Australian Homestay Network Pty Ltd v Homestay Network Pty Ltd
[2015] ATMO 28
•31 March 2015
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Australian Homestay Network Pty Ltd to registration of trade mark application 1537693(43) - HOMESTAY NETWORK Logo - filed in the name of Homestay Network Pty Ltd.
Delegate: | Iain Campbell Thompson |
Representation: | Opponent: David Bycroft, Managing Director of the Opponent Applicant: Chris Round, a partner of K & L Gates |
Decision: | 2015 ATMO 28 s52 opposition: grounds under section 41, 44, 58, 60 and 62A not established: Opponent’s reliance on matter that lacks inherent adaptation to distinguish |
Background
In these proceedings under the Trade Marks Act 1995 (‘the Act’) Homestay Network Pty Ltd (‘the Applicant’) has applied to register the trade mark that appears below:
Application No: 1537693
Priority Date: 25 January 2013
(‘the Relevant Date’)
Services:Class 43: Accommodation finding services for tourists; Accommodation finding services for travellers; Accommodation reservation services; Agency services for booking hotel accommodation; Agency services for booking temporary accommodation; Agency services for the reservation of accommodation; Arrangement of accommodation for holiday makers; Arrangement of accommodation for tourists; Arrangement of accommodation for travellers; Arranging of temporary accommodation; Booking of accommodation for travellers; Booking of temporary accommodation; Booking services for accommodation; Consultancy and advisory services relating to the provision of temporary accommodation; Hospitality services (accommodation); Information services relating to the provision of temporary accommodation; Providing information, including online, about services for providing food and drink, and temporary accommodation; Provision of information relating to the availability of accommodation; Provision of information relating to the booking of accommodation; Provision of self catering holiday accommodation; Provision of temporary accommodation; Tourist agency services (provision of temporary accommodation); Tourist agency services for booking accommodation
(‘the Services’)
Trade Mark:
(‘the Trade Mark’)
The Trade Mark was examined as is mandated by section 31 of the Act and advertised as accepted for possible registration on 16 May 2013 in the Australian Official Journal of Trade Marks.
On 4 June 2013 Australian Homestay Network Pty Ltd (‘the Opponent’) filed Notice of Intention to Oppose and on 2 July 2015 filed its Statement of Grounds & Particulars (‘SG&P’). The SG&P particularises grounds under sections 41, 44, 58, 60 and 62A which were subsequently argued at a hearing.
The parties have filed evidence in support, evidence in answer and evidence in reply in accordance with the Trade Mark Regulations 1995.
The hearing was before me on 12 March 2015 in Canberra as a delegate of the Registrar of Trade Marks. Mr David Bycroft, Managing Director of the Opponent, made submissions on the Opponent’s behalf. Mr Chris Round, a partner of K&L Gates, represented the Applicant by video link.
Onus and Relevant Date
The Opponent bears the onus of establishing one or more grounds of opposition on the balance of probabilities.[1] The relevant date at which the grounds must be considered is the filing date of the application.[2]
[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, , Phone Directories Company Australia Pty Ltd v Telstra Corporation Limited [2014] FCA 373 per Murphy J at [30] to [37].
[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
The evidence comprises declarations by:
In Support
David Bycroft, Managing Director of the Opponent, made on 2 December 2013;
In Answer
Tina Holland, a director of the Applicant, made on 26 March 2014.
In Reply
David Bycroft, Managing Director of the Opponent, made on 14 July 2014
Put briefly, the evidence shows that the Opponent (and its predecessor in business) has used the trade mark appearing below since 2007:
(‘the 2007 AHN trade mark’)
The Opponent has registered this trade mark as follows:
Registration No: 1183289
Priority Date: 22 June 2007
Goods/Services: Class 9: Education software
Class 41: Technological education services
Mr Bycroft’s declarations in evidence state that the services provided by the Opponent are international student placements into homestay environments. I note now that these are services that do not fall within the scope of registration 1183289, above.
