, the Opponent must firstly demonstrate the existence of a reputation in Australia of its trade mark ‘EZYTAX’ before the relevant date. The requisite reputation of the trade mark ‘EZYTAX’ must be such that a ‘significant’ or ‘substantial’[3] number of consumers within the relevant trade (rather than Australian consumers as a whole) would be aware of the trade mark. The assessment of what is ‘significant or substantial’ must be properly and sensibly applied[4] and may depend on the specialised nature of the relevant market.[5]
[3] See Renaud Cointreau& Cie v Cordon Bleu International Ltee (2001) 52 IPR 382; [2001] FCA 1170 and ConAgra Inc. v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 23 IPR 193.
[4] “Bali” Trade Mark [1969] RPC 472, [496] (Lord Upjohn).
[5] Le Cordon Bleu BV v Cordon Bleu International Ltee (2001) 50 IPR 1; [2000] FCA 1587, [20].
For the second limb of the test, the nature and extent of the abovementioned reputation must be such that the use of the Trade Mark would be likely to deceive or cause confusion. This consideration is conjectural and does not require actual instances of deception or confusion to be demonstrated, but where such instances have been provided, they will be given great weight.[6]
[6] See Australian Woollen Mills Ltd v F. S. Walton and Company Ltd [1937] HCA 51; (1937) 58 CLR 641 (Dixon and McTiernan JJ).
Opponent’s Evidence
The evidence in support of the opposition contains material pertaining to the reputation of a trade mark in Australia. According to Sofra 1, the other trade mark is ‘EZYTAX’ which is generally used by the Opponent in relation to a software program being an online tax system with digital security features.
Exhibit TS-1 to Sofra 1 is an extract from the Australian Securities & Investments Commission (‘ASIC’) establishing that the Opponent registered the business name ‘AUSTRALIA EZY TAX’ on 30 August 2006. Exhibit TS-2 is an extract of the Opponent’s pending trade mark application 1627746 for ‘EZYTAX’ (filed on 11 June 2014). I note that the examination of that trade mark has been deferred, presumably awaiting the outcome of this opposition. However, neither of these examples assists in establishing any reputation (or use, for that matter) in a trade mark at the relevant date.
Exhibit TS-3 contains results from the ‘Wayback Machine’ internet archive. The exhibit displays the Opponent’s website at ‘http: //ezytax.com.au’ as it appeared from July 2003 to December 2014. The Opponent’s webpage is entitled ‘Australian Ezy Tax Systems’ but this is followed by various options for the customer including to ‘Register with ezytax’.
Exhibit TS-4 is an indication (at the time of making the declaration) of the web traffic on the Opponent’s website mentioned above.
According to Sofra 1, the Opponent has also provided newsletters, information brochures and reminder correspondence featuring its trade mark since 2002. However, any demonstrated use from this early date is not in evidence. Exhibit TS-5 contains brochures in which the expression ‘Ezytax’ appears in the body of the text and appears as a reference to the Opponent. A different example within the same exhibit states:
About Ezytax
The Ezy Tax Innovation evolved out of the need to provide Australian taxpayer with a simplified way of preparing annual income returns. Australian taxpayer was having a great deal of difficulty in completing their annual taxation returns using the ATO’s Taxpack.
Exhibit TS-6 is purported to be seminar details where the ‘services of [the Opponent] pursuant to the EZYTAX Mark were actively promoted’.[7] However, the exhibit only references the firm ‘Sofra Partners’ and the trade mark ‘EZYTAX’ does not appear anywhere on the promotional material for the event. I also note that the seminar occurred after the relevant date. Similarly, testimonials from the Opponent’s customers at exhibit TS-7 also appear to have been received after the relevant date.
[7] Sofra 1, [20].
I have been provided with an approximate average expenditure for the Opponent’s advertising and marketing and also the approximate average sales figures generated pursuant to the Opponent’s trade mark. That information is claimed as confidential but I find that I cannot infer a reputation[8] in a trade mark from those statements. In terms of advertising, it appears to have mainly occurred online through local business directories, mass emails to its clients and advertising on a third party website. Exhibit TS-9 consists of printouts from business directories bearing the Opponent’s ‘EZYTAX’ trade mark. However, most of the examples refer to the business as ‘Australian Ezytax Systems’ and I am not convinced this would translate to a reputation in ‘EZYTAX’ alone as a trade mark for accounting software.
