Beats Electronics LLC v Strategies Unleashed Pty Limited

[2017] ATMO 6

TRADE MARKS ACT 1995

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

Re:Opposition by Beats Electronics LLC to registration of trade mark application 1621957 (9) - ATOMIC BEATS - in the name of Strategies Unleashed Pty Limited.

Delegate:

Heath Wilson

Representation:

Opponent: Tim Allen and Natalia Blecher of Corrs Chambers Westgarth.

Applicant: Michael Martin of Acumen IP.

Decision:

2017 ATMO 6

Opposition under section 52 of the Trade Marks Act 1995 – grounds pursued under sections 44 and 60 of the Act – reg 21.19 of the Trade Marks Regulations 1995 - Trade Mark refused registration.

Background

1. This matter concerns an opposition under section 52 of the Trade Marks Act 1995 (‘the Act’) to the registration of a trade mark. The details of the opposed trade mark application are set out below:

   Trade Mark No. 1621957

   Trade Mark: ATOMIC BEATS (‘the Trade Mark’)

   Priority Date: 14 May 2014 (‘the relevant date’)

   Owner: Strategies Unleashed Pty Limited (‘the Applicant’)

   Specification of Goods:

   Class 9: Audio speakers; Audio speakers for home; Speakers (audio equipment); Speakers for compact disc players; Speakers for computers; Speakers for record players; Speakers for tape players (‘the relevant goods’)

2. The Trade Mark was examined under section 31 of the Act and advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 9 October 2014. On 9 December 2014, Beats Electronics LLC (‘the Opponent’) filed a Notice of Intention to Oppose followed by a Statement of Grounds and Particulars (‘SGP’) on 24 December 2014.

3. The SGP set out the grounds of opposition under section 44 (relying on trade mark no. 1433368: ‘BEATS’ and no. 1477277: ‘BEATS’) and section 60 of the Act. The Applicant subsequently filed a Notice of Intention to Defend and the evidence stages commenced.

Evidence

1. On 20 May 2015, the Opponent filed the declaration of Natalia Blecher (Senior Associate at Corrs Chambers Westgarth) made 20 May 2015 with exhibits NJB-1 to NJB-3. Exhibit NJB-1 is a copy of the declaration of Rafferty Atha Jackson originally made 13 May 2014 for the purposes of a different opposition to trade mark application no. 1560972. Exhibit NJB-2 is a copy of a declaration of Paul Lindsay Blanket made 21 May 2014 also originally filed in support of the opposition to trade mark no. 1560972. Finally, exhibit NJB-3 is an unsigned declaration of Thomas P La Perle with unsworn exhibits TLP-1 to TLP-11.

2. The Opponent was unable to have the declaration of Thomas La Perle executed and filed by the due date for evidence in support (being 20 May 2015). On the next day, however, the Opponent did file the executed declaration (‘La Perle 1’) along with a request for an extension of time of one day under Reg 5.15 of the Trade Marks Regulations 1995 (‘the Regulations’). IP Australia ultimately refused the extension of time and at the same time directed that the Opponent file a request under 21.19 of the Regulations and allowed the Applicant an opportunity to comment on the Opponent’s request. No decision was made by IP Australia at that time on whether La Perle 1 would be considered in the substantive opposition.

3. The evidence stages continued. The evidence in answer filed by the Applicant consisted of statutory declarations by:

• Ajan Khanna (Director of the Applicant) made 25 September 2015.

• Jeremy Ford made 24 September 2015 with annexure JF01.

• Michael Adrian Edward Martin (Patent and Trade Marks Attorney for the Applicant) made 26 September 2015 with annexures MAEM01 to MAEM017.

• Peter Day made 24 September 2015.

1. The evidence in reply filed by the Opponent consisted of a second declaration of Thomas La Perle made 18 November 2015 (‘La Perle 2’).

2. Both parties requested to be heard on the opposition and the matter was allocated to me to be decided in my capacity as a delegate of the Registrar of Trade Marks. The parties provided written submissions and I heard the opposition in Canberra on 21 November 2016. Tim Allen and Natalia Blecher of Corrs Chamber Westgarth appeared via video link on behalf of the Opponent and Michael Martin of Acumen IP appeared in person on the Applicant’s behalf.