The Applicant for its part (and/or its predecessor in business) has used the name Homestay Network since 1987 and the Trade Mark since 1994 in relation to the provision of accommodation for local, national and international students within the homes of Australian families. I note here that whilst the Opponent has objected that these services are mainly provided in Sydney, very slight use of a trade mark anywhere in Australia is sufficient to establish ownership of a trade mark throughout Australia.[3]
[3] Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73; (1984) 156 CLR 414; 56 ALR 193; 59 ALJR 77; 3 IPR 545; [1984] AIPC 90-141; [1984] Aust Torts Reports 80-314.
Concerning prior dealings between the parties or their predecessors, Ms Holland states:
In or around late 2008, I became aware that a business had commenced using the 2007 AHN Mark and the name “Australian Homestay Network” to promote its services.
On 7 May 2009, the Applicant’s lawyers sent a letter of demand to the then-owner of the 2007 AHN Mark, International Education Services Ltd (IES) alleging that (among other things):
(a) IES was using a mark that deceptively similar to the Applicant’s trading indicia;
(b) IES was seeking to derive a benefit from the reputation built by Homestay over the previous 22 years and its conduct was likely to mislead and deceive consumers;
(c) IES’s conduct had resulted in actual instances of consumers and members of the relevant market being led to believe that its business is the same as or related to the Applicant’s business; and
(d) IES’s conduct constituted misleading and deceptive conduct, the making of false representations of sponsorship or approval in breach of the Trade Practices Act 1974 (Cth) (as it then was) and the tort of passing off.
Annexed and marked TH-15 is a copy of the letter from the Applicant’s lawyers to IES dated 7 May 2009.
On 11 May 2009, Mr Chris Evason, the managing director of IES, wrote to the Applicant’s lawyers in response. IES denied the allegations and stated that (among other things):
(a) the 2007 AHN Mark related to a web-based management system launched in July 2007 (AHN System);
(b) IES licensed Homestay Management Pty Ltd (the former name of the Opponent) to use, market and manage the AHN System to enable the system to be employed by the wide Australian education industry nationwide and also add related services to clients such as insurance and 24/7 emergency telephone contact numbers;
(c) the AHN system is a web-based product, not a homestay service and is a completely different business to that of the Applicant;
(d) “the AHN is not a homestay provider offering student accommodation within host families’ homes as [the Applicant] does. The AHN is a national network of affiliated organizations providing approved organizations (some similar to [the Applicant]), with a web-based management system to aid them operate their business”; and
(e) “IES do not seek any confusion in the marketplace, nor to harm your client’s business in any way. IES are prepared to simple [sic] provide a disclaimer on the AHN webs site under the ‘‘About Us” page. In regard to the activities of [the Opponent] in promoting the AHN, we will inform them of your client’s concerns and ensure that suitable regard is given in their on-going activities. IES does not and has not sought to derive any benefit from your client’s reputation, and sees no reason why the AHN product and [the Applicant’s] business cannot co-exist.”
Annexed and marked TH-16 is a copy of the letter from IES to the Applicant’s lawyers dated 11 May 2009.
On the basis of these representations, the Applicant did not take further action against IES or the Opponent. Based on the contents of Mr Evason’s letter, I believe that either:
(a) the contents of Mr Evason’s letter are correct, and the Opponent did not in fact offer similar services to that of the Applicant, meaning the Bycroft Declaration falsely asserts that the Opponent offers accommodation services;
(b) the Applicant was deliberately mislead as to the true nature of the services offered under the 2007 AHN Mark, thereby depriving the Applicant of the opportunity to take further action against IES and the Opponent to protect its legitimate rights and interests in the Trade Mark and the “Homestay Network” name; or
(c) the Opponent only more recently started offering accommodation services, in which case it did so being fully aware of the Applicant’s rights and interests in the Trade Mark and the “Homestay Network” name.
That, then, is the background of this matter in as far as it is relevant to my decision. It is apparent that central to the grounds pursued by the Opponent are its erroneous beliefs that it has prior or superior rights in the expression ‘homestay network’ (‘the Expression’) and that registration 1183289 assists in establishing those rights in relation to student homestay services (which it does not). It is appropriate, therefore, before discussing the merits of the opposition in relation to each of the grounds that I discuss the inherent qualities of the Expression.
The Expression
Section 17 of the Act defines the term ‘trade mark’:
17What is a trade mark?