[8] See McCormick & Co Inc. v McCormick (2000) 51 IPR 102, [127] (Kenny J).
The earliest extract from the Opponent’s ‘Facebook’ page is a post dated from March 2013[9] and therefore does not assist in demonstrating a reputation existed at the relevant date. In fact, Sofra 1 also indicates that the Opponent’s ‘Facebook’ page was not launched until 26 July 2013. [10]
[9] Exhibit TS-14 to Sofra 1.
[10] Paragraph [38].
The overall nature of the evidence is that the trade mark ‘EZYTAX’ is referred to in different ways. In some instances, it is a reference to the software program itself (e.g. “The ezytax system is an easy and simple way of completing your taxation return…”) and at other times as a reference to the Opponent (e.g. “At Ezytax, we strive to provide a superior service…”). It may be that the capitalised version is intended to refer to the Opponent and the name of the system itself is not capitalised, but this is not always the case.
I am not convinced that the evidence provided establishes as a matter of fact a reputation amongst a significant number of consumers as at the relevant date. Additionally, the inconsistent nature of the use of ‘EZYTAX’ tends to dilute the strength of any reputation in the trade mark. As a result, the likelihood of deception or confusion arising from the use of the Trade Mark is not real and tangible. For completeness, however, I will briefly address other factors relevant to this finding.
‘EZYTAX’
The expression ‘EZYTAX’ is on its face a common misspelling of the expression ‘easy tax’, an expression which has a low inherent capacity to distinguish relevant services in class 35 and 36. For example, I note that the Opponent’s pending trade mark application no. 1627746 at the time of writing has a ground for rejection under section 41(4) of the Act. While made in relation to similar trading names, it is worth referring to the comments made in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd[11] (‘Hornsby’) (under the now repealed Trade Practices Act 1974 (Cth)):
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. …
The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.
[11] Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216, [229].
As the current matter concerns a composite trade mark, the facts are not on all-fours with Hornsby but the general principles are applicable and affect the likelihood of deception or confusion. A descriptive element within a trade mark may be to some extent discounted in a comparison (or to paraphrase Hornsby, a certain risk of confusion due to the presence of that element may be accepted), but those descriptive elements cannot be entirely ignored in the overall comparison. In this matter, the prima facie descriptiveness of an expression such as ‘EZYTAX’ may reduce the likelihood of deception or confusion arising from the presence of that element in the Trade Mark.
Evidence of confusion
Mr Sofra attests to instances of actual confusion as shown in email communications between Australian consumers and the Opponent’s employees from 2013 to 2014. For example, the following exchange occurred on 11 September 2013:
Mr Sofra: Seems to be some confusion…you have lodged your return at Ezytax Cairns we are ezytax online. Contact them directly
Consumer: I have not got through ezy tax cairns I have gone through ezy tax online. The documents I have been sent are from ezy tax online and have their logo. I don’t understand where the confusion is![12]
And in response to another misdirected query on the same date, Mr Sofra has written:
Unfortunately we cannot seem to see your name on the system. Did you do your tax return at ezytax Cairns (as we are ezytax.com.au)?
[12] Exhibit TS-16 to Sofra 1.
The commonality of the expression ‘EZYTAX’ or ‘EZY TAX’ appears to be causing confusion as to where the customer’s tax refunds had been filed. However, to provide some context, it should be noted that the Opponent’s website address (‘ and the Applicant’s website address (‘ are quite similar. The fact that confusion may arise in relation to the similarity of domain names is not the question before me. The wording of section 60 makes it abundantly clear that the requisite confusion must arise ‘because of the reputation of that other trade mark’ and not as a result of other factors. I am not satisfied that the instances highlighted by Mr Sofra arise from an established reputation in the Opponent’s trade mark ‘EZYTAX’ or that confusion has arisen from the use of the Trade Mark.
