Bruce Parncutt v Lion Capital LLP

[2013] ATMO 60

TRADE MARKS ACT 1995

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

Re:Opposition by Bruce Parncutt (formerly Lion Global Investors Ltd) to registration of trade mark application 1414641(36) - LION CAPITAL - filed in the name of Lion Capital LLP.

Delegate:	Alison Windsor
Representation:	Opponent:  Siobhan Ryan of counsel instructed by Davies Collison Cave, patent and trade mark attorneys Applicant:  Celia Davies, partner of Herbert Smith Freehills
Decision:	2013 ATMO 60 Section 52 opposition:  Grounds pursued under ss 58, 60 and 62A –section 58 ground established – registration refused.

Background

1. On 16 March 2011 Lion Capital LLP (‘the Applicant’) filed an application to register a trade mark under the provisions of the Trade Marks Act 1995 (‘the Act’).  Details of the application at the time of filing are shown below:

Application No:         1414641
Divisional of:             1105076 - filed 22 March 2006

Services claimed:      Financial affairs; monetary affairs; financial services; corporate finance; private equity; investment services; capital, fund and trust investment services; investment management services; mutual fund, collective investment scheme and hedge fund services; unit trust services; financial and investment planning and research; advisory, consultancy and information services relating to all the aforesaid services; and none of the above relating to sponsorship activities

Trade Mark:             LION CAPITAL (‘the Trade Mark’)
Endorsement: Provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied.

1. The application was examined as required by section 31 of the Act and in due course accepted for possible registration under the provisions of paragraph 44(3)(b).[1]  The acceptance was advertised in the Australian Official Journal of Trade Marks on 7 April 2011.

   [1] The reasons the examiner applied this paragraph of the Act are not clear from the file itself, however it appears that the acceptance was based upon the reasons for accepting the parent application, 1105076. That application was accepted under the provisions of paragraph 44(3)(b) on the basis of letters of consent from the proprietors of trade mark registrations which had been raised as grounds for rejection under section 44 of the Act.

2. On 30 June 2011 Lion Global Investors Limited (‘LGI’) filed Notice of Opposition (‘the Notice’) to registration of the application.  The parties then served and filed their evidence as provided for by the Trade Marks Regulations 1995 (‘the Regulations’).

3. Once the evidence stages were complete, both parties requested a hearing, and the matter was eventually set down to be heard in Melbourne on the morning of 19 July 2013.

4. On 2 July 2013 the Applicant filed a divisional application from the Trade Mark, which was given the number 1566151. Section 46 of the Act provides the rules which relate to a divisional application as follows:

   (1)A divisional application must:

   (a)    be for the registration of the trade mark to which the parent application relates; and

   (b)    specify the goods and/or services to which it relates; and

   (c)    specify the goods and/or services that are to remain in the parent application.

   Note:  For divisional application and parent application see section 45.

   (2)When a divisional application is made, the Registrar must, unless the parent application has lapsed, amend the parent application by excluding the goods and/or services in respect of which the divisional application is made.

   Note:  Section 204 requires the Registrar, where no time or period is specified for doing a thing, to do the thing as soon as practicable.  However, it is possible that a parent application will lapse before it is practicable for the Registrar to amend it under subsection (2) of this section.

5. Application 1566151 specified the services which were to be retained in its parent application, namely number 1414641 which is the subject of this opposition.  The services to remain are ‘private equity, none relating to sponsorship activities’.  On 11 July 2013 the service specification of 1414641 was amended to encompass only this item.

6. Early in the morning of 19 July 2013, the legal representative of Lion Global Investors Ltd advised (via e-mail) that rights as the opponent in the opposition had now become vested in Mr Bruce Parncutt (henceforth ‘the Opponent’), and that the opposition was to proceed in his name pursuant to section 53 of the Act. [2] 

   [2] Section 53 provides:

7. The parties appeared before me in my capacity as a delegate of the Registrar of Trade Marks at the appointed time.  The Opponent was represented by Ms Siobhan Ryan of counsel, instructed by Nick Holmes of Davies Collison Cave, Patent and Trade Mark Attorneys.  The Applicant was represented by Ms Celia Davies, a partner of Herbert Smith Freehills.