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.
Note:For sign see section 6.
As to the word ‘sign’ within the above definition, section 6 states:
sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.
Thus to be a trade mark a sign must 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. It also follows that if that sign does not so distinguish goods or services it is not functioning as a trade mark.
A part of trade mark law is founded on the principle that no trader should gain a monopoly over a letter, word, name (etc) that other traders honestly need in order to properly describe or designate their goods or services to the potential purchasers of their services or wares. If such signs are required (without improper motive) by traders to use in the ordinary course of trade in relation to their goods or services, these signs lack inherent adaptation to distinguish the goods or services.
Here the Expression is a direct statement as to the nature of the parties’ services. That is, the Expression denotes a cooperating network of people which provide homestay accommodation.
In the recent case of Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48 the High Court stated at [36]-[44]:
After stating that “[w]ealthy traders are habitually eager to enclose part of the great common of the English language”[4] (which echoed their Lordships in the Solio Case), Cozens-Hardy MR explained why no monopoly could be granted under s 9(5) for laudatory epithets used as adjectives. Words such as “good” or “best” are incapable of developing a secondary meaning as indicating only an applicant’s goods[5]. Accordingly “Perfection” was not registrable as a trade mark for soap as it was a word which should be open to use by both other traders and members of the public[6].
[4] Perfection, California Syrup of Figs and Orlwoola Cases [1910] 1 Ch 130 at 141 per Cozens-Hardy MR
[5]Perfection, California Syrup of Figs and Orlwoola Cases [1910] 1 Ch 130 at 141-142 per Cozens-Hardy MR.
[6] Perfection Case [1910] 1 Ch 130 at 143 per Cozens-Hardy MR, 149 per Fletcher Moulton LJ, 153-154 per Farwell LJ
Equally, no monopoly could be granted to words consisting of geographical names if their “ordinary signification” described the place of the manufacture or sale of goods[7]. If, however, a geographical name was part of a composite mark, identified by long use as associated only with the goods of an applicant, it could be registered (as exemplified by “California Syrup of Figs” for an aperient medicine[8]).
[7] Perfection, California Syrup of Figs and Orlwoola Cases [1910] 1 Ch 130 at 141 per Cozens-Hardy MR. See also the Solio Case [1898] AC 571 at 574-575 per Earl of Halsbury LC
[8] California Syrup of Figs Case [1910] 1 Ch 130 at 143 per Cozens-Hardy MR, 150 per Fletcher Moulton LJ, 154 per Farwell LJ.
No monopoly could be granted to trade marks which were merely phonetic equivalents of directly descriptive words, such as “Orlwoola” for textile fabrics[9]. [See also Electrolux Ltd v Electrix Ltd (1953) 71 RPC 23 at 36].
[9] Orlwoola Case [1910] 1 Ch 130 at 143-144 per Cozens-Hardy MR, 150 per Fletcher Moulton LJ, 154-155 per Farwell LJ.
In explaining those disparate circumstances in which the “ordinary signification” of a word affected a grant of a monopoly of its use, their Lordships recognised that any word in English could prima facie be used as a trade mark but would not necessarily qualify to be registered as one. In drawing their conclusions in respect of the three trade marks under consideration, their Lordships indicated that the determination of whether a word has “direct reference” to goods (prima facie precluding a monopoly of its use) depends critically on the goods themselves, because a word containing a direct reference to goods in one trade may not convey any such direct reference to goods in another trade[10]. An example given later was the use of the words “North Pole” for bananas[11].
It was thus established early in the development of trade mark law in the United Kingdom that the “ordinary signification” of any word, or words, constituting a trade mark is important, whether a challenge to the registrability of a trade mark is based on the word having a laudatory or directly descriptive meaning, or on the word being, according to its “ordinary signification”, a geographical name (or, in those times, a surname).
In Du Cros, Lord Parker’s speech was also directed to s 9(5) of the Trade Marks Act 1905 (UK)[12]. Lord Parker was not dealing with a word but with two applications for registration of a trade mark consisting of two letters of the alphabet joined by an ampersand. The question was whether those marks were registrable under s 9(5), being “adapted to distinguish” certain goods, as letters of the alphabet were not included in the “essential particulars” in sub-ss (1), (2), (3) or (4) of s 9. Lord Parker said that the registrability of a trade mark as “distinctive” should[13]:
“largely depend upon whether other traders are likely, in the ordinary course of their business and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods.”
