Braintree Communications Pty Ltd v PayPal Inc

[2018] ATMO 90

TRADE MARKS ACT 1995

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

Re:Opposition by Braintree Communications Pty Ltd to application under section 92 of the Act by PayPal, Inc. to remove trade mark number 860587 (9, 38 and 42) BRAINTREE & Device - in the name of Braintree Communications Pty Ltd.

Delegate:	Debrett Lyons
Representation:	Opponent:  Martin Earley, Registered Trade Mark Attorney, of Baxter IP Patent and Trade Mark Attorneys. Applicant: Shauna Ross of Counsel instructed by King & Wood Mallesons.
Decision:	2018 ATMO 90 Trade Marks Act 1995 - application to remove a trade mark from the Register under section 92(4)(b) - use of the trade mark within the relevant period - trade mark to remain on the Register for reduced goods and services.

Background

1.On 11 October 2016, PayPal, Inc. (‘the Applicant’) applied for the removal of a trade mark from the Register of Trade Marks under section 92(4)(b) of the Trade Marks Act 1995 (‘the Act’).  The registered trade mark sought to be removed is in the name of Braintree Communications Pty Ltd (‘the Owner’ or ‘the Opponent’) and relevant details of the trade mark are:

Number	Trade mark	Class and specification
860587	Class 9: Transmission, receiving and storage equipment, apparatus and systems; including but not limited to computer software, computer hardware, macros, CD-ROMs, disks and modems; all associated parts, accessories and fittings Class 38: Telecommunication services; telecommunication services namely short duration transaction systems used in relation to, but not limited to, payment server systems, alarm systems, security systems, surveillance systems, defence systems, lottery systems, gambling systems, telemetry systems, electronic funds transfer systems, point of sale systems, packet handling systems and transaction gateway systems Class 42: Computer programming services; computer design services; services for maintenance and modification of computer software; computer program design consultancy services; providing access to and leasing access time to computer databases; on-line computer services

2.The section 92(4)(b) application was made for all the goods and services for which the trade mark is registered.

3.The Owner filed a Notice of Intention to Oppose the application for removal of the trade mark and the Owner filed a Statement of Grounds and Particulars (‘the SGP’).  The Applicant subsequently filed a Notice of Intention to Defend the application for removal.

4.The Owner filed one declaration of Peter Richard Mason, director of the Owner, dated 24 May 2017 (‘the Mason Declaration’) as evidence in support of its opposition. The Applicant did not file evidence in answer with the result that, in accordance with Reg 5.14(6) of the Trade Marks Regulations 1995, there was no evidence in reply stage and the evidence stages of the opposition process were complete.

5.The parties asked to be heard and the hearing was set down in Canberra for April 3, 2018.  Martin Earley, Registered Trade Mark Attorney, of Baxter IP Patent and Trade Mark Attorneys, appeared on that day on behalf of the Owner.  Shauna Ross of Counsel, instructed by King & Wood Mallesons, appeared on the Applicant’s behalf.

The Law

6.Section 92 of the Act relevantly provides:

92 Application for removal of trade mark from Register etc.

(1) Subject to subsection (3), a person may apply to the Registrar to have a trade mark that is or may be registered removed from the Register.

(2) The application:

(a) must be in accordance with the regulations; and
(b) may be made in respect of any or all of the goods and/or services in respect of which the trade mark may be, or is, registered.

(3) An application may not be made to the Registrar under subsection (1) if an action concerning the trade mark is pending in a prescribed court, but the person aggrieved may apply to the court for an order directing the Registrar to remove the trade mark from the Register.

Note:  For prescribed court see section 190.

(4) An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds:

(a) …

(b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non-use application is filed, and, at no time during that period, the person who was then the registered owner:

(i) used the trade mark in Australia; or
(ii) used the trade mark in good faith in Australia;

in relation to the goods and/or services to which the application relates.

Note 1:  For file and month see section 6.

