Cantarella Bros Pty Ltd v Espresso Enterprises Pty Ltd

[2014] ATMO 68

TRADE MARKS ACT 1995

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

Re:Oppositions by Cantarella Bros Pty Ltd to registration of Australian trade mark applications 1483189 - Di Bella Coffee … we know coffee - and 1483193 - Crop to Cup … we know coffee - in Classes 30, 40 and 43 in the name of Espresso Enterprises Pty Ltd

Delegate:	Hearing Officer: Michael Kirov
Representation:	Opponent: Michael Green of Counsel, instructed by Lauren Eade of Gilbert+Tobin Lawyers Applicant: Alexander Kuklik of Counsel, instructed by Sam Marsh of Drummond Litigation
Decision:	2014 ATMO 68 s 52 oppositions: Ground under s 62A considered – applications made in bad faith - oppositions successful.

Background

1. These are oppositions brought by Cantarella Bros Pty Ltd (“the Opponent”) pursuant to s 52 of the Trade Marks Act 1995 (“the Act”) to registration of the trade marks (“the Opposed Marks”) subject of the applications detailed below in the name of Espresso Enterprises Pty Ltd (“the Applicant”):

Application Number:             1483189

Priority Date:    29 March 2012

Goods and Services:               Class 30: Aerated beverages (with coffee, cocoa or chocolate base); aerated drinks (with coffee, cocoa or chocolate base); beverages consisting principally of coffee; beverages made from coffee; beverages with coffee base; chocolate coffee; coffee; coffee beans; coffee beverages; coffee beverages with milk; coffee concentrates; coffee drinks; coffee essences; coffee extracts; coffee flavourings (flavourings); coffee mixtures; coffee oils; coffee products; coffee-based beverages; decaffeinated coffee; extracts of coffee for use as flavours in beverages; extracts of coffee for use as flavours in foodstuffs; flavoured coffee; ground coffee; ice beverages with a coffee base; iced coffee (coffee based beverages); mixtures of coffee; mixtures of coffee essences and coffee extracts; preparations for making beverages (coffee based); preparations with a coffee and tea base; unroasted coffee

Class 40: Coffee roasting

Class 43: Coffee bar and coffee house services (provision of food and drink); coffee shop services

Trade Mark:  Di Bella Coffee … we know coffee   (“the Di Bella Mark”)

Endorsement:    Provisions of paragraph 44(3)(b) and/or Reg   4.15A(3)(b) applied.[1]

Application Number:             1483193

Priority Date:    29 March 2012

Goods and Services:               Class 30: Same as application 1483189, with the addition of “instant coffee”

Class 40: Coffee grinding; coffee roasting

Class 43: Same as application 1483189

Trade Mark:  Crop to Cup … we know coffee  (“the Crop Mark”)

[1] Application 1483189 relied upon a letter of consent from an apparently related company to invoke s 44(3)(b) and overcome the citation of that company’s registration 1197911 CBD COFFEE BY DI BELLA & Device.

1. The Opponent filed Notices of Opposition (“the Notices”) to applications 1483189 and 1483193 (“the Applications”) on 10 April 2013 and 19 October 2012 respectively.

2. As evidence, the parties rely on the following Statutory Declarations or Declarations:[2]

Evidence in Support

▪ Daniel Benjamin Abrahams made 17 April 2013, with Exhibits DBA-1 to DBA-28 (“Abrahams”)

Evidence in Answer

▪ Michael Paton Drummond made 5 August 2013, with Exhibits MPD-1 to MPD-4 (“Drummond”)

[2] Eade was made pursuant to the Act; Abrahams and Drummond were made pursuant to the Statutory Declarations Act 1959 (Cth).

Evidence in Reply

▪ Lauren Eade made 27 November 2013, with Exhibits LFE-1 to LFE-9 (“Eade”)

1. As the evidence shows, it is the presence of the tagline common to the Opposed Marks, the words “we know coffee” (“the Tagline”), which the Opponent finds objectionable and which is at the core of the particular opposition grounds pursued.  Both parties acknowledge that the Tagline lacks a great deal of inherent distinctiveness in the context of the relevant goods and services and the Applicant’s position, (notwithstanding having filed the Applications), is that any trader in such goods or services should be able freely to use it in good faith for legitimate descriptive purposes.  The Opponent had nevertheless used the Tagline prominently in its advertising for around two years before the priority date of the Applications in relation to its market-leading VITTORIA branded coffee, something the Applicant acknowledges it was aware of, and the Opponent claims rights in it as a trade mark for its particular coffee products.  In this regard industry data exhibited with Abrahams indicates VITTORIA branded coffee to be “the highest selling pure coffee brand in the Australian supermarket channel, based on dollar value, units and volume of coffee sold”, with it being distributed “to over 5,000 foodservice customers (including independent grocers, delicatessens, cafes and restaurants), and to over 2,000 supermarket stores including Woolworths, Coles, Aldi and Costco.”  As the Opponent’s Counsel, Michael Green, explains in his submissions:

   (a)the mark WE KNOW COFFEE was used extensively by the Opponent prior to the date of filing of the Applications, and has been used continuously by the Opponent since the Opponent’s first use of the mark.  The Opponent therefore enjoys a reputation in the WE KNOW COFFEE mark.  In view of that reputation, use of the [Opposed Marks] would be likely to mislead or deceive or be contrary to law;

   (b)the Applicant made the Applications in bad faith.

2. I will refer further as necessary to the parties’ evidence in the discussion of the Opponent’s specific opposition grounds that follows, but at this stage note the matters set out below forming the background to the present dispute.

