Capricorn Society Limited v Ignitionone, Inc

[2014] ATMO 112

TRADE MARKS ACT 1995

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

Re:Opposition by CAPRICORN SOCIETY LIMITED to application under section 92 of the Act by IGNITIONONE, INC to remove trade mark number 1219946 (16, 35) - IGNITION - in the name of CAPRICORN SOCIETY LIMITED

Delegate:	Heath Wilson
Representation:	Opponent:  Madeleen Rousseau of Herbert Smith Freehills Applicant: Sean McManis of Shelston IP
Decision:	2014 ATMO 112 Application under section 92(4)(b) of the Trade Marks Act 1995 – whether use of a trade mark – discretion under section 101 of the Act not exercised – Trade Mark to be removed for some services – No award of costs.

Background

1. On 30 May 2013, IgnitionOne, Inc (‘the Applicant’) applied for removal of trade mark registration no. 1219946 under section 92(4)(b) of the Trade Marks Act 1995 (‘the Act’). The application for removal was in relation to the class 35 services of the trade mark registration and the details of that registration can be seen below:

   Trade Mark No: 1219946

   Priority Date: 18 January 2008

   Trade Mark: IGNITION (‘the Trade Mark’)

   Specification of Goods and Services:

   Class 16: Printed matter and publications including magazines and newspapers, inserts and supplements for newspapers and magazines, books and journals; directories; posters and promotional materials

   
   Class 35: Advertising services; dissemination of advertising materials; advertising and marketing by means of newspapers, directories, magazines and other media including the Internet; arranging for newspaper subscriptions; retailing and wholesaling of newspapers; conducting sales promotions; organising exhibitions and trade fairs for commercial or advertising purposes; provision of advertising space and advertising services, including but not limited to the provision of such services electronically, by means of computers, computer networks or the Internet; compilation of information into computer databases

2. The owner of the Trade Mark is Capricorn Society Limited (now ‘the Opponent’) which filed a notice of intention to oppose the application for removal on 9 July 2013. The Opponent’s statement of grounds and particulars was filed on 9 August 2013, followed by the notice of intention to defend from the Applicant.

3. The Opponent filed as evidence in support of the opposition the declaration of David Fraser (CEO of Automotive of the Opponent) made 16 December 2013 with annexures DF-1 to DF-13 (‘the Fraser declaration’).

4. In response the Applicant filed evidence in answer comprising the statutory declaration of William Margiloff (CEO of the Applicant) made 13 March 2014 with exhibits WM-1 to WM-5.

5. Those two declarations constituted the entirety of the evidence in this matter. The hearing of the opposition was set down for Canberra on 20 October 2014 and the matter was allocated to me as a delegate of the Registrar of Trade Marks. In accordance with my directions, both parties provided me with a written outline of submissions prior to hearing the opposition.

6. On 20 October 2014 I heard the opposition to removal of the Trade Mark. Sean McManis of Shelston IP appeared on behalf of the Applicant and Madeleen Rousseau of Herbert Smith Freehills represented the Opponent.

The Law and the Onus of Proof

1. Paragraph 92(4)(b) of the Act relevantly provides:

   (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.

2. Paragraph 100(1)(c) of the Act makes clear that the Opponent carries the burden of rebutting an allegation of non-use made under paragraph 92(4)(b). The current application for removal was filed on 30 May 2013. It follows that the Opponent must demonstrate use of the Trade Mark in the three year period ending on 30 April 2013 (being ‘the relevant period’).

3. Section 7 (5) of the Act provides:

   use of a trade mark in relation to services means use of the trade mark in physical or other relation to the services.

4. Subsections 9(1) and (2) of the Act relevantly provide:

   (b)a trade mark is taken to be applied in relation to goods or services:

   (i)if it is applied to any covering, document, label, reel or thing in or with which the goods are, or are intended to be, dealt with or provided in the course of trade; or

   (ii)if it is used in a manner likely to lead persons to believe that it refers to, describes or designates the goods or services; and

   (c)a trade mark is taken also to be applied in relation to goods or services if it is used:

   (i)on a signboard or in an advertisement (including a televised advertisement); or

   (ii)in an invoice, wine list, catalogue, business letter, business paper, price list or other commercial document;

   and goods are delivered, or services provided (as the case may be) to a person following a request or order made by referring to the trade mark as so used.