As Lord Parker explained when applying the principle (since much relied upon), even though a mark may have acquired some distinctiveness through use, a person should not be given a monopoly of letters of the alphabet, which other traders may legitimately desire to use because they have the same initials[14].
Earlier that same year, a similar point had been made in respect of s 9(5) and the distinctiveness of a surname, which others may share and wish to use. In In re R J Lea Ltd’s Application[15] (“R J Lea”) Hamilton LJ said[16]:
“Further the Act says ‘adapted to distinguish’; the mere proof or admission that a mark does in fact distinguish does not ipso facto compel the judge to deem that mark to be distinctive. It must be further ‘adapted to distinguish,’ which brings within the purview of his discretion the wider field of the interests of strangers and of the public.”
The requirement that a proposed trade mark be examined from the point of view of the possible impairment of the rights of honest traders to do that which, apart from the grant of a monopoly, would be their natural mode of conducting business (Lord Parker), and from the wider point of view of the public (Hamilton LJ), has been applied to words proposed as trade marks for at least a century, irrespective of whether the words are English or foreign. The requirement has been adopted in numerous decisions of this Court dealing with words as trade marks under the 1905 Act and the 1955 Act[17]. Those decisions show that assessing the distinctiveness of a word commonly calls for an enquiry into the word’s ordinary signification and whether or not it has acquired a secondary meaning.
[10] Perfection, California Syrup of Figs and Orlwoola Cases [1910] 1 Ch 130 at 144, 150 per Fletcher Moulton LJ, 151, 154 per Farwell LJ.
[11] A Baily & Co Ltd v Clark, Son & Morland [1938] AC 557 at 562 per Lord Maugham LC
[12] As already mentioned, like s 16(2) of the 1905 Act, s 9(5) did not speak of “inherent” adaption to distinguish but used only the phrase “adapted to distinguish
[13] Du Cros [1913] AC 624 at 635.
[14] Du Cros [1913] AC 624 at 635-636. Another trader will not legitimately and honestly desire to use letters of the alphabet to describe their goods if the letters of the alphabet have, through long use, come to distinguish only an applicant’s goods, as occurred in British Petroleum Co Ltd v European Petroleum Distributors Ltd [1968] RPC 54.
[15] [1913] 1 Ch 446.
[16] [1913] 1 Ch 446 at 463
[17] Thomson v B Seppelt & Sons Ltd [1925] HCA 40; (1925) 37 CLR 305 at 312-313 per Isaacs J, 315 per Rich J; [1925] HCA 40; Mangrovite Belting Ltd v J C Ludowici & Son Ltd [1938] HCA 67; (1938) 61 CLR 149 at 160-161 per Rich J; [1938] HCA 67; Mark Foy’s [1956] HCA 41; (1956) 95 CLR 190 at 201 per Williams J; Clark Equipment [1964] HCA 55; (1964) 111 CLR 511 at 513-515 per Kitto J; F H Faulding & Co Ltd v Imperial Chemical Industries Ltd [1965] HCA 72; (1965) 112 CLR 537 at 555-557 per Kitto J (“Faulding”); [1965] HCA 72; Burger King Corporation v Registrar of Trade Marks [1973] HCA 15; (1973) 128 CLR 417 at 425 per Gibbs J (“Burger King”); [1973] HCA 15.