3. Daniel Abrahams, the Opponent’s General Manager – Sales & Marketing and in-house Legal Counsel, describes the Opponent, which was founded in 1947, as “one of the oldest continuously trading family-owned companies in the food and beverage industry in Australia.”  He says that in 1958 the Opponent “began selling pure coffee[3] under the trade mark VITTORIA to cafes, restaurants and delicatessens” and has done so continuously since then, expanding into the grocery market in the 1980s.  An early pioneer in this field in Australia, the Opponent “now promotes and sells coffee product under the additional brands of AURORA, CHICCO D’ORO, CINQUE STELLE and ORO” and was (as at 10 March 2013, according to annexed industry data) “the largest manufacturer of pure coffee in the supermarket industry in Australia, in sales, units and volume.”

   [3] I understand this term to include roasted coffee beans and roasted coffee, (otherwise described in the Opponent’s evidence as “roast, ground or pulverised coffee”), as opposed to instant coffee.

4. As to the Applicant, its Director of Corporate Services and in-house legal Counsel, Michael Drummond, explains:

   5. The Applicant was founded in 2002 by Mr Phillip Di Bella, trading under the business name Di Bella Coffee.  Starting up as a coffee roaster, Di Bella Coffee has since evolved into a fully integrated specialty coffee company. … [A related company] sources, purchases and imports green coffee beans directly from coffee farmers around the world to Di Bella Coffee.

   6. Since…2009, the Applicant has handled every stage of coffee from Crop to Cup:[4] sourcing and purchasing green beans; blending, roasting, packaging and distributing to customers across the country and overseas, as well as providing services such as business development, technical support and training for cafes.  Being a 100% vertically integrated company is a fundamental aspect of the Applicant’s business.  The Applicant also operates either solely or in partnership with third parties, an online store and a number of cafes and mobile café businesses which deliver coffee products directly to consumers.

   [4] Despite their capitalisation, I understand the words “crop to cup” are being used purely descriptively in this context.

5. Only the Opponent has provided figures for its annual turnover (on a confidential basis), although both parties provide estimates of the number, in millions, of “cups of coffee” each sells in Australia daily or weekly.  It is apparent that the parties are both significant players in this regard (albeit that the Opponent is, on the figures, a much larger enterprise) and, as Mr Abrahams frankly puts it, “The Applicant is a competitor of the Opponent.”  Indeed, Mr Abrahams suggests that there may have been ill feeling between the parties in the period leading up to the filing of the Applications, stating:

   In February 2012, the Applicant made certain allegations to the Australian Competition and Consumer Commission (“ACCC”) against the Opponent regarding the Opponent’s sales practices and dealings with customers.  These allegations were subsequently reported in the media.

   The Opponent strongly denied the Applicant’s allegations in correspondence to the Applicant and the ACCC.  The ACCC subsequently advised that there was insufficient evidence to support the Applicant’s allegations, and that the ACCC did not intend to pursue the matter further.

6. News articles published on 21 February 2012 on the websites < and <skynews.com.au>, in the Herald Sun newspaper and elsewhere, which apparently first reported these ACCC allegations, are exhibited with Abrahams.  I note these refer to the Applicant and the Opponent as “a boutique coffee supplier” and a “coffee giant” respectively and that Phillip Di Bella, the Applicant’s founder and owner, is quoted as describing the Opponent’s alleged behavior as a “classic example of a hugely resourced company trying to stamp out competition.”  An exhibited Australian Associated Press article describes the Opponent’s response being that the accusations were “false and a grab for publicity by Di Bella,” quoting an executive of the Opponent as saying, “This is another attempt by Di Bella Coffee to gain media exposure against the high profile brand Vittoria Coffee.”

7. With that as background, I heard the present matter as a delegate of the Registrar of Trade Marks on 16 June 2014 in Sydney.  Michael Green of Counsel, instructed by Lauren Eade of Gilbert+Tobin Lawyers, appeared for the Opponent.  The Opponent’s attorneys also provided copies of written submissions to me and to the Applicant’s attorneys on 2 June in accordance with my directions.  The Applicant was represented by Alexander Kuklik of Counsel, instructed by Sam Marsh of Drummond Litigation.  The Applicant’s attorneys also provided copies of written submissions to me and to the Opponent’s attorneys on 12 June.

Grounds of Opposition

1. The Notices, which are essentially identical, list a large number of grounds corresponding to various provisions of the Act but at the hearing the Opponent pursued only those grounds based on ss 42(b), 58, 60 and 62A of the Act. I treat the remaining grounds listed in the Notices as abandoned. As will become apparent, I have only found it necessary to address the Opponent’s s 62A ground in this decision and it is discussed below. Of course should the decision be appealed, it would always remain open to the Opponent to plead any ground it considered relevant in proceedings before the Court.

Onus and Standard of Proof

1. To succeed, the Opponent bears the onus of establishing one or more of the grounds of opposition it pressed at the hearing.  I confirm I am proceeding on the basis that the relevant standard of proof required of the Opponent is the ordinary civil standard based on the balance of probabilities.[5]

   [5] Following Gyles J in Pfizer Products Inc v Karam (2006) 70 IPR 599 at [6] to [26].

2. The relevant date at which the rights of the parties are to be determined is the 29 March 2012 filing date of the Applications (“the Priority Date”). [6]

Discussion

[6] Per Kitto J in Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595.

Section 62A

1. The ground based on s 62A is indicated in the Notice as follows:

   (s 62A) The Application was made in bad faith.