As found earlier, the Opponent has not established the requisite reputation in its trade mark. Taking into account all of the above factors, I find that the ground of opposition under section 60 of the Act has not been established.
Section 42(b)
Section 42 of the Act provides:
42Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
(a)the trade mark contains or consists of scandalous matter; or
(b)its use would be contrary to law.
For this ground, the Opponent argued that the use of the Trade Mark would be contrary to ss18 and 29 of Schedule 2 of the Competition and Consumer Act 2010 (Cth)[13]. In particular, that such use:
Will mislead or deceive, or is likely to mislead or deceive consumers (s18 of The Australian Consumer Law) and;
Represent that [the Applicant’s] Class 35 services have the sponsorship or approval of [the Opponent] when they do not (s29(1)(g) of The Australian Consumer Law).
[13] The Australian Consumer Law.
The Opponent points to the contents of Sofra 1 as outlined under the section 60 ground and highlights what is alleged to be evidence of likely and actual deception in the relevant market.
I have already addressed the nature of the instances of confusion appearing in Sofra 1 and I am not convinced that confusion arose from use of the Trade Mark. I was also not satisfied that the Opponent has demonstrated a sufficient reputation in ‘EZYTAX’ for the use of the Trade Mark to be likely to deceive or cause confusion. For the purposes of this ground of opposition, it follows that there are not a reasonably significant number of potential purchasers that are likely to be aware of the Opponent’s product and then misled or deceived (rather than deceived or merely confused), by the use of the Trade Mark. It is a further step to allege that the use of the Trade Mark is likely to mislead or deceive consumers.
In other words, as there was not a reputation in the Opponent’s trade mark sufficient to support a finding that the use of the Trade Mark would deceive or confuse Australian consumers under section 60, it follows that the reputation is likewise insufficient to support an argument for misleading and deceptive conduct, as it is a more onerous standard.[14] There is also nothing to satisfy me that the use of the Trade Mark would amount to false or misleading representations sufficient to enliven subsection 29(1)(g) of The Australian Consumer Law.
[14] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, [199] (Gibbs CJ).
Under section 42(b) of the Act, I must be satisfied that the use of the Trade Mark ‘would’, not ‘could,’ be contrary to law[15]. On the strength of the evidence, I am not satisfied, and I find that section 42(b) of the Act has not been established.
[15] Advantage Rent-A-Car Inc. v Advantage Car Rental Pty Ltd [2001] FCA 683, [32].
Section 43
Section 43 of the Act provides:
43Trade mark likely to deceive or cause confusion
An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.
To establish the ground of opposition under section 43, there must be an inherent connotation present within the Trade Mark. That connotation must be the cause of likely deception or confusion if the Trade Mark were used in a normal and fair manner. As Gyles J in Pfizer Products Inc. v Karam[16] commented:
‘Connotation’ is a secondary meaning implied by the mark. The likelihood of deception or confusion must flow from the secondary meaning inherent in the mark itself. It is apparent that the underlying purpose of s 43 is a similar purpose to that lying behind ss 52, 53 and 55 of the Trade Practices Act 1974 (Cth). It is to prevent the public being deceived or confused as to the nature of the goods offered by reason of a secondary meaning connoted by the mark in question...
[16] [2006] FCA 1663; (2006) 70 IPR 599, [53].
In Winton Shire Council v Lomas[17] Spender J said:
Section 43 is directed to the mark itself. It is not concerned with any deception or confusion caused by the reputation in Australia of some other trade mark. That aspect of the matter is dealt with under s 60.
[17] [2002] FCA 288, [19].
The Opponent argued that its reasoning pursuant to section 60 applies equally in respect of section 43. As can be seen in the authority extracted above, section 60 has a different function. The current opposition is not one where there is an implied association or sponsorship arising from a connotation within the Trade Mark. The Trade Mark does not, for example, contain a connotation implying an association with a famous person[18], the title of a well-known movie[19], or a well-known location within a popular television program[20].
[18] See McCorquodale v Masterson [2004] FCA 1247.
[19] See Twentieth Century Fox Film Corporation v Michael F Durkan [2000] ATMO 5.