Evidence provided

1. The evidence provided by the parties consists of the following declarations:

Evidence in support

• Statutory Declaration of Bruce Parncutt, Managing Director of Lion Capital Pty Ltd, made on 9 September 2011 and with Exhibits BP-1 to BP-3 (‘Parncutt 1’).

• Statutory Declaration of Nick Holmes, legal practitioner, made on 20 September 2011 and with Exhibits NH-1 to NH-7.[3]

Evidence in answer

• Statutory Declaration of Olivia Kwok, legal practitioner, made 23 March 2012 and with Exhibits OSK-1 to OSL-3 (‘Kwok 1’).

• Statutory Declaration of Olivia Kwok, legal practitioner, made23 April 2012 and with Exhibit OSK-1 (‘Kwok 2’).

  [3] The Opponent subsequently advised that it would not be relying upon this declaration.  I have therefore not taken its contents into account in making this decision.

Evidence in reply

• Statutory Declaration of Bruce Parncutt made 22 October 2012 (‘Parncutt 2’)

• Statutory Declaration of Eduard Eshuys made 16 October 2012

• Statutory Declaration of David Clarke made 15 October 2012

• Statutory Declaration of Roger Colman made 15 October 2012

• Statutory Declaration of Charles Farquharson made 17 October 2012

• Statutory Declaration of Polly Mazaris made 25 October 2012

• Declaration of Eric Beecher made 16 November 2012

1. Both parties also provided detailed written submissions and supported these orally at the hearing.

A Preliminary matter

1. At the outset, Ms Davies raised an objection to the change of the opponent from LGI to Bruce Parncutt. She said that LGI was involved in a multi-country trade mark dispute and as a result of this dispute, certain of its trade marks had lapsed. She said that she could not see that any real transfer of rights had taken place as Bruce Parncutt, on behalf of Lion Capital Pty Ltd effectively controlled those rights from the beginning. She queried the material effect of this change as she considered that it did not appear to fit into the wording of section 53. She suggested that if the transfer of rights or interest meant that LGI no longer had any interest in continuing the opposition, then it would be appropriate for the hearing to be aborted.

2. I suspended the hearing for a short period while Ms Ryan took advice from Mr Holmes.  They then advised that a confidential agreement exists between LGI and Mr Parncutt with respect to the interests in the opposition, which Mr Holmes stated have been formally transferred to Mr Parncutt. 

3. Ms Davies continued to object that the transfer of rights or interest to Mr Parncutt did not seem to fit within the provisions of section 53. At this stage I decided that since Mr Parncutt had provided the bulk of the evidence on behalf of LGI, and appeared to be both the user of the Trade Mark and the person with the interests in it in Australia, the transfer of interests in the opposition from LGI to Mr Parncutt did not appear to have any material effect on the proceedings. Therefore the hearing was to proceed as originally intended.

Onus and grounds pursued

1. Both parties accepted that the onus of establishing a ground of opposition is upon the Opponent, and that the standard of proof is the civil standard of the balance of probabilities.[4]  The date at which the ground of opposition must be established is the date of filing of the Trade Mark (‘the relevant date’).[5]  I note that since the Trade Mark was filed as a divisional application, it claims priority from the parent application which was filed on 22 March 2006.

   [4] See, for example, 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) 82 IPR 13; [2009] AIPC 92-355 per Sundberg J at [22] to [26]; NV Sumatra Tobacco Trading Company v British American Tobacco Services Limited [2011] FCA 1051; (2011) 283 ALR 743 per Greenwood J at [16] to [32]; and Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (2012) 94 IPR 551 per Dodds-Streeton J at [13].

   [5] Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 595.

2. While the Notice canvassed most grounds of opposition provided for by the Act, at the hearing the Opponent only pursued grounds under sections 58, 60 and 62A. I regard the remainder of the grounds set out in the Notice as having been abandoned.

Discussion and Reasons

1. As noted previously, the Opponent must establish any ground of opposition as at the filing date of the application.  Because the Trade Mark is a divisional application, the relevant date is the filing date of the parent application, namely 22 March 2006.  The opposition is in respect of a single service in class 36, being ‘private equity, none relating to sponsorship activities’. 