Accordingly, when considering whether the Expression is inherently adapted to distinguish the services of the parties, the oft-quoted test in Clark Equipment Co v Registrar of Trade Marks [1964] HCA 55; (1964) 111 CLR 511 applies. As stated by Kitto J:
That ultimate question must not be misunderstood. It is not whether the mark will be adapted to distinguish the registered owner’s goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others. In Registrar of Trade Marks v. W. & G. Du Cros Ltd. (1913) AC 624, at pp 634, 635 Lord Parker of Waddington, having remarked upon the difficulty of finding the right criterion by which to determine whether a proposed mark is or is not “adapted to distinguish” the applicant’s goods, defined the crucial question practically as I have stated it, and added two sentences which have often been quoted but to which it is well to return for an understanding of the problem in a case such as the present. His Lordship said: “The applicant’s chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Acts a monopoly in what others may legitimately desire to use.” The interests of strangers and of the public are thus bound up with the whole question, as Hamilton L.J. pointed out in the case of R.J. Lea, Ltd. (1913) 1 Ch 446, at p 463; (1913) 30 RPC 216, at p 227; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives - in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess - will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it. (at p514)
Consequently, words within composite trade marks, such as the Expression, that are unadapted to distinguish the particular goods or services in relation to which they are used, are not prima facie registrable in their own right and only function in those trade marks to state the nature of the goods or services.
Hence, the more that words within a composite trade mark only function to state the nature of the goods or services, the less that the owner of the trade mark will be able to found a ground alleging confusion or deception arising from the existence of another trade mark based on only those words. And, as Stephen J observed[18] in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216; (1978) 18 ALR 639; (1978) 52 ALJR 392; [1978] ATPR 40-067; [1978] ASC 55-010; (1978) 3 TPC 244; (‘Hornsby’) at page 229:
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. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor’s trade name will render the latter immune from action (Office Cleaning Services Ltd. v. Westminster Window and General Cleaners Ltd. (1946) 63 RPC 39, at p 42, per Lord Simonds). As his Lordship said (1946) 63 RPC, at p 43, the possibility of blunders by members of the public will always be present when names consist of descriptive words - “So long as descriptive words are used by two traders as part of their respective trade names, it is possible that some members of the public will be confused whatever the differentiating words may be.” 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.
[18] Albeit in relation to trade practices.
It is likewise in the matter before me and any confusion which arises from the occurrence of the Expression in both parties’ trade marks arises only from the nature of the inherently unadapted words which comprise the Expression. I paraphrase the further words of Stephen J at [23] of his judgment:
If this be so in the case of passing off actions the case of [this opposition] is a fortiori. To allow … the Act to be used as an instrument for the creation of any monopoly in descriptive words would be to mock the manifest intent of the legislation.
The Expression only functions to state the nature of the parties’ services and any rights which may arise from the registration of these trade marks that incorporate those words in relation to the Services arise in the trade marks as wholes.
With that principle in mind, I turn to the grounds of opposition.
Section 41
At the relevant date, section 41 of the Act provided:
41Trade mark not distinguishing applicant’s goods or services
(1)For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.
Note 1:For applicant and predecessor in title see section 6.
Note 2:If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).
(2)An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.
Note:For goods of a person and services of a person see section 6.
(3)In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or services of other persons.
(4)Then, if the Registrar is still unable to decide the question, the following provisions apply.
(5)If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:
(a)the Registrar is to consider whether, because of the combined effect of the following:
(i)the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;
(ii)the use, or intended use, of the trade mark by the applicant;
(iii)any other circumstances;
the trade mark does or will distinguish the designated goods or services as being those of the applicant; and
(b)if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and
(c)if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.
Note 1:For goods of a person and services of a person see section 6.
Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).
(6)If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:
(a)if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;
(b)in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.
Note 1:Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:
(a) the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or
(b) the time of production of goods or of the rendering of services.
Note 2:Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).
The Opponent here submits that the occurrence of the Expression within the Trade Mark does not distinguish it from the Opponent’s 2007 AHN trade mark which also contains the Expression. However, section 41 is not concerned with whether a trade mark is distinguishable from the trade mark of another trader in particular and comparisons with that other trader’s trade mark. Rather, section 41 is the statutory embodiment of the principle that a particular trader should not be granted a monopoly in a sign[19] which any other trader honestly needs to use in respect of their goods or services which are similar to the goods or services of that particular trader. Section 41 thus looks to the interests of a particular trade as a whole. Here, because there is other distinguishing matter in the Trade Mark, the registration of the Trade Mark should not prevent any other trader who provides a cooperating network of people which provide homestay accommodation from spruiking their service as a ‘homestay network’.
[19] Such signs include those at Note 1 to section 41: they are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate: the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or the time of production of goods or of the rendering of services [Stress added].