2. Section 62A itself is reproduced below:

Application made in bad faith

The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

1. The Opponent’s allegation is that the Applicant’s incorporation of the Tagline in the Opposed Marks was done not only in the knowledge that the Opponent had already been using it in its advertising for some time previously, but as part of a wider effort to leverage off the Applicant’s very advertising campaign itself.  Evidence for this, says the Opponent, can be seen in the fact that at around the Priority Date the Applicant also started running its own very similar electronic and print media advertising which referenced the Opponent’s advertising in several other obvious respects in addition to use of the Tagline.  In his submissions for the Opponent on this point Mr Green concludes:

   The absence of any evidence by the Applicant explaining how it came to choose to use the [Tagline] allows the conclusions to be safely drawn for which the Opponent contends.

   Further, from the Applicant’s existing attempted use of the [Tagline], it is clear that [the] Applicant intends to do so, not so much to advertise products, but to seek to interfere with the Opponent’s legitimate use of its intellectual property.  That is, there is no bona fide intention to rely upon the proposed marks as a badge of origin.  Rather it seeks to dilute the effect of the extensive use by the Opponent of its legitimate trade marks.

2. As to the Opponent’s prior adoption and use of the Tagline, Mr Abrahams describes this in paragraphs 19 to 34 of his declaration.  Mr Abrahams’ evidence is significant in particular in that Mr Drummond confirms in his declaration in answer that, “…the Applicant acknowledges the Opponent’s use of the [Tagline] as detailed in paragraphs 19 to 34 of the Opponent’s evidence.”  The evidence in question is that:

   19. In or around March 2010, the Opponent entered into a Featured Talent Services Agreement with Mr Al Pacino.  Under this agreement, Mr Pacino agreed to feature in a promotional campaign devised by the Opponent for the VITTORIA brand (the Pacino Campaign).

   20. In or around August 2010, and continuing until today [17 April 2013], the Opponent has run the Pacino Campaign, which has included print and television advertisements.  In particular, the Pacino Campaign has included four (4) television commercials (the Pacino Advertisements).  [Copies on CD annexed as DBA-3]

   21. In one of the Pacino Advertisements at DBA-3, entitled “Two Things”, Mr Pacino says the words “If you just take expert out of the equation…I know coffee”.  As a result of the words expressed by Mr Al Pacino in that advertisement, combined with the Opponent’s long established presence within the Australian pure coffee market, and the market leader status of VITTORIA, as described below in this declaration, the Opponent commenced use of the mark [that is, the Tagline].

   22. To the best of my knowledge, at the time the Opponent commenced using [the Tagline], no other coffee company in Australia used [it].

   23. The Opponent first used the [Tagline] in respect of coffee beans and ground product in or around August 2010.

   24. The Opponent has used the [Tagline] extensively in advertising and promotion for its coffee products, including (a) In newspapers and magazines; (b) On television; (c) On radio; (d) On the Internet; and (e) On signage materials.

   [At paragraphs 25 to 31 Mr Abrahams then details some of the Opponent’s specific advertising and promotional activities mentioned in paragraph 24, annexing, inter alia, copies of print advertising placed in a wide range of magazines and newspapers between 9 August 2010 and the Priority Date and which feature the Tagline very prominently.  Images of signage material prominently featuring the Tagine and supplied by the Opponent to a number of its café and restaurant customers across Australia during this period are also exhibited.  A typical example of the essential image used in the Pacino Campaign which illustrates the prominent manner in which the Opponent has invariably used the Tagline since August 2010 is shown below.]

32. In or around August 2010, the Opponent mailed a poster featuring the [Tagline] to approximately 1,800 of its foodservice customers.  [Pictures of various cafes and restaurants displaying the poster, which is essentially identical to the image shown above, are annexed.]

33. The Opponent and its VITTORIA brand was an official sponsor of the Good Food Guide Awards in Sydney and in Melbourne, in both 2011 and 2012.  As part of the sponsorship, the Opponent was entitled to display signage items at the Good Food Guide Awards event.  [Pictures of lightboxes and other signage, featuring images essentially identical to the image shown above, are annexed.]

34. Annexed and marked Confidential Exhibit DBA-11 is a table setting out the Opponent’s total advertising expenditure in relation to the [Tagline] for each financial year commencing July 2010.

1. In summary, then, the Opponent had been using the Tagline since August 2010 and had used it widely in its electronic, print and related advertising for its VITTORIA branded coffee at the time the Applications were filed on 29 March 2012.  I note that the Opponent’s confidential advertising figures support this.  Moreover, the Applicant “acknowledges” this.  Nevertheless, as Mr Drummond explains in his declaration, the Applicant does not accept that the Opponent could claim any proprietary rights in the Tagline as at the Priority Date:

   9. “We know coffee” is a generic phrase that alone is not capable of distinguishing the goods or services of one company from another company within the industry.  Rather this phrase seeks to describe a person’s level of knowledge about the coffee product.  It, of itself, does not communicate how such alleged knowledge has been acquired (if at all) nor what aspects of the coffee industry this knowledge purports to relate to.

   10. Case in point, while the Applicant acknowledges the Opponent’s use of the [Tagline] as detailed in paragraphs 19 to 34 of [Abrahams], the Opponent’s association with this phrase is only historically linked to the perception that a person who drinks a lot of coffee (in this case the paid actor Al Pacino) must have acquired some unquantifiable and unspecified knowledge about coffee.  However, at best, this assumed knowledge can only be in relation to the taste of coffee.  The Opponent’s marketing campaign based around this generic phrase cannot and does not communicate any quantifiable knowledge about coffee as a product, a business or as an industry.  This is consistent with the fact that the Opponent’s business (as deposed by Mr Abrahams) as [sic] one of a general importer and wholesaler (coffee being only one of the products which it sells).