2. Ms Ryan stated that the Opponent had been significantly disadvantaged by the ‘eleventh hour’ restriction of the Applicant’s specification of services from the original broad claim to the single item based around ‘private equity’.  She also gave her opinion that the item ‘private equity’ could be regarded more as a good rather than a service and queried its relevance within the specification.  Ms Davies countered by noting that the item had always been present in the service specification, and that the Opponent could have dealt with it at any time during the process. 

3. A large proportion of the submissions made by both parties at the hearing went to the question of whether the Opponent could claim prior use of the Trade Mark in respect of the services the Applicant was now claiming. If the services demonstrated in the Opponent’s evidence fit into the description ‘private equity’, then the Opponent would establish the ground of opposition under section 58 of the Act.

4. It will therefore be useful to determine exactly what is meant by the term ‘private equity’ before proceeding further. 

5. Ms Ryan provided definitions from the Macquarie Dictionary (5^th edition) for the words ‘private’, ‘private equity firm’ and ‘equity’ as follows:

   Private:  not of an official or public character; … (of a company) having the right to transfer its shares restricted, the number of its members limited to 50, and prohibited from using public subscription for its shares or debentures.

   Private equity firm:  a shareholding company which is not listed on the stock exchange.

   Equity:  a.  the interest of a shareholder of common stock in a company. 

   (b)  Those funds of a company which are raised by borrowing from the proprietors and external sources

6. She also provided an extract from a Reserve Bank of Australia Bulletin dated June 2002 which gives the following definition of ‘private equity’:

   Private equity, also known as venture capital, is investment outside of public capital markets.  While private equity can be raised from a variety of sources, such as friends, family members and business angels, the more visible (and measurable) avenue is the private equity market where funds are channelled to businesses – typically in new or fast-growing unlisted companies, or companies in financial difficulty with potential for restructuring – by fund managers. (Emphasis added)

7. Ms Davies provided the following definition from an on-line dictionary ‘investopedia’[6]:

   Private equity:  equity capital that is not quoted on a public exchange.  Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.  Capital for private equity is raised from retail and institutional investors, and can be used to fund new technologies, expand working capital within an owned company, make acquisitions, or to strengthen a balance sheet.

   [6] >

   I have discovered a further detailed explanation of the term, again from an Internet site:[7]

   Private equity is the provision of equity capital by financial investors – over the medium or long term – to non-quoted companies with high growth potential.

   Venture capital is, strictly speaking, a subset of private equity and refers to equity investments made for the launch, early development, or expansion of a business. It has a particular emphasis on entrepreneurial undertakings rather than on mature businesses.

   Private equity covers not only the financing required to create a business, but also includes financing in the subsequent development stages of its life cycle. When financing is required by a management team to buy an existing company from its current stakeholders, such a transaction is called a buyout.

   Private equity and venture capital may refer to different stages of the investment but the essential definition remains the same: it is the provision of capital, after a process of negotiation between the investment fund manager and the entrepreneur, with the aim of developing the business and creating value. For the sake of simplicity, from this point onwards, the term private equity will be used to cover both venture capital and buyout.

   Private equity firms have a main goal: seek out companies with the potential for growth and with the aim to put in place the capital, talent and strategy needed to permanently strengthen the company and raise its value.

   Private equity is often categorised under the umbrella of “alternative investments”, complementary to the stock and bond portfolios traditionally used by investors.

   [7] >

   These definitions do two things – they clarify exactly what is involved in the term ‘private equity’, and they make it clear that the term can refer to a service.  I am satisfied that the term as it appears in the Applicant’s specification clearly refers to a service and not to a physical good.

8. Ms Ryan submitted that the Opponent could be regarded as a ‘business angel’[8] and that the evidence clearly shows that his business involves private equity services and advice surrounding those services.  Parncutt 1 (at paragraph 4) describes the opponent’s services as follows:

   My company has provided a range of financial and investment services since November 1999.  These services include:

   ·    Investment services.  This activity includes relationships with a number of stockbrokers and other intermediaries, and the managements of publicly listed companies.  In all cases these business dealings are conducted (including by letter or over the phone, or by email) under the trade mark LION CAPITAL.

   ·    Corporate financial advisory services including those relating to smaller listed companies and private companies.  Typical services include merger and acquisition advice often provided to private companies involved in being sold to or merged with larger listed public companies;

   ·    Advice has also been provided from time to time to listed public companies, often where Lion Capital has formed a relationship as an active investor.  This advice was provided under the trade mark LION CAPITAL.  