Note 2:  If non-use of a trade mark has been established in a particular place or export market, then instead of the trade mark being removed from the Register, conditions or limitations may be imposed under s.102 on the registration of the trade mark so that its registration does not extend to that place or export market.

(5) …

7. With regard to the burden of proof and the requirements necessary to rebut the allegation of non-use, section 100 of the Act relevantly provides:

100Burden on opponent to establish use of trade mark etc.

(1)     In any proceedings relating to an opposed application, it is for the opponent to rebut:

(a)       …

(b)       …

(c)       any allegation made under paragraph 92(4)(b) that the trade mark has not, at any time during the period of 3 years ending one month before the day on which the opposed application was filed, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services.

(2)     …

(3)     For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if:

(a)       the opponent has established that the trade mark, or the trade mark with additions or alterations not substantially affecting its identity, was used in good faith by its registered owner in relation to those goods or services during that period…

8.As the application for removal was filed on 11 October 2016, the period in which the Opponent must establish use of the trade mark is the three year period ending on 11 September 2016 (‘the Relevant Period’).

Submissions and Reasoning

9.The Applicant’s position is that the evidence fails to establish that the trade mark (or trade marks with alterations or additions that do not substantially affect the identity of the registered trade mark) has been used in respect of all the goods and services during the Relevant Period. In fact, the Applicant submits that there has been no use of the trade mark at all. Further, that certain variations of the trade mark relied upon by the Owner to establish use in the Relevant Period do not fulfil the criteria of sections 100(3)(a) and 7(1) of the Act. Furthermore, that the evidence of asserted use is undated or defective in other ways. Finally, that there is no cause for the Registrar to exercise her discretion under section 101(3) of the Act to allow the Trade Mark to remain on the register in spite of these failings.

1. The Owner’s submissions can be best re-assembled by collating those portions which describe the Owner’s business and its offerings.  So, after referring to various awards received by the Owner from the years 2001 to 2004, the written submission is that the Owner:

   … continues to trade on this reputation and great technology but always with its superior design capabilities to reach new and modified solutions in the always changing technology of its specialised area of short duration transaction networks such as EFT and ATM communication solutions and data communications in general.

2. Thus, the claim is that the Owner offers technological “solutions” (a term I will interpret to mean “goods” and/or “services”) in the area of short duration communication networks.  This is described as a specialised area and I accept that as correct.  The focus of the communications is to facilitate financial transactions such as those made via ATM machines or by use of EFTPOS.  There is a claim to use of the trade mark in relation to data communications more generally and I will say something of that later.

3. Specifically,  the Owner states in its written submissions that it:

   … offers very particular types of products and services including:

   ·devices that allow older EFTPOS and ATM point-of-sale systems to connect to a wireless or digital IP (Internet Protocol) network like DSL

   ·an ISDN network gateway

   ·a synchronous terminal server designed for transaction and other data processing with synchronous or asynchronous devices such as PCs, automatic teller machines and EFTPOS devices or applications connected to a Local Area Network (LAN).

   ·a Synchronous Asynchronous Terminal Server

   ·EFTPOS transmission service, which is used to provide an EFTPOS transaction delivery service to merchants

   ·development of computerised hardware and software and repairs and support thereof

   ·a centrally-hosted software system that allows for the installation, configuration and management of the entire population of payment gateways on a network.

4. I note here that in the SGP the Owner specifies that it has used the trade mark:

   ·on or in connection with class 9 Goods identified in paragraph 3 of the SGP – Axon E2210, AETA, STS-8, SATS, Synapse 400, Glia – “all of these products are transmission, receiving and storage equipment, apparatus and systems”;

   ·in respect of class 38 Services – telecommunication systems – the creation, implementation, support and maintenance of telecommunication systems, comprising the products identified in paragraph 3 of the SGP (which are the Goods referred to with respect to class 9), services to merchants that allow them to authorise credit card or debit transaction processing (Short Duration Transaction Networks) and services to telco companies networks that enable those companies to transport EFTPOS and ATM transactions information; and

   ·in respect of class 42 Services – computer programming, creation and maintaining bespoke software.