   11. [The Tagline] is an unquantifiable statement that is widely used within the coffee industry.  Companies operating within the coffee industry and providing coffee related products and/or services to their customers are assumed and expected to know coffee or at least some aspects of coffee (be it cultivation, importation, manufacture, distribution and/or sale).  Annexed and marked Exhibit MPD-3 are screenshots from other coffee companies who have used the [Tagline] on their websites.

   12. In my view, it is the generic nature of the [Tagline] which may have resulted in any perceived commonalities between the Applicant and the Opponent’s advertising as outlined in paragraphs 42 to 54 of [Abrahams].

   13. However, the [Tagline], when coupled with the distinctive “Crop to Cup” mark is capable of distinguishing the Applicant’s goods and services from others in the industry as it describes how and why the Applicant has gained its knowledge as well as what this knowledge relates to.[7]

   [7] Mr Drummond is obviously only referring to the Crop Mark here, but would presumably claim the same thing for the Di Bella Mark, where the Tagline is added to the words “Di Bella Coffee”.

2. I note Mr Drummond acknowledges above the “perceived commonalities between the Applicant and the Opponent’s advertising as outlined in paragraphs 42 to 54 of [Abrahams],” albeit that he puts this down to “the generic nature of the [Tagline].”  In the paragraphs in question Mr Abrahams details some of the Applicant’s activities around and following the Priority Date which, he says, reference the Opponent’s advertising.  Since the matters raised are at the heart of the Opponent’s case and are not challenged by the Applicant per se, it is convenient to set them out below:

   42. On or about 1 March 2012, the Opponent became aware that the Applicant had commenced using the [Tagline] on the [Applicant’s] “My Di Bella Coffee” and “Di Bella” Facebook pages.  Annexed and marked Exhibit DBA-16 are screenshots of [these pages], showing posts from January 2012 to 11 April 2012 and with the relevant posts highlighted.

   [These posts by the owner of the relevant Facebook pages commence on 1 March 2012 with “Who knows coffee…….WE know coffee!!!”  I note that in all the posts only the words “We know coffee” followed by an ellipsis are used, rather than either of the Opposed Marks per se,[8] as shown in the post below from 19 March 2012]:

   [8] It is possible, I imagine, that the Applicant may consider the 19 March 2012 and 30 March 2012 Facebook posts reproduced here to be a fair use of the Di Bella Mark as applied for.  For the record, I do not.

43. On 30 March 2012, the Applicant posted a comment on [these Facebook pages], referring to Mr Al Pacino, as shown [on annexed screenshots, with the post “Do you like Pacino in coffee advertisements?  Stay tuned to Chanel [sic] 9 starts tomorrow….”].

44. On 30 March 2012, the Applicant posted an image on its “Di Bella Coffee” Facebook page, featuring the [Tagline], as shown [below]:

45. On 30 March 2012, Mr Phillip Di Bella posted a comment on his own Facebook page, referring to Mr Al Pacino.  [A screenshot is annexed showing Mr Bella’s comment, “Do you like Pacino in coffee advertisements?? Stay tuned to Chanel [sic] 9 starts tomorrow….”]

46. On 31 March 2012 I saw a television commercial of the Applicant that aired on the Channel 9 television’s “Today Show”.  [copy annexed on CD as part of DBA-20.]

47. On 31 March 2012, the Applicant posted a YouTube link of a television advertisement on the “Di Bella Coffee” and “My Di Bella Coffee” Facebook pages.  [Screenshots of the Facebook pages (showing the post “Have you seen our TV Commercial?  It’s not good Coffee….it’s GREAT Coffee!  and a CD with a copy of the YouTube advertisement are annexed as part of DBA-20.]

48. On 5 April 2012, the Applicant posted a YouTube link to one of the Opponent’s Pacino Advertisements on its “Di Bella Coffee” Facebook page, as shown [in an Exhibit].  On the same day, the Applicant posted a YouTube link to the Applicant’s television advertisement [copy annexed on CD], and commented with words to the effect, “What’s the difference for you?” as shown [in an Exhibit].

49. In my view, the Opponent’s Pacino Advertisements…have predominant features, including:

(a) Use of an interview style, with close-up shots of Mr Al Pacino;

(b) A sepia tone style featuring a gold colouring effect;

(c) In one of the Pacino Advertisements, Mr Al Pacino says the words “I know coffee”;

(d) In each of the Pacino Advertisements Mr Al Pacino says the words “This is good coffee”; and

(e) A close-up image of an espresso cup marked with the VITTORIA brand logo, on an espresso machine.

50. In my view, the television advertisements of the Applicant at DBA-20, have features which are similar to, and relate to, the features of the Opponent’s Pacino Advertisements, including:

Use of an interview style, with close-up shots of Mr Phillip Di Bella;

(a) A sepia tone style featuring a gold colouring effect;

(b) Mr Di Bella says the words “I’m not Pacino”;

(c) Mr Di Bella says the words “I know coffee”;

(d) Mr Di Bella says the words “This is not good coffee…this is great coffee”; [and]

51. On or around 23 April 2012, the Applicant posted a cover image on its “Di Bella Coffee” Facebook Page, featuring the [Tagline]:

52. In or around June 2012, an advertisement appeared within the magazine publication, “Café Culture”, promoting the Applicant’s brand, and features the [Tagline]:

53. In my view, the VITTORIA print advertisements featuring the [Tagline] at Exhibit DBA-4[9] have predominant features, including:

(a) Use of black and white image with VITTORIA logo in gold; and

(b) Use of the words “We Know Coffee” in an “Arial” type font.

54. In my view, the Applicant’s advertisements at Exhibit DBA-18, Exhibit DBA-21, and Exhibit DBA-22 have features which are similar to the features of the print advertisements of the Opponent at DBA-4, including:

(a) Use of black and white photographic images with the Applicant’s brand identifier in gold; and

(b) Use of the words “We Know Coffee” in an “Arial” type font.