3. At the hearing, Mr Martin disputed whether La Perle 1 should be allowed into proceedings under Reg 21.19. After hearing the arguments from the parties’ representatives, I indicated at the hearing that I intended to allow that material in. More detailed reasoning for that finding follows below.

Regulation 21.19

1. Mr Martin spent some time highlighting the fact that La Perle 1 was late and that sufficient reason had not been given for its lateness. However, I find little utility in addressing the argument as an extension of time has already been considered and rejected by this office. In other words, there is no question that La Perle 1 was late and an application under Reg 21.19 is not a substitute for the extension of time provisions. Rather, the regulation provides:

21.19Registrar may use information available

(1)If:

(a)information that is available to the Registrar is relevant to proceedings before the Registrar; and

(b)the Registrar has reason to believe that the information is not known to a party to the proceedings; and

(c)the Registrar proposes to take the information into account in making a decision in the proceedings;

before making the decision the Registrar must:

(d)provide the information to the party; and

(e)give the party a reasonable opportunity to make representations about the information.

(2)For the purposes of paragraph (1)(e), the representations may be made in writing or at a hearing or by such other means as the Registrar reasonably allows.

1. The Trade Marks Office Manual of Practice and Procedure (‘the Manual’) now makes it clear under Part 51.2.6 that: ‘As a general rule evidence that is not filed in time is not considered by the delegate when deciding the opposition’. There are exceptions to the general rule but the filing party needs to address:

   • Why the evidence was filed after the due date
   • If the evidence stage in proceedings has concluded and the matter is ready for determination, why the evidence was not filed earlier
   • What the evidence shows
   • Why that information is crucial to the delegate’s decision
   • Why it is in the public interest to have the information considered
   • What is the balance of convenience for the parties if the information is considered.[1]

   [1] I note this part of the Manual was added on 15 October 2015, after the evidence in support was filed.

2. I would also mention the cautionary comments made by the hearing officer in TWG Tea Company Pte. Ltd v Tsit Wing International Company Limited:

   I am reluctant to accede without protest to an unsettling assumption that appears to have been made here by both parties. This is the assumption that, post commencement in April 2013[2] of stricter extension of time for evidence provisions as well as the removal of formal further evidence provisions, regulation 21.19 might almost be a given to assist in ‘wrapping up loose ends’ at the time an opposition comes before a hearing officer. Emphatically, opposing parties who intend to rely on such an assumption will do so at their peril. There remains an indisputable onus upon a party submitting evidence to exercise careful oversight of that process at all times. If the onus is properly met, there will be far fewer cases of omission such as those before me here. And oppositions should arrive at the end of the process in a properly organized state, with all parties clear about what evidence is safely in and what is in dispute, and if so, exactly why.[3]

   [2] By the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No. 1).

   [3] [2015] ATMO 64, [46].

3. Here, La Perle 1 was filed one day after the expiration of the evidence in support stage and it constitutes the bulk of the Opponent’s evidence. It is evidence the Opponent is relying upon to demonstrate the requisite reputation in its trade mark(s) under the section 60 ground of opposition. Most importantly, that material (albeit in an unsworn form) is attached to the declaration of Natalia Blecher and accordingly already forms part of the evidence.

4. The Applicant has therefore had ample opportunity to respond to the contents of La Perle 1 within its own evidence in answer and I find that any inconvenience to the Applicant is minimal. Conversely, the inconvenience to the Opponent may be significant if I refuse to allow it in. It is in the public interest to conduct trade mark oppositions in an efficient manner and, in the circumstances, I find it would be unreasonably bureaucratic to refuse to consider this material in deciding the opposition.

5. These are not circumstances where the other party is unaware of the material that would be considered and require a further opportunity to file evidence in answer to it. Instead, there simply remained some uncertainty as to the weight to be given to the material already before the Registrar.

6. Under these circumstances, I would resolve that uncertainty and allow La Perle 1 into proceedings.

Onus

1. The Opponent bears the onus of establishing at least one of the grounds of opposition on the civil standard of the balance of probabilities.[4]

   [4] 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].