   (2)In subparagraph (1)(b)(i):

   covering includes packaging, frame, wrapper, container, stopper, lid or cap.

   label includes a band or ticket.

Consideration

Use of the Trade Mark

1. The Opponent may rebut the allegation of non-use by providing evidence of use of Trade Mark in relation to the class 35 services occurring within the relevant period. Australian legal authority further establishes that a demonstrated single bona fide instance of use of the Trade Mark in the relevant period will suffice to answer the allegation.[1] The High Court of Australia also found in E & J Gallo Winery v Lion Nathan Australia Pty Ltd:[2]

   Whilst a single act of sale may not be sufficient to prevent removal, in the case of genuine use, a relatively small amount of use may be sufficient to constitute "ordinary and genuine" use judged by commercial standards.

   [1] Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 26 at [14] and [16].

   [2] E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15 at [64].

2. Any kind of use of the Trade Mark in the relevant period will not suffice. It must be use to distinguish the goods or services dealt with or provided in the course of trade by a person from goods or services provided by any other person.[3] In other words, the use must indicate a connection in the course of trade between the services in class 35 and the Opponent. The majority of the argument in the hearing revolved around whether the Trade Mark had been used in relation to advertising services.

   [3] See section 17 of the Act.

3. The evidence provided to rebut the allegation of non-use is contained in the Fraser declaration. Mr Fraser declares that the Opponent was established in 1975 and is Australia’s largest company in the automotive parts buying industry operating on co-operative principles.[4]

   [4] Fraser declaration at paragraphs 7 to 8.

4. Mr Fraser concedes that the primary business activity of the Opponent is the provision of trade credit accounts to its members. The members are business owners in the Australian automotive industry including registered automotive repairers, panel beaters, auto electricians, service stations and general workshops.[5]

   [5] Fraser declaration at paragraph 9.

5. According to Mr Fraser, the first use of the Trade Mark in Australia occurred in March 2005. Mr Fraser continues to describe the expansion of the Opponent’s business and the name of its monthly trade publication, being IGNITION magazine. The magazine showcases to members the services provided both by the Opponent and its suppliers. Mr Fraser declares that the word IGNITION was chosen as the brand for the promotional service and the Opponent’s monthly publication.

6. Within the so-called ‘Capricorn Short Form Prospectus’[6] (dated 12 December 2013) under the heading ‘Publications and Information’ it is clear that one of the publications the Opponent makes available to authorized purchasers is:

   Ignition ®, which is a magazine provided to Authorised Purchasers and Preferred Suppliers that contains a wide range of information including advertising of the services of Preferred Supplier, Capricorn and related companies that may be of interest or relevance to Authorised Purchasers.

   [6] Exhibit DF-2.

7. Exhibit DF-3 to the Fraser declaration includes extracts from the Opponent’s website with mention of the complimentary publication IGNITION issued in November and December 2013. Most importantly, exhibits DF-6 to DF-9 are copies of the Opponent’s IGNITION monthly publication distributed in the relevant period to its members.

8. On all of the magazines, the title is ‘IGNITION’ but the word ‘Capricorn’ appears in smaller text above it. This is followed by the tagline “your magazine, your business, your capricorn”. However, due to the comparative size of the font on the title of the magazine, I find that it is the word ‘IGNITION’ which overwhelms the other elements on the front page. After assessing the other examples provided it is also evident that the publication is commonly referred to as ‘IGNITION’ and so I find that it functions as a trade mark.

9. Within each publication is a section entitled “Capricorn Classifieds”. Under the instructions “How to advertise in the Capricorn Classifieds”, there is an indication that a requested advertisement will be published in the next edition of IGNITION.