[9] A representative example of which is shown in paragraph 17 above.

1. For the sake of completeness it is appropriate here to record that the Applicant has not commented on or otherwise challenged the further information Mr Abrahams provides on the same theme:

   55. On or around 21 October 2011 the Applicant applied to register “THIS IS NOT GOOD COFFEE…THIS IS GREAT COFFEE” (Application 1455238) as a trade mark in Class 30.  [ATMOSS details annexed][10]

   56. On 10 April 2012, the Opponent first became aware that the Applicant had applied for the Applications, and of the trade mark application described at paragraph [55] above.

   57. On 10 February 2013, the Applicant posted a video advertisement on its Di Bella Coffee Facebook Page, featuring a person impersonating well-known actor Mr Robert De Niro.  [copies annexed on CD]  In my view, the advertisement uses features which are similar to, and relate to, the Pacino Advertisements, including:

   (a) Use of the likeness of a well-known Italian Hollywood actor;

   (b) Use of an interview style, with close-up shots of the De Niro impersonator;

   (c) A sepia tone style featuring a gold colouring effect;

   (d) The impersonator says the words “I’m not Pacino”;

   (e) The impersonator says the words “I know coffee”;

   (f) The impersonator says the words “This is not good coffee…this is great coffee”; and

   (g) A close-up image of an espresso cup marked with the Applicant’s brand logo, on an espresso machine.

   [10] I note that application 1455238 was subsequently withdrawn by the Applicant on or about 15 May 2013 without a response to IP Australia’s initial adverse report having been lodged.

2. Mr Abrahams concludes his evidence relating to the Opponent’s s 62A ground by expressing his view that:

   62. The Applicant was clearly aware of the Opponent’s use and reputation in the [Tagline] when it adopted the [Opposed Marks], which include the [Tagline].  The Applicant has engaged in advertising and promotional activities using the [Tagline] through television, print and social media which piggybacks onto the Opponent’s Pacino Campaign and Pacino Advertisements, which feature the [Tagline].  As part of this conduct, the Applicant has also improperly sought registration of the Applications.

3. Finally, on an issue that is contested by the Applicant in Drummond, Mr Abrahams highlights the descriptive nature of the words “crop to cup” appearing in the Crop Mark, annexing in support copies of pages from third party websites and elsewhere which have used the words, or used very similar words in relation to coffee.  In response Mr Drummond is critical of some of these supporting materials and claims that the phrase “is solely associated with Di Bella Coffee,” albeit he does also apparently consider that it “describes the Applicant’s business”:

   14. ‘Crop to Cup’ is a unique statement that describes the Applicant’s business as it is involved in all aspects of the coffee business/industry from when the coffee is originally grown to when the coffee reaches the end consumer.

4. I mention in passing that, although both Mr Green and Mr Kuklik addressed the distinctiveness of the phrase in their submissions, I do not think it necessary for me to consider the issue in this decision.[11]  The matter was raised initially by the Opponent to argue that the non-distinctive nature of the words “crop to cup” tended to increase the relative prominence of the Tagline in the Crop Mark as a whole.  Be that as it may, I confirm this issue is not a significant factor in my ultimate decision below.

   [11] To the extent that it were, I think that the same reasoning behind my decision in Sustainable Living Fabrics Pty Ltd v Instyle Contract Textiles Pty Ltd [2011] ATMO 66, being to refuse the essentially analogous trade mark FARM TO FABRIC for services in Class 35 following an opposition based on s 41, would apply.

5. I have already, in effect, recorded most of what is said in Drummond in response to Abrahams, which was essentially to describe the Applicant and its business, to submit that the Tagline was a generic phrase and thus freely available for use and, (although as I have indicated very much a side-issue as I see it), to support the claim that the words “crop to cup” are “solely associated with Di Bella Coffee”.  For some reason Mr Drummond does not remark at all on the Di Bella Mark in his declaration, as is evident from the three concluding paragraphs quoted below.  I take it, nevertheless, that he would consider his relevant observations on the Crop Mark would apply all the more to the Di Bella Mark, given the words “Di Bella Coffee” would undoubtedly be “solely associated with Di Bella Coffee”.  As Mr Green highlighted in his submissions, Mr Drummond does not otherwise seek to explain what actually motivated the Applicant to commence using the Tagline shortly before filing the Applications, nor why it then effectively sought, in filing the Applications themselves, the right to its exclusive use in combination with the name of its business (in the case of the Di Bella Mark) or with what, on the face of it at least, is in essence a descriptive phrase (in the case of the Crop Mark).  (Indeed, notwithstanding the capitalization, Mr Drummond uses the phrase descriptively himself in the first sentence quoted below.)  That said, Mr Drummond concludes his declaration with the following claims:

   16. The trade mark application “Crop to Cup… We Know Coffee” formalizes and describes the Applicant’s expertise in relation to all aspects of coffee, from Crop to Cup.  This mark is distinctive to [sic] the Applicant as it is elaborating on the already distinctive mark, “Crop to Cup.”

   17. The [Crop Mark] in toto distinguishes the Applicant’s products and services from others (including the Opponents) in the industry.

   18. The Applicant’s unique Crop to Cup business model and level of specialised knowledge and expertise in relation to all aspects of coffee critically underpin its business and are descriptors, which the public solely identifies with the Applicant’s products and services.  Accordingly, it will not cause confusion as between the Applicant’s and the Opponent’s businesses.  While the Opponent’s use of the [Tagline] is associated with the level of subjective knowledge a regular drinker of coffee may acquire as to the taste of coffee, the Applicant’s use of the [Crop Mark] is associated with its knowledge, experience and expertise in the coffee industry based on its involvement in all aspects of the coffee industry from start to finish.