For the sake of completeness, I note that the dominant feature of the Trade Mark is a device which is entirely figurative in nature which no other trader should honestly need to use in respect of the Services. Thus the Trade Mark, considered as a whole, is distinctive of the Services.
The Opponent has not established its opposition under section 41 of the Act.
Section 44
Section 44 relevantly provides:
44 Identical etc. trade marks
(2) Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant’s trade mark) in respect of services (applicant’s services) must be rejected if:
(a)it is substantially identical with, or deceptively similar to:
(i)a trade mark registered by another person in respect of similar services or closely related goods; or
(ii)a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and
(b)the priority date for the registration of the applicant’s trade mark in respect of the applicant’s services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.
Note 1:For deceptively similar see section 10.
Note 2:For similar services see subsection 14(2).
Note 3:For priority date see section 12.
Note 4:The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.
This ground is dependent in part upon the alleged deceptive similarity of the Trade Mark to the Opponent’s registered 2007 AHN trade mark. As discussed above under the heading The Expression, a finding of deceptive similarity would in effect infer that the Opponent has a monopoly in an entirely descriptive term. The Opponent does not have such a monopoly. Any confusion that might occur stems only from the prominence of that descriptive term in the Opponent’s 2007 AHN trade mark and not from a deceptive similarity of the parties’ trade marks within the meaning of the Act. I note that this observation is in accordance with previous decisions of the Registrar such as Watches of Switzerland Pty Ltd v Mappin & Webb Limited [2015] ATMO 23 (commonality of expression ‘Watches of Switzerland’) and Cars on Demand IP Pty Ltd v Cars on Demand Limited [2014] ATMO 87 (commonality of the expression ‘Cars on Demand’). In the latter case Hearing Officer Kirov observed:
[…] the following relevant factors [are] identified in IP Australia’s Australian Trade Marks Manual of Practice and Procedure at Part 26, paragraph 6.4, under the heading “Marks which contain another trade mark”:
A finding of deceptive similarity in wholly contained trade marks is not automatic and may depend on a number of factors. These include:
(a) The extent to which the shared element has retained its identity as an essential feature of the trade marks (See: Bulova Accutron Trade Mark [1969] RPC 102 (Ch D).
(b) The distinctiveness of the common element/s and the distinctiveness of additional element/s. If the additional element changes the idea of the trade mark, this may point towards a finding that the marks are not deceptively similar.
(c) The nature of the additional element(s) – if the additional element(s) is/are particularly distinctive then the marks will most likely not be deceptively similar, even though they share a common element. And vice versa – if the additional element has a low level of distinctiveness then the marks are more likely to be deceptively similar (See: Application by Coles Myer Ltd, (1993) 26 IPR 577, BRATS: BONZA BRATS)
(d) The meaning behind the trade marks – where an additional element changes the meaning of the trade mark or the concept behind it then the trade marks are less likely to be deceptively similar.
(e) The placement, within the trade mark, of the common and non-distinctive elements, including size of text and any other elements may provide a different context and consequently alter the overall impression of the trade mark.
(f) When both the common element and additional element are distinctive – each case will turn on its own facts. See BAREFOOT: BAREFOOT RADLER. E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2008] FCA 934 at 63 per Flick J.
(g) Consideration must be given to the surrounding context of the goods and services, such as methods of sale and common trade techniques. Are customers purchasing goods by name? How are the goods presented? Who are the consumers? (General or specialist?).
After quoting the passage from Hornsby at [22] of this decision Mr Kirov continued:
This has been cited with approval in numerous cases including Australian Postal Corporation v Digital Post Australia Pty Ltd (No 2) [2012] FCA 862 per Marshall J at [77]; Dimokranitis v Exotic Limo Pty Ltd [2010] ATMO 69 at 43; Kosciuszko Thredbo Pty Ltd v ThredboNet Marketing Pty Ltd where it was found at first instance, [2013] FCA 563, that where there was evidence of confusion between businesses using a geographic description, this was caused by the nature of the word itself and therefore 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....” Office Cleaning Services Ltd v Westminster Window & General Cleaners Ltd (1946) 63 RPC 39 at 42 per Lord Simonds. This reasoning was recently affirmed on appeal by the Full Court of the Federal Court [2014] FCAFC 87 at [32]- [34] per Siopis, Rares and Katzmann JJ.