Reasons

1. Section 60 of the Act provides:

   60Trade mark similar to trade mark that has acquired a reputation in Australia

   The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:

   (a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and

   (b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.

   Note:For priority date see section 12.

2. Section 60 has two major elements that must be satisfied for the ground of opposition to be established. The Opponent must firstly demonstrate the existence of a reputation in a trade mark before the priority date (14 May 2014). The level of that reputation must be such that a ‘significant’ or ‘substantial’[5] number of consumers within the market would have an awareness of the trade mark. The assessment of what is ‘significant or substantial’ must be properly and sensibly applied[6] and may depend on the specialised nature of the relevant market.[7]

   [5] 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.

   [6] “Bali” Trade Mark [1969] RPC 472, (496).

   [7] Le Cordon Bleu BV v Cordon Bleu International Ltee (2001) 50 IPR 1; [2000] FCA 1587, [20].

3. The Opponent bears the onus of establishing the requisite reputation which cannot be assumed but rather must be established as a matter of fact.[8]

   [8] ConAgra Inc. v McCain Foods (Aust) Pty Ltd, (1992) 33 FCR 302 (77) (‘ConAgra’)

4. For the second limb of the section, the nature and extent of the demonstrated 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.[9]

   [9] See Australian Woollen Mills Ltd v F. S. Walton and Company Ltd [1937] HCA 51; (1937) 58 CLR 641.

The Opponent’s Evidence of Use

1. Despite my decision to allow La Perle 1 into these proceedings, the Opponent’s evidence as a whole still has certain limitations and deficiencies. In particular, the statutory declarations of Paul Blanket and Rafferty Jackson attached to the declaration of Ms Blecher do not include any of the exhibits referred to in those two declarations. As a result, some of the assertions made in those declarations stand unsupported and I am unable to ascertain the nature of the use of the Opponent’s trade marks. Further, those two declarations were made at a different time and for the purposes of a different trade mark opposition.

2. Another notable omission in the Opponent’s evidence are sales or advertising figures for the Opponent’s products in Australia bearing the various ‘BEATS’ trade marks. The declaration of Rafferty Jackson mentions advertising and sales figures which were presumably attached to the original of that declaration as exhibits, but I do not have those exhibits before me. Nevertheless, while reputation may be inferred from a high volume of sales combined with substantial advertising expenditure and other promotions[10], there remain other ways in which the Opponent may demonstrate reputation in a trade mark.  

   [10] McCormick & Co Inc v McCormick (2000) 51 IPR 102, (127).

3. Some of the exhibits to La Perle 1 are poor copies of extracts from other sources. Exhibits TLP-5 and TLP-6 to La Perle 1 are illegible but are described as ‘Harvey Norman’ and ‘JB Hi Fi’ catalogues and presumably feature instances of use. In addition, parts of what I assume to be exhibit TLP-10 (although this is not clear from the declaration) are also illegible.

4. Having made these observations, the Opponent’s evidence demonstrates the following. The Opponent was established in 2008 by artist and record producer Andre ‘Dr. Dre’ Young and Chairman of Interscope Geffen A&M Records and producer Jimmy Lovine. Since that time, the Opponent has used trade marks including ‘BEATS’, ‘BEATS by Dr. Dre’ and a stylized ‘b’ Logo: upon or in relation to the production, sale and marketing of headphones, earphones and wireless speakers.

5. The Opponent’s arguments under section 60 depend on the reputation of trade marks ‘BEATS’ (primarily), but also ‘BEATS BY DRE’ and other formative BEATS trade marks (e.g. ‘BEATS SOLO’, ‘BEATS MIXR’, ‘BEATS TOUR’, ‘POWERBEATS’, ‘BEATS PILL’, ‘URBEATS’, ‘BEATS PRO’ and ‘HEARTBEATS’).

6. The Opponent is also the owner of numerous trade mark applications and registrations in relation to the relevant goods. The common element between all of the Opponent’s many Australian trade marks is the word ‘BEATS’ (including, in particular, ‘HEARTBEATS’; ‘CLUB BEATS’; ‘POWERBEATS’; ‘BEATS PILL’; ‘IBEATS’ and ‘URBEATS’).