5. I am in agreement with the Applicant’s assessment that the evidence shows only two examples of possible use of the trade mark as it is registered.  The Owner states that the trade mark is used on the “Axon G4020” product as shown in Exhibit PRM-1 to the Mason Declaration, reproduced below:

6. The Axon G4020 appears from the photograph to be a modem or similar.  The photograph is not dated or date referenced but, for present purposes, I observe that the sign appearing on the goods is not the exact trade mark as registered.[1]

   [1] In spite of the (incorrect) statement in the Mason Declaration at [49] that the sign is use of the registered trade mark.

7. The second piece of evidence is the image of a key chain exhibited to the Mason Declaration, again not dated, but a piece of merchandising so far outside the goods and services of the registration that I can ignore it without further comment.

8. I find that there has been no relevant use of the trade mark but, as stated, the Owner relies in the main on the use of the following signs.  First is the sign used on its website as shown below, subject to the unsupported statement: “not including titles through mark”.

1. The second is described as “the logo mark on Powerpoint presentations”, shown below:

1. Third is “use of the logo mark on PDF downloads of technical papers used in explaining the technology being provided as a product or service” shown below:

1. These variations on the trade mark include one or more of the following additions: (i) the word “communications” in the same font, colour and size of the word “braintree”; (ii) underlining; and (iii) website details, telephone number and other contact details.  Further, there is slight variation in the positioning of the word “Braintree” relative to the device element when compared with the registered trade mark.

2. The Opponent referred me to the relatively recent case of Vaishi Enterprises Pty Ltd v GSM Food and Spices Pty Ltd [2018] ATMO 7 (22 January 2018) where Hearing Officer Richards considered an application under section 92 to remove from the Register the composite mark shown below covering (relevantly) milk products in class 29 on the ground of non-use:

1. The removal opponent in that case established use of the trade mark shown below for yoghurt and the question arose as to whether the use was use of the registered trade mark:

1. Hearing Officer Richards wrote:

   The Opponent’s evidence shows use of the Trade Mark on the Label with some additions and alterations. The immediate question is whether those additions or alterations substantially affect the identity of the Trade Mark.

   Arguably, additions appear on a white background on either side of the yellow block. The information appearing there is standard fare for retail foodstuffs, such as origin labelling, nutrition information, ingredients and instructions for safe storage. I do not take these as additions to the Trade Mark itself, but even if I was wrong here, the nature and positioning of this information means that it could not affect its identity.

   The Label adds to the right of the word ‘NATURAL’ the descriptor ‘SOUR’, and the tagline ‘A Taste of India’ at the bottom left. ‘NATURAL YOGHURT’ and ‘NATURAL SOUR YOGHURT’ mean the same thing, are both highly descriptive of the goods, and offer little in the way of distinctiveness. The addition of the word ‘SOUR’ does not alter the identity of the Trade Mark. Turning to the tagline, this is without doubt the most significant of the additions or alterations – the phrase would arguably be registrable in its own right. However, in combination particularly with those distinctive paired elements ‘MEHAK’ astride the bucolic photograph, the tagline’s positioning and relative size means it does not substantially affect the identity of the Trade Mark.

   There are many alterations. Rather than list each of them, I just note that there were obviously many (mostly very slight) changes to fonts, colours and outlines made in between designing the Trade Mark and printing it onto the Labels. These alterations are immaterial to the identity of the Trade Mark. One alteration does not fall within the above grouping is the shift of ‘RENNET FREE’ from the left to the right of the Trade Mark, which in the process has relegated the ‘2kg’ to a product information panel. In my view, since these are again very descriptive elements, their movement has also not affected the identity of the Trade Mark.