10. It is further evident that the publication includes advertisements for businesses other than the Opponent. If it were the case that the Opponent was simply advertising its own services, this would not equate to the provision of advertising services in the requisite sense (i.e. for others). At paragraph 42 of the Fraser declaration a number of businesses are listed that the Opponent has provided advertising services to in the relevant period.

11. Exhibit DF-11 contains extracts of current use of the word IGNITION on the Opponent’s website. As a result, it does not assist the Opponent in establishing use of the Trade Mark in the relevant period. The Fraser declaration also provides that ‘IGNITION’ first appeared on the Opponent’s website from 28 November 2012.[7]

    [7] Fraser declaration at paragraph 41.

12. The fact that the Opponent’s ‘IGNITION’ publication is provided free of charge to members was also highlighted by the Opponent.  However, the provision of free products or services may still amount to use in the course of trade in certain circumstances[8]. In the Golden Pages decision, it was held that free telephone directories containing classified advertising amounted to use in the course of trade since revenue was raised from that advertising. Similarly, the Opponent in the current matter derives a benefit from its advertising services because the:

    [P]romotion of suppliers’ services to members drives additional sales from suppliers being placed on member trade credit accounts; suppliers pay the Opponent a service fee based on sales placed on member trade credit accounts.[9]

    [8] See for example, Re Estate Agents Co-Operative Ltd (1990) 20 IPR 547; VISA Trade Mark [1985] RPC 323; Golden Pages Trade Mark [1985] FSR 27 (IrSC) (‘Golden Pages’).

    [9] Fraser declaration at paragraph 30.

13. There was no dispute that the Opponent has supplied evidence that the ‘IGNITION’ magazine was distributed to its members in the relevant period. The main argument from Mr McManis was that the Opponent does not provide advertising services for others and as a consequence, use of the Trade Mark was not in relation to advertising. In addition, he argued that the use of the word ‘IGNITION’ by the Opponent was not use of a trade mark, but simply the title of a publication it produces.

14. In relation to the latter argument, Mr McManis referred to the decision of Nutrition for Life International LLC v Merck & Co Inc[10] in support of the proposition that the name of a publication does not amount to use of a trade mark. In that decision the expression “Nutrition For Life” was the title of a book, as was “TRIM FOR LIFE”[11] (in an earlier decision). However, those examples are not analogous to the Opponent’s ‘IGNITION’ publication. It is not the title of a book or film I am considering, but rather, the IGNITION publication is produced for use in the course of trade, not as a work of literature. It is accurate to say that an author whose book is published does not automatically acquires trade mark rights in its title[12] but the above decisions are not authority for a general proposition that the title of a publication can never function as a trade mark. Trade mark use in all instances depends on an objective examination of the use in the context in which it appears.[13] I am satisfied that the use of the word IGNITION during the relevant period has been as a trade mark and I now turn to the issue of whether that use has been in relation to the class 35 services. 

    [10] Nutrition for Life International LLC v Merck & Co Inc [2003] ATMO 55.

    [11] See Fortuity Pty Limited v Ereneos (Renos) Savvides [2000] ATMO 89.

    [12] Nutrition for Life International LLC v Merck & Co Inc (supra) at [24].

    [13] See Aldi Stores Ltd Partnership v Frito-Lay Trading Company GmbH [2001] FCA 1874 at [27].

The nature of the Advertising Services

1. Mr McManis relied heavily on the decision in Mid Sydney Pty Ltd v Australian Tourism Co Ltd & Ors[14] to assist in the determination of the nature of the services provided by the Opponent. In that decision one of the issues before the Full Federal Court was what constituted “property management services” in the context of an action for infringement:

   [O]ne who conducts or manages a business on property of another is not for that reason alone to be regarded, within the ordinary meaning of the words, as providing property management services. It makes no difference that the property is designed or adapted specifically for the purpose of the particular business or that the conduct of the business includes, as incidental to it, the doing of a number of things of a kind which might be done by a property manager in relation to property under its management. The conduct of an hotel business includes the accommodation of guests, the operation of restaurants and bars (including compliance with the liquor licensing law) and the provision of conference and business facilities and of other services normally offered by hoteliers. These activities cannot ordinarily be described as "property management services".