7. From the examples in the evidence, I note that the Opponent’s labeling for its products invariably contains an emphasis on the word ‘BEATS.’ Even when other trade marks appear on the packaging or product, the trade mark ‘BEATS’ is presented in a different colour (red) to the rest of the expression, making it the most memorable part for consumers. This is the case for the Opponent’s ‘Beatspro’ headphones with packaging that also features the trade mark ‘beats by dr.dre’. The Opponent’s ‘BEATS’ trade mark is similarly highlighted on the Opponent’s portable speaker products.

8. Since 2009, the Opponent’s ‘BEATS’ branded headphones and earphones products have been available on its website and via retail outlets in Australia. In July 2010, the Opponent first distributed its products through Harvey Norman and later through JB Hi Fi in July 2011. As mentioned, it is difficult to determine from La Perle 1 exactly how some of the trade marks appear on the promoted goods. However, the historical extracts from the Opponent’s Australian website (‘ indicate a continuing prevalence of the use of ‘BEATS’ on the relevant goods.

9. The Opponent’s ‘BEATS’ branded speakers were launched in Australia in September 2012. From December 2012, the Opponent’s products in Australia included BEATBOX (wireless speakers) and BEATS PILL (wireless speakers) but also BEATSPRO (Headphones), BEATS STUDIO (headphones), BEATS POWERBEATS (earphones) and BEATS HEARTBEATS (earphones). The evidence indicates that these BEATS products have been advertised and sold through major Australian retailers ‘JB Hi FI’, ‘Harvey Norman’, ‘Dick Smith’, ‘Australia Post’, and ‘The Good Guys’. From July 2014, the Opponent was acquired by Apple Inc. and the Opponent’s products have thereafter been available through Apple stores and on Apple’s Australian website. 

10. At the hearing, Ms Blecher and Mr Allen highlighted the statement made in the declaration of Rafferty Jackson that in 2012 ‘BEATS’ products held a market share of 17.5% in the overall headphone market and a market share of 40.5% in the premium headphone market (>US$100) within Australia. In addition, the declaration of Mr Blanket (lecturer in advertising and marketing at the Macquarie Graduate School of Management) supplies a view on the notion of brand extension in the audio marketplace and his opinion of the substantial reputation of the Opponent’s ‘BEATS’ brand. I particularly note the reference in that declaration to the Opponent’s ‘sub-branding practices’ which I will return to later.

11. For the purposes of section 60, advertisements from television, radio, magazines or newspapers[11] may be shown but, in our current age of social media, advertisements and promotions via social media channels are equally valid. If such evidence from social media channels is global in nature (as is often the case), the Opponent must demonstrate how such evidence translates into an awareness or cognisance amongst Australian consumers. In this regard, I refer to the following comments of the Registrar’s delegate in Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl Gesellschaft Gmbh & Co KG:

    The credit, image and values projected by a trade mark attaches to the “esteem” component of the reputation as do the public events and other trader’s marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, “contra deals” and so forth.[12]

    [11] ‘ConAgra’; (234)

    [12] (1999) 47 IPR 423, 436.

12. In the Opponent’s evidence, the number of ‘likes’ on ‘Facebook’ and followers on ‘Twitter’ along with the number of views on ‘YouTube’ are very substantial. While determining the general awareness amongst Australian consumers from worldwide social media figures may be a difficult task, the substantial size of the figures cannot be overlooked. An overseas reputation for trade marks such as those owned by the Opponent often precedes its use in Australia, and, as Justice Lockhart commented in Conagra Inc. v McCain Foods (Australia) Pty Ltd:

    It is no longer valid, if it ever was, to speak of a business having goodwill or reputation only where the business is carried on.  Goods and services are often preceded by their reputation abroad.  They may not be physically present in the market of a particular country, but are well known there because of the sophistication of communications which are increasingly less limited by national boundaries, and the frequent travel of residents of many countries for reasons of business, pleasure or study.[13]

    [13] ‘Conagra’; (233-234).

13. While the Opponent was initially concerned with the sale and promotion of headphones and earphones, it nevertheless obtained a significant presence in Australia before the relevant date for its wireless speakers. Such goods are often sold via the same trade channels (and often alongside the other) and to the same consumers.