6. Before leaving Drummond, it is convenient to discuss its Exhibit MPD-3, which as indicated earlier is described as “screenshots from other coffee companies who have used the [Tagline] on their websites” and is in effect the only supporting evidence for Mr Drummond’s claim that the Tagline “is widely used within the coffee industry.”  Pages from three third party websites form Exhibit MPD-3.  In reply to Drummond the Opponent relies on a declaration by Lauren Eade, the solicitor with day to day carriage of the matter on the Opponent’s behalf.  With over 700 pages of annexed supporting documents, the bulk of Ms Eade’s declaration is aimed at demonstrating that the phrase “crop to cup” is not, as Mr Drummond claims, uniquely used by, and associated with, the Applicant.  This, I might say, she does very comprehensively, although as I have already said the issue itself is not significant as far as my ultimate decision is concerned.  In this regard I agree with Mr Green’s submission that the ellipsis in each of the Opposed Marks effectively divides the marks in half and accordingly focuses attention on the Tagline in at least equal measure as on the elements “Crop to Cup” or “Di Bella Coffee”.  Moreover, as Mr Green highlighted, the examples of the Applicant’s use of the Tagline discussed and/or shown in paragraph 19 above, (indeed, as shown in the evidence generally), tend to show its use quite separately from any other particular element in any event.

7. As to Mr Drummond’s claim that the Tagline is widely used by others, Ms Eade responds:

   In Exhibit MPD-3…Mr Drummond includes print-outs from third party websites which he alleges at paragraph 11 of [his declaration] use the [Tagline].  Mr Drummond has not provided the web addresses at which these alleged uses are to be found nor has he provided details regarding when the alleged uses were downloaded or when the alleged uses commenced.

8. Ms Eade goes on to describe her enquiries into the three websites in question, noting that one is run by a Scottish company which “claims to operate in the UK and Ireland only.”  A second is apparently an American site whose corresponding Australian website does not use the Tagline at all.  She notes in addition that the Opponent is not aware of any actual use of the Tagline in Australia by either of these companies.

9. I would add that the third website included in Exhibit MPD 3 does not take the issue much further, merely containing a single sentence, buried in one particular paragraph, in the copy on the “OUR COLD DRINKS” page of the site in question, albeit the business concerned is a coffee shop chain operating some 70 stores in Australia.

10. Whether or not the Tagline was distinctive of the Opponent’s coffee products as at the Priority Date is however not something that I need to determine here.  Rather, I think, it is enough to accept that the Tagline is not so devoid of capacity to distinguish those products that, if it were used sufficiently by the Opponent in its relevant advertising and promotional activities, it should in principle do so at some point in time.  That a claimed trade mark of low (or, indeed, no) inherent distinctiveness may in fact become distinctive because of its use by one trader over time for relevant goods or services is more or less a fundamental pillar of trade mark law and practice and would presumably have been known to the Applicant and its attorneys when the Applications were filed.

11. Moreover, as foreshadowed above, I do not believe the Applicant has on the evidence established its core claim, that the Tagline “is widely used within the coffee industry”, whether currently or at any other time.  On the other hand, I accept Mr Abraham’s essentially unchallenged evidence as to the Opponent’s considerable and very prominent use of the Tagline in the 19 months or so before the Priority Date (and since) and it is not in contention that the Applicant was very familiar with the Opponent’s relevant advertising by that date.  That is not to say that the Applicant has necessarily done anything unlawful in, as Mr Kuklik himself put it, producing advertisements which:

    …were clearly a satire or parody of the Opponent’s advertisements, and which plainly sought to distinguish the Applicant’s coffee products from those of the Opponent and other coffee manufacturers.

12. However, that is a quite different question from what I need to consider for the purposes of s 62A. In this regard I agree with Mr Green’s submissions regarding the current state of judicial consideration of the scope of s 62A generally and it is accordingly convenient to set these out in full:

    There have been two Federal Court decisions that substantively consider the section: Fry Consulting v Sports Warehouse Inc (No 2)[12] (Dodds-Streeton J) [“Fry Consulting”] and DC Comics v Cheqout Pty Ltd[13] (Bennett J) [“DC Comics”].

    [12] (2012) 94 IPR 551.

    [13] (2013) 101 IPR 334.

    The following propositions emerge from each of these two decisions relevant to the present oppositions:

    (a)Bad faith for the purposes of s 62A must be [as at the Priority Date] and must relate to the making of the subject of each of the applications: Fry Consulting at [145].

    (b)Section 62A does not require the opponent to establish that the trade mark’s use would result in deception or confusion. However, evidence to that effect may be persuasive in considering whether the application to register a mark was in bad faith: DC Comics at [76].

    (c)The onus of proving bad faith rests upon the opponent: Fry Consulting at [145].

    (d)All of the circumstances surrounding the application to register the mark are relevant: DC Comics at [62].

    (e)The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading: DC Comics at [62].

    (f)While the seriousness of an allegation of bad faith that “impugns the character of an individual or collective character of a business” requires correspondingly cogent evidence, the standard of proof is the balance of probabilities, rather than that of beyond reasonable doubt: Fry Consulting at [145].

    (g)Conduct which falls “short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area” is sufficient.  Dishonesty is not required.  Bad faith requires both subjective and objective elements; it is a combined test: Fry Consulting, at [147] and [148] [and [165]].

    (h)Circumstances where, following prolonged competition between the parties, there is a subsequent application to register a series of nearly identical trade marks can amount to conduct such that a reasonable person standing in the shoes of the applicant would have been aware that it ought not apply for trade mark registration: Fry Consulting at [152].