   [8] The term ‘business angel’ is defined at as referring to ‘wealthy, entrepreneurial individuals who provide capital in return for a proportion of the company equity.  They take a high personal risk in the expectation of owning part of a growing and successful business’.

9. Ms Ryan submitted that while the evidence was prepared in respect of the full range of financial services originally claimed by the applicant, it clearly refers to private equity as well.  In respect of this submission, Ms Ryan referred to Exhibit BP-3 to Parncutt 1.  This Exhibit consists of copies of letters (heavily redacted) from Lion Capital Pty Ltd to various clients which Ms Ryan submitted clearly demonstrated that the Opponent was providing private equity services.  Certainly, the wording of some of the letters does appear to refer to the Opponent’s provision of finance and/or advice about securing finance for businesses through the private market rather than the public market such as banks and via the ASX. 

10. In her submissions Ms Davies disputed these claims, and took me to the same paragraph of Parncutt 1 and to the same Exhibits which she saw in a completely different light.  She submitted that none of the services the Opponent offered fit the description of ‘private equity’ and could be, at best, regarded as the provision of advice to other parties on the securing of private equity funds from various sources.  Ms Davies submitted that the services the Opponent offered clearly did not fall within the ambit of those claimed by the Applicant.

11. Both Applicant and Opponent referred me to Colorado Group Ltd v Strandbags Group [2007] FCAFC 184 (‘Colorado’) which they said was the leading case for determining  whether goods (and by analogy services) can be regarded as ‘the same kind of thing’.

12. Ms Ryan submitted:

    Whilst the test for goods or services of the same kind of thing is narrower than that for similar goods or services, there is some latitude.  Kenny J in [Colorado at paragraph 6] observed:

    Ownership by first use is therefore ownership (or proprietorship) in relation to the goods or classes of goods on which the mark has first been used.  The right to registration in this circumstance is not limited to the identical goods or classes of goods but extends to goods or classes of goods “of the same kind”:  See Jackson & Co v Napper;[9] In Re Schmidt’s Trade Mark (1886) 35 ChD 162 at 178 and ReHicks’ Trade Mark (1897) 22 VLR 636 at 640; 3 ALR 75 at 76.

    [9] (1886) 35 Ch D 160

13. Ms Davies submitted:

    Pursuant to the Full Court decision in the Colorado case, it is clear that the mere fact that services have some similar characteristics or overlap in some way is not enough to render them the same kind of thing.  Therefore, the fact that there is some sort of investment or advisory aspect to private equity services does not render private equity services as essentially the same as the services provided by [the Opponent] (just as the fact that backpacks and handbags are each a form of bag does not render them the same kind of thing).

14. The Opponent has specified that he provides, amongst other services, investment services.  His business is described in Exhibit OSK-1 to Kwok 2 as ‘a boutique investment house’.  This description is said to come from one of the Opponent’s own staff members and is also mentioned in a letter from Mr Parncutt himself dated in 2005 which forms part of Exhibit BP-3 to Parncutt 1.  The definitions of ‘private equity’ which have been quoted previously all agree that the term refers to a form of investment activity.  That being the case, the following comments from Colorado (at paragraph 14) are apposite:

    Authoritative discussions show that this extension to goods of the same kind is confined to goods that are essentially the same, though they may differ in size, shape and name. This point is emphasised in Jackson v Napper where Stirling J gave some attention to this question in considering the difference between an axe and a hatchet. He said (at 177-178):

    [The Respondents] said there was a little difference in the size, as I understand, and a little difference in the shape; but can it be, that a man having made goods of a particular size, which might be designated as small axes – which in fact is the definition given in Johnson’s Dictionary of a hatchet – is to be precluded from putting his mark upon things of the same description or belonging to the same class of goods, but of a different size and a different shape? The objection of course is founded on Edwards v Dennis [30 Ch D 454], in which it was held that a man having registered a mark for iron goods and having manufactured, I think, sheet-iron, and applied his mark to that, was not entitled to stop another man from using the same mark in respect of iron wire which he had never used at all. That to my mind is a totally different thing from saying that a man who has used a mark on hatchets of a particular size and shape is not entitled to use a trade-mark as applied to an axe, which is a thing of the same kind but a little different in size and a little different in shape. No doubt at first the classes of goods under the Trade Marks Act were drawn too wide, and that has led to difficulty, but if I were to accede to this notion and say that because a man had merely manufactured small axes, he was not to be allowed to register in respect of axes, the logical consequence would be that he would have to register the shapes and sizes of everything to which he attached his mark. That was an inconvenience that was never intended to be imposed on an applicant, and I hold that a man who has manufactured and applied his mark to small axes is entitled to register it in respect of axes generally.