2. I find that the reasoning above can be applied to the bulk of the incidental material appearing along with the word “Braintree” and the brain device.  The only additional term deserving attention is the word “communications”.  The uncontradicted evidence is that the Owner has maintained a website at since 2006. During the Relevant Period a screenshot of the homepage of that site carries the company tagline: “simple solutions to complex communication problems”. That homepage goes on in more detail to state that “Braintree specialises in the design and production of data communication devices and embedded software for Short Duration Transaction Networks (SDTNs).” I find that within the context of the Opponent’s business offering the word “communications” is utterly descriptive. Subject to what I have to say very shortly regarding the breadth of evidence of use, the nominated class 9 goods are in essence communication (or telecommunication) devices and the class 42 services relates to communication (or telecommunication). I find that the word “communication” is, in respect of the goods and services for which use has been shown, wholly descriptive and non-distinctive and in terms of section 100(3)(a) of the Act are additions to the Trade Mark which do not substantially affect its identity.

3. As stated already, the Mason Declaration is the only evidence.  There, Mr Mason describes himself as a director and co-founder of the Opponent. The declaration stands apart from many of its kind adduced in cases of this sort in the sense that the goods upon which the trade mark has been used during the Relevant Period are described with exacting precision.  So much so that it is clear that the trade mark has only been used, as the Opponent’s website claimed, on data communication devices for Short Duration Transaction Networks (SDTNs). 

4. The registered class 9 goods are: “Transmission, receiving and storage equipment, apparatus and systems; including but not limited to computer software, computer hardware, macros, CD-ROMs, disks and modems; all associated parts, accessories and fittings”.   I do not find that there is evidence supporting the entire breadth of that description and my conclusion is that the scope of the registered goods should be reduced to: 

   Transmission, receiving and storage devices for short duration transaction networks (SDTNs). 

5. My assessment of the Mason Declaration is that the Owner is not itself the provider of class 38 telecommunication services.  Those services are provided by others.  I find that there is no support for the class 38 specification and direct that the whole class be deleted from the registration.

6. Finally, the registered class 42 services are: “Computer programming services; computer design services; services for maintenance and modification of computer software; computer program design consultancy services; providing access to and leasing access time to computer databases; on-line computer services”.  My observation is that support for the continuance on the Register for those services is slim.  My reading of the Mason Declaration is that much store is placed on the effort put into the maintenance and development of data communication software which, to use the Owner’s words, is “embedded software”.  The Owner’s written submissions include the passage:

   The goods and services are general categories and therefore would fundamentally include software which is embedded and designed to meet the unique requirements, developed and customised with flexible solutions customised to our client's specific requirements.

   Software is "upgraded" in service arrangements and software is developed for "new services".  Software and hardware is provided with new solutions and new services. 

7. Although I note in the evidence use of the trade mark in connection with certain service agreements, I have concluded that the broad scope of that offering is in connection with the maintenance of data communication systems as already described.[2]  For these reasons I decide that that class 42 services should be limited to:

   Maintenance and modification of computer software, all in connection with transmission, receiving and storage devices for short duration transaction networks (SDTNs). 

   [2] Mason Declaration, [92-3].

8. I add, finally, that although the Owner made certain submissions regarding the exercise of my discretionary power, I am not persuaded by those submissions that the trade mark should be preserved for any wider description of goods or services than I have just set out.

Decision

1. The application for removal under section 92(4)(b) of the Act has been partially successful. Under section 101(1) of the Act, I therefore direct that trade mark registration 860587 be partially removed from the Register one month from the date of this decision.  If the Registrar is served with a notice of appeal on or before the end of that period, the registrations will be subject to the court’s decision.

2. The effect of the removal is to be that the specification of goods and services of the registration will then read:

   Class 9:  Transmission, receiving and storage devices for short duration transaction networks (SDTNs). 

   Class 42: Maintenance and modification of computer software, all in connection with transmission, receiving and storage devices for short duration transaction networks (SDTNs). 

Costs

1. An award of costs in these proceedings normally follows the event.  In this case however I find that each party has had a measure of success and so I have made no award of costs.  

Debrett Lyons
Hearing Officer
Oppositions and Hearings
7 June 2018