    (i)Subjective naivety does not exclude a determination of bad faith for the purposes of s 62A: Fry Consulting at [154]-[155].

    (j)A prior business connection with and knowledge of the opponent by the applicant such that a person standing in the shoes of the applicant should have known that he should not have applied for a trade mark deceptively similar to that used by the opponent is sufficient for a finding of bad faith: Fry Consulting at [156].

    (k)An act of bad faith cannot be cured by an action after the date of the application: DC Comics at [62].

    (l)Use of a trade mark together with other indicia associated with the trade mark owner may lead to an inference of bad faith: DC Comics at [73].

13. While noting that, post the DC Comics decision, it is now clear there need not be any pre-existing relationship between the parties as such for an opponent to succeed under s 62A,[14] Mr Green submitted:

    The Applicant and the Opponent had a lengthy relationship in the sense that the Applicant has, prior to the priority date sought to bring complaints against the Opponent and sought to besmirch or otherwise capture the goodwill enuring to the Opponent.  The Applicant’s advertisements have key features which replicate key indicia of the Opponent’s own advertising.

    [14] Although a relevant pre-existing relationship may nonetheless be sufficient in itself to invoke s 62A (Fry Consulting at [156]).

14. In response Mr Kuklik’s submissions on the s 62A issue were somewhat misdirected, in that they did not take into account (or mention) Bennett J’s decision in DC Comics.  In this regard they were mainly focused on noting that in Fry Consulting and earlier registry decisions dealing with s 62A “the applicant or its controller had a prior business dealing, such as a licence or partnership, which implicitly recognized the opponent’s rights to the contested mark or rendered inappropriate the use of that mark”, whereas “here there is no such recognition.” As mentioned, the decision in DC Comics now makes it clear no prior relationship between the parties is required.

15. He also submitted that, “…given the seriousness of these allegations, pursuant to the standard applied in Briginshaw v Briginshaw[15] substantially cogent evidence is required for the tribunal to be reasonably satisfied that this ground is made out.” I think this overstates the position somewhat in this case and I confirm any decision I might make pursuant to s 62A would be on the balance of probabilities based on the evidence before me, rather than requiring satisfaction beyond reasonable doubt. Moreover the consequence of a finding adverse to the Applicant under s 62A would merely be that its bid to seek registration of the Opposed Marks failed. The allegation is not in any event that the Applicant has engaged in some kind of illegal or shameful behavior. As Bennett J confirmed in DC Comics at [62]:

    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.

    [15] (1938) 60 CLR 336.

1. Mr Kuklik otherwise emphasised in his submissions on s 62A that, “…for the reasons previously discussed, it has always been the Applicant’s position that [the Tagline] by itself is not a trade mark that the Opponent can claim exclusive use of.” As already mentioned, however, whether or not the Opponent could so claim as at the Priority Date is not determinative of the s 62A issue. I believe the relevant question in this instance is whether the Tagline is such, and the efforts of the Opponent in prominently featuring it in its advertising for a considerable period (both before and after the Priority Date) is such, that the Opponent might well at some stage reasonably claim a significant number of Australian consumers had come to associate the Tagline with its products. It is self-evident, in my view, that the Opponent might well reach that point some day (if it has not already done so) based on the evidence before me. More relevantly still, as at the Priority Date I would have thought the then, very real, prospect of this happening might have dissuaded many other traders from taking the apparently provocative decision to file the Applications.

2. The final matter Mr Kuklik raised in connection with the s 62A ground was, as already mentioned in passing, that at worst “the Applicant’s advertisements were clearly a satire or parody of the Opponent’s advertisements, and which plainly sought to distinguish the Applicant’s coffee products from those of the Opponent and other coffee manufacturers.” However, as DC Comics confirms, s 62A does not require an opponent to establish that consumer confusion or deception, as contemplated by ss 43 or 60 of the Act, is likely to occur. Nor, as that decision also confirms, can an applicant necessarily rely on a defence that its relevant commercial behavior at around the time it filed the opposed application(s) might otherwise be seen by consumers as merely a satire or parody of the opponent’s claimed indicia or, in this case, of its rival’s advertising.

3. It is I think instructive to consider the facts in DC Comics.  There the opponent was the producer and publisher of the famous Superman comics, books, films and games and the licensor of replicas of the Superman character and its associated indicia for a range of merchandise such as clothing.  The applicant, who was previously unknown to the opponent, applied to register the trade mark superman workout for “Conducting exercise classes; fitness and exercise clinics, clubs and salons; health club services (exercise)” in Class 41, services which the opponent had never provided or licensed in the past and which it had no plans to do.  It was accepted that the word “superman” immediately conjured up thoughts of the opponent’s famous Superman character, albeit that in terms of the word’s actual dictionary meaning its use in the superman workout trade mark as a whole in the context of the claimed Class 41 services was otherwise quite apt.  That said, apart from the filing of the application itself, the sole evidence of any other behavior by the applicant which might shed light on whether, in June 2009, the applicant had done so in bad faith, was the uncontested fact that for at least two days in December 2009 the applicant had used an obvious copy or parody of the Superman character’s famous “S shield device” on its website. As she explains in the passages quoted below, Bennett J considered this alone was sufficient for the opponent successfully to invoke s 62A:

   [70] It is an agreed fact that Cheqout [the trade mark applicant] used the [opposed superman workout] trade mark together with the BG shield device in relation to its personal training and film and entertainment services and in titles to video clips appearing on its website. The triangular shape of the BG shield device is of a similar shape and style of lettering to the S shield device in DC Comics’ [the opponent’s] trade marks. This similarity can be observed through the side to side comparison of the devices:

[71] The evidence as to the use of the BG shield device as at the priority date of 2 June 2009 is not clear. What is clear is that Cheqout’s website displayed the BG shield device at the time the images in the statement of agreed facts were captured on 15 December 2009. It only removed the BG shield device after receipt of a “cease and desist” letter sent on behalf of DC Comics on 17 December 2009.