In Dimokranitis v Exotic Limo the hearing officer noted at 44:
If there is to be confusion resulting from the applicant’s use, I am satisfied that it is more likely to result from the descriptiveness of the trade marks themselves than from any reputation the opponent may have in its trade mark.
I am satisfied that such is the case here. For the sake of completeness, I also find that the Services are not similar or closely related to those for which the Opponent’s 2007 AHN trade mark is registered.
The Opponent has not established its ground under section 44 of the Act.
Section 58 of the Act
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.
In order to found this ground the Opponent needs to establish to my satisfaction that it was the first to have authored and used a trade mark[20] which is at least substantially identical[21] to the Trade Mark before the Relevant Date (or the first use by the Applicant of the Trade Mark whichever is the earlier) in relation to services which are the same kind of thing[22] as the Services.
[20] The Shell Co of Australia Ltd v Rohm & Haas Co [1948] HCA 27; (1949) 78 CLR 601, Dixon J (as he then was) at 627
[21] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495; (1994) 31 IPR 375; [1994] AIPC 91-049
[22] In re Hicks’s Trade Mark [1897] VicLawRp 118; (1897) 22 VLR 636; see also Edwards v Dennis (1885) 30 Ch D 454 and Jackson & Co v Napper (1886) 35 Ch D 160
The trade marks of the parties are neither substantially identical nor deceptively similar. Further, if the trade marks of the parties were substantially identical the evidence shows that the Applicant had first use of the Trade Mark.
The Opponent has not established the ground under section 58 of the Act.
Section 60
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.
In order to found this ground the Opponent must establish to my satisfaction both that the trade mark on which is relies has a reputation and that because of that reputation the use of the Trade Mark would deceive or cause confusion.
The Opponent here relies on its 2007 AHN trade mark. However, whatever the reputation of that trade mark the Opponent not provided evidence that it has a reputation in the Expression, solus, which is the only common element in the trade marks under consideration and lacks inherent adaption to distinguish the trade marks of the parties as discussed under the heading The Expression.
Further, as previously stated, there is no similarity between the trade marks of the parties apart from the Expression and any finding in favour of the Opponent under section 60 would imply rights in the Expression which have not been shown to exist.
The Opponent has not established its ground under section 60.
Section 62A
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.
While discussing ‘bad faith’ in DC Comics v Cheqout Pty Ltd [2013] FCA 478; (2013) 212 FCR 194; (2013) 299 ALR 110; (2013) 101 IPR 334 Bennett J said at [62][23]:
[23] While referring to the decision of Dodds-Streeton in Fry Consulting v Sports Warehouse Inc (No 2) [2012] FCA 81; (2012) 201 FCR 565
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.
Justice Dodds-Streeton accepted that certain aspects of the behaviour described in Fry may well have been regarded as being in bad faith. Her Honour also accepted (at [171]–[172]) that subsequent modifications to a mark or name appropriated in such circumstances would not necessarily negate improper motivation and noted that Kenny J had previously held that the use of the trade mark, although including a subsequently added device, did not evidence use actuated only by proper motives.
Her Honour did not conclude, contrary to the Registrar’s submission, that exploitative conduct alone cannot ground a finding of bad faith.
The Opponent has not provided evidence which goes to this ground and has merely alleged that the Applicant has acted in bad faith while pointing to what it claims to be the Opponent’s better business methods and approvals from various bodies. These are not factors that fall for consideration under the criteria enunciated by Dodds-Streeton J and summarised by Bennett J, above, as relates to the filing by the Applicant of the application to register the Trade Mark.
However, the uncontroverted evidence of the Applicant detailed at [12], above, does, I consider, speak for itself.
The ground under section 62A is not established.
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 Opposition has not been established on any ground.
The trade mark application 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
Having been successful in this matter the Applicant is entitled to its costs which I award against the Opponent at the scale set out in the regulations.
Iain Campbell Thompson
Hearing Officer
Trade Marks Hearings
31 March 2014
4
36
0