1. I consider that the Opponent has demonstrated use of the Trade Mark in respect of investment services including advice to third parties about investment.  The broad term ‘investment services’ incorporates that group of investment services which can be described by the term ‘private equity services’.  On the basis of the evidentiary examples before me I am satisfied that the Opponent has used LION CAPITAL as a trade mark in respect of the same kind of service as that which is currently claimed by the Applicant.

Section 58

1. Section 58 of the Act provides:

   58Applicant not owner of trade mark

   The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.

   Note:For applicant see section 6.

2. In order to make out a ground of opposition under section 58, the Opponent must establish that:

   ·   the respective trade marks of the Applicant and Opponent are either identical or substantially identical [10],

   ·   the respective services of both parties are the ‘same kind of thing’ [11]

   ·   the Opponent has the earlier claim to ownership based on authorship[12] and use of its trade mark prior to both the filing of the Application and any actual use of the Opposed Trade Mark by the Applicant[13].

   [10] Carnival Cruise Lines Inc. v Sitmar Cruises Ltd (1994) 120 ALR 495; 31 IPR 375

   [11] Re Hicks’ Trade Mark (1897) 22 VLR 636, 3 ALR 75

   [12] Authorship in that sense involves the origination or first adoption of the word as and for a trade mark Aston v Harlee Manufacturing Company [1960] HCA 47; (1960) 103 CLR 391 at 399

   [13] Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd 10 IPR 402 at 413

3. The Opponent has demonstrated use as a trade mark of the words LION CAPITAL, that is, use of the Trade Mark in respect of the services he provides. He has declared that he has used the Trade Mark since as early as 1999[14] and has provided dated examples of relevant correspondence demonstrating use of the Trade Mark for the relevant services from at least 2001.[15] I have determined that the services for which the Opponent has demonstrated use of the Trade Mark are the same kind of thing as the private equity services which now form the whole of the Applicant’s claim. Therefore, the Opponent has established the ground of opposition under the provisions of section 58 of the Act.

   [14] Parncutt 1, paragraph 4.

   [15] Exhibit BP-3 to Parncutt 1.

The late divisional claim

1. There is another matter which I consider requires a comment.  Ms Ryan for the opponent strongly submitted that since the Applicant had amended its services a mere few days prior to the actual hearing, that it would be appropriate for me to decide this matter on the basis of the full range for services originally claimed in the application.  Ms Davies, not unexpectedly, did not agree that this was appropriate.

2. I consider Ms Davies has the right of it. There is no bar against a party to an opposition amending its application during opposition proceedings even if this does inconvenience the other side. However, once the goods or service specification of an application has been amended to delete some items, any further actions in respect of the application must proceed only in respect of the retained items. In this case, given that this is the second time the Applicant has chosen to amend its service specifications by way of filing a divisional application very close to a hearing or issue of a decision on the written record, it appears to me that, in order to ensure that the Trade Mark remains on the Register and keeps its original priority date, the Applicant is choosing services which it is prepared to sacrifice in case it is unsuccessful in the opposition. This practice may cause inconvenience to the Opponent and could be regarded as a questionable practice, however there is no specific bar against it in either the Act or the Regulations.

Decision

1. As the Opponent has established a ground of opposition, it succeeds in this opposition.  I refuse to register trade mark application 1414641.

Costs

1. The Opponent requested its costs in the event of its success in this action.  I award costs against the Applicant according to the Official Scale.

Alison Windsor
Hearing Officer
Trade Marks Hearings
2 August 2013

If:  (a) after a person has filed a notice of opposition, the right or interest on which the person relied to file the notice of opposition becomes vested in another person; and 
(b) the other person: 

(i) notifies the Registrar in writing that the right or interest is vested in him or her; and       

(ii) does not withdraw the opposition; the opposition is to proceed as if the notice of opposition had been filed in that other person’s name.