[20] See Amalagamated Television Services Pty Ltd v Linda Cameron Pickard, Alexandra Cameron Pickard and Linda Louise Pickard [1999] ATMO 103.
The Opponent is instead relying on a reputation in a particular trade mark and this is not the appropriate ground for such an argument. I therefore find that the ground of opposition under section 43 has not been established.
Section 58
Section 58 of the Act provides:
58 Applicant 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.
Under section 58, it is a requirement that an opponent establish prior use of trade mark that is at least substantially identical to the applied-for trade mark. The relevant test is that a: ‘total impression of similarity (emerges) from a comparison between the two marks’ because ‘In a real sense a claim to proprietorship of the one extends to the other. But to go beyond this is, in my view, not possible.’[21]
[21] Carnival Cruise Lines Inc. v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495, [62] (Gummow J).
Placing the two trade marks side-by-side[22], the visual differences between the Trade Mark and EZYTAX are readily apparent. The Trade Mark includes the acronym ETO, a stylised depiction of Australia within a stylised circular device with the addition of the word ‘Online’. The Opponent’s trade mark is simply the expression ‘EZYTAX’ which is one element of many within the Trade Mark. As such, there is not a total impression of similarity between the two. They are not substantially identical.
[22] Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd (1961) 109 CLR 407, [414].
This ground of opposition has failed at the threshold and I find that section 58 of the Act has not been established.
Section 62A
Section 62A of the Act provides:
62A Application made in bad faith
The registration of a trade mark may be opposed on the ground that the application was made in bad faith.
Under section 62A, Dodds-Streeton J in the case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2)[23] found:
The formulation in 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.
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 proposition advanced by Sports Warehouse, that mere awareness that an overseas company owning the mark is already operating or intending to operate in Australia would amount to bad faith, is unduly absolute. 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.
[23] [2012] FCA 81, [165]-[167].
The Opponent argues that the Applicant’s knowledge of the Opponent’s use at common law of ‘EZYTAX’ as a trade mark can be inferred from the facts and, that being the case, the Applicant’s decision to apply to register the Trade Mark falls short of the relevant standard. To support this proposition, Sofra 2 criticizes the contents of the Kaya declaration, especially Mr Kaya’s direct statement that he was unaware of the existence of the Opponent at the time of filing.
The allegation is that the Applicant would have conducted a due diligence search prior to filing and would have been aware of the Opponent. The Opponent notes that Mr Kaya is a registered tax agent, an accomplished accountant and taxation professional. He would (according to the Opponent) have been unlikely to fail to undertake the appropriate searches prior to incorporating the Applicant and prior to filing the Trade Mark. The Opponent then goes on to say that “Mr Kaya is likely to have conducted any such due diligence searches personally”.[24]
[24] Sofra 2, [7].
I find that the Opponent’s arguments are built on a number of unsupported assumptions. In addition, there is no cogent evidence that the Applicant did know of the Opponent and Mr Kaya has directly declared otherwise. Even if the Opponent was accurate in its observations (and I am not satisfied in that regard) mere knowledge of the Opponent’s use of ‘EZYTAX’ would not be sufficient to find bad faith in these circumstances.
While it is true that a ground of opposition need only be established on the balance of probabilities, a finding of bad faith is a serious allegation[25] and I am not satisfied that the Opponent has discharged the onus here. The ground of opposition under section 62A of the Act has not been established.
[25] Hard Coffee Pty Ltd v Hard Coffee Main Beach Pty Ltd [2009] ATMO 26, [12].
Decision
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.
The Opponent has not established a ground of opposition. Accordingly, I direct that trade mark application no. 1603760 may proceed to registration one month from the date of this decision.
If the Registrar is served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been withdrawn or discontinued. Otherwise, the disposition of the application should be in accordance with the Court’s order or direction.
Costs
Both parties have sought an award of costs. As it is the unsuccessful party, I award costs against the Opponent in accordance with the applicable amounts set out in Schedule 8 of the Trade Marks Regulations 1995.
Heath Wilson
Hearing Officer
Oppositions and Hearings
11 August 2016
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