14. The Opponent’s products (headphones) have also been bundled together with other products such as mobile phones (e.g. the ‘HTC Sensation’ and ‘HTC Rezound’) and the Opponent’s ‘BEATS Audio’ technology has been installed in motor vehicles (i.e. specific ‘Chrysler’, ‘Dodge’ and ‘Fiat’ models). Furthermore, there are numerous examples within La Perle 1 of celebrities (high profile musicians, DJs and sportspersons) endorsing the Opponent’s audio products in various ways. This evidence of cross promotion and endorsements contributes greatly to the esteem in which the Opponent’s products are likely to be held within the audio industry and amongst relevant consumers.

1. Taking into account the entirety of the Opponent’s evidence, I am satisfied of the significant reputation the Opponent’s ‘BEATS’ trade marks enjoyed at the relevant date in Australia. 

Likelihood of deception or confusion

1. For completeness, I will mention the Applicant’s evidence and the particular use undertaken to date, keeping in mind that I must consider notional use of the Trade Mark within the scope of the application. The Applicant currently sells a Home Theatre speaker system featuring the Trade Mark. The system consists of three speakers (one sub-woofer and two side speakers). Since July 2014 (after the relevant date), the Applicant supplied its product to Australian retailers and the product is also promoted on various websites controlled by the Applicant. The product is described as a ‘JINX^® Liquid Sound^® Atomic Beats 2.1 Home Theatre Speaker System’. The Trade Mark appears prominently on the box for the Applicant’s product. On the product itself, the expression ‘Liquid Sound’ is more prominent than the Trade Mark. Mr Khanna (director of the Applicant) declares that he is not aware of any confusion between his company’s product and the Opponent’s brand. Given the short period of use and its limited distribution, which only occurred after the relevant date, I find a lack of actual confusion between the trade marks in the marketplace unsurprising.

2. The likelihood of deception or confusion should the Trade Mark be used upon or in relation to the claimed goods is affected by the similarity of the respective trade marks. Under section 60, it is not a requirement that the respective trade marks be deceptively similar[14], but there must be some nexus of similarity between them.[15]

   [14] As defined under section 10 of the Act.

   [15] Reece Pty Ltd v Rogers Seller & Myhill Pty Ltd [2010] ATMO 5; (2010) 85 IPR 647.

3. In the current opposition, there is a similarity between the Trade Mark and the Opponent’s trade mark ‘BEATS’. I note that the Trade Mark not only wholly contains ‘BEATS’ but, as mentioned earlier, the Opponent has also demonstrated a propensity to use ‘BEATS’ on its audio products in combination with other words (e.g. ‘POWERBEATS’; ‘JUST BEATS’; ‘HEARTBEATS’ and ‘CLUB BEATS’). Due to this established sub-branding practice I find that there is a real, tangible danger that relevant consumers would be confused as to the trade source of the product even if such confusion may not always persist up to the point of an actual sale.[16] 

   [16] See Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82; (1954) 91 CLR 592.

4. Taking into the nature and extent of the reputation in the trade mark ‘BEATS’, there is a real likelihood that speakers bearing the Trade Mark may be seen by consumers as a sub-brand for the Opponent’s products and, if that occurred, there is the further possibility that the word ‘ATOMIC’ in the Trade Mark may be seen as a figurative descriptor for the Opponent’s product with the element ATOMIC being insufficient to distinguish it from the similar products of the Opponent.

5. I am therefore satisfied on the balance of probabilities that the ground of opposition under section 60 of the Act has been established.

6. As a ground of opposition under the Act has been established, it is not necessary for me to consider the remaining ground of opposition pressed by the Opponent (namely, section 44). However, I note that all grounds under the Act would be available to the Opponent in the event of an appeal from this decision.

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. A ground of opposition has been established under the Act. As a result, trade mark application no. 1621957 is refused registration.

Costs

1. As the Opponent is the successful party, I award costs against the Applicant under section 221 of the Act in line with the amounts set out in Schedule 8 of the Regulations.

Heath Wilson

Hearing Officer

Oppositions and Hearings

20 January 2017