[72] The registrar’s decision sets out evidence adduced in the statutory declaration of Mr Gabrielle, the sole director and company secretary of Cheqout. Mr Gabrielle stated that the use of the words “superman workout” was designed to:

convey to potential users of my exercise program the potential of changing yourself into a muscularly powerful athletic superman … not to associate my exercise program with the Opponent’s comic book character.

[73] That assertion is, in my view, at odds with the use of the BG shield device, to which Mr Gabrielle’s evidence did not refer. It was Mr Gabrielle’s decision to use the words “superman workout” together with the BG shield device. As the sole director of Cheqout, that mental element is attributable to the company. In my view, the inference is clear, from the immediate use of the trade mark together with the BG shield device that, in making the application to register the trade mark, Mr Gabrielle (and therefore Cheqout) intended to use it in combination with the BG shield device in order to strengthen the allusion to Superman. The inference can also be drawn that this use was designed to gain a benefit by appropriating Superman indicia and the reputation of the DC Comics superhero, so as to further the viewer’s association between the trade mark and the Superman word mark.

[74] This is a “relevant circumstance” in a consideration of bad faith for the purposes of s 62A: Fry Consulting at [167].

[75] The registrar submits that if the fair use of the mark is unlikely to deceive or cause confusion, then this should “undercut” any argument that the application to register the trade mark was in bad faith. However, an important factor in both the registrar’s decision and my conclusion as to whether the trade mark is likely to deceive or cause confusion is the absence of any of the indicia associated with Superman. The relevant use of the trade mark for s 60 purposes is the notional use of the mark itself, which properly excludes the appropriation of indicia associated with Superman.

[76] Conversely, s 62A was introduced into the Act as a separate ground of opposition to the registration of a trade mark. Section 62A does not require the opponent to establish that the trade mark’s use would result in deception or confusion. That aspect is the subject of other grounds of opposition, such as ss 43 and 60. Such a requirement would, in my view, contradict the legislative intent in introducing a new ground of opposition by limiting its application to circumstances provided for by existing grounds. Evidence that the use of a mark is likely to cause confusion or deception may be persuasive in considering whether the application to register a mark was in bad faith. However, it is neither determinative of that finding, nor a prerequisite for it.

[77] I am satisfied that DC Comics has established that Cheqout made the application for the trade mark in bad faith. This is evidenced by the use, soon after the application, of the word superman together with the BG shield device, in the context of male fitness and strength. I note also that the red, white and blue colours traditionally used in conjunction with the Superman character were used by Cheqout together with the BG shield device. The design of the BG shield device closely resembles the insignia closely associated with the DC Comics character and the DC Comics registered trade marks. I am satisfied that at the date of application for the trade mark, Cheqout’s conduct fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons.

1. Based on this precedent, I am satisfied in the present case, too, that the Applicant’s actions before and around the Priority Date as described earlier cast significant doubt on its intentions in filing the Applications.  Moreover unlike the position in DC Comics, here the parties are direct rivals in business and the evidence shows that the Applicant commenced using the Tagline on 1 March 2012, shortly after making its complaint about the Opponent to the ACCC in February 2012.  The Applicant does not deny that it did so in the knowledge that, indeed because, the Opponent had already been using the Tagline prominently in its advertising for its own coffee products for some time.  During March the Applicant gradually widened its use of the Tagline, culminating at the end of the month with the roll out of its imitative print and electronic media campaign.  On 29 March 2012 it decided to file the Applications, seeking exclusive rights in marks prominently featuring the Tagline in association with the name of the Applicant’s business or with the non-distinctive phrase “crop to cup”.  Why it should want to do so is not clear to me from the evidence it relies on.

2. In all the circumstances I am satisfied that at the Priority Date the Applicant’s conduct in filing the Applications, using the formulation which guided Bennett J in DC Comics, “fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons.”[16] It is one thing to imitate a rival’s advertising campaign, but it is quite another to seek to acquire registered rights in trade marks which feature the very Tagline prominently used in that advertising. I do not think it is necessary to speculate as to whether the Applicant was motivated by a desire to provoke the Opponent, or to “piggyback” on its advertising, or to “dilute” the Tagline’s value to the Opponent, or perhaps to inhibit the Opponent’s use of it, or for some other reason, and I do not do so. Whatever may have been the Applicant’s motivation, I am satisfied that the Opponent has established its ground under s 62A.

   [16] This being the “apt touchstone” approved by Dodds-Streeton  J in Fry Consulting at [165].

Decision

1. Section 55(1) of the Act relevantly provides that, unless the proceedings are discontinued or dismissed:

   …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.

2. I have found the oppositions to be successful on the ground raised pursuant to s 62A of the Act. I accordingly refuse to register trade mark applications number 1483189 and 1483193.

Costs

1. Both parties requested an award of costs in their favour.  As the successful party, the Opponent is so entitled and I accordingly award costs against the Applicant as per Schedule 8 of the Trade Marks Regulations 1995, with costs for the second of the two oppositions to be assessed as set out in the table attached to the Hearing Officer’s decision in James Hardie & Co Pty Ltd v Hume Industries (Malaysia) Berhad (2001) 53 IPR 591.

Michael Kirov
Hearing Officer
Trade Marks Hearings
31 July 2014