   [14] [1998] FCA 1616 (‘the Chifley Tower decision’).

2. As I have mentioned before, the Opponent’s main business is not the provision of advertising services. However, it does not follow from that fact the Opponent cannot demonstrate use of the Trade Mark in relation to advertising services (as can be seen in ‘the Chifley Tower’ decision):

   Certainly, it is true that a provider of property management services is no less such a provider because it provides, in the course of its own business, other services as well…

3. The evidence before me indicates that one of the Opponent’s services is undoubtedly the provision of advertising services for its members under the Trade Mark. For the avoidance of doubt, I find that the fashion in which the Trade Mark has been applied in relation to the services (i.e. as the complimentary publication sent to members) is within the scope of subsection 9(1) of the Act.

4. While the Opponent would be unlikely to describe itself as an advertising agency, this does not mean it cannot offer a particular advertising service alongside its other services. I find that the Applicant’s submissions on this particular issue, which include an extract from Wikipedia ® of various types of advertising agencies, do not assist me. The Opponent is not an advertising agency per se but its business activities encompass such a service provided to others. I also note for completeness that the simple fact that the Applicant may currently provide services more akin to those provided by a dedicated advertising agency does not affect my assessment of the particular services provided by the Opponent.

5. The broad claim in the specification for ‘Advertising services’ is not limited to any particular type of advertising nor is it limited in the way that service may be offered to consumers. It must, however, retain the essential characteristic of being an advertising service offered in the course of trade to consumers. I am not convinced that the use demonstrated by the Opponent is merely incidental or ancillary use, but rather, another service provided by the Opponent to its members.

6. Taking the above factors into account, I have highlighted below (in bold) the class 35 services in relation to which the Trade Mark has been applied (including those services which are a true equivalent kind of service):

   Class 35: Advertising services; dissemination of advertising materials; advertising and marketing by means of newspapers, directories, magazines and other media including the Internet; arranging for newspaper subscriptions; retailing and wholesaling of newspapers; conducting sales promotions; organising exhibitions and trade fairs for commercial or advertising purposes; provision of advertising space and advertising services, including but not limited to the provision of such services electronically, by means of computers, computer networks or the Internet; compilation of information into computer databases

7. In the event that the application for removal was made out, Ms Rousseau also argued that the Registrar exercise her discretion under section 101(3) of the Act and allow the Trade Mark to remain on the Register.

Section 101(3) of the Act:

1. Under subsection 101(3), the circumstances under which the Registrar may exercise her discretion need not be exceptional and there are no particular circumstances that must (as opposed to ‘may’) be taken into account. For example, the factors considered in Pioneer Computers Australia Pty Limited v Pioneer KK [15] included:

   In E & J Gallo at [202]-[203], Flick J stated that the following factors set out by Falconer J in Hermes Trade Mark [1982] RPC 425 [‘ Hermes’] were of assistance in considering the exercise of the discretion:

   ·           there had been no abandonment of the trade mark;

   ·           the registered proprietors of the mark still had a residual reputation in the mark;

   ·           there had been sales by the registered proprietors of goods for which removal was sought since the relevant period ended;

   ·           the applicants for removal had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark;

   ·           the registered proprietors were not aware of the applicant’s sales under the mark.

   [15] Pioneer Computers Australia Pty Limited v Pioneer KK [2009] FCA 135 at [169].

2. The written summary of submissions from the Opponent simply request that in the event the ground for removal under paragraph 92(4)(b) was made out, the Registrar ought to exercise her discretion and allow the Trade Mark to remain on the Register for all the services in class 35. At the hearing Ms Rousseau elaborated on that submission and referred to the detriment to the Opponent should the Trade Mark be removed from the Register.

3. Ms Rousseau also referred to the length of use of the Trade Mark since 2005 and the sales figures driven by the Trade Mark. However, while I am satisfied that the Trade Mark has been used in relation to some of the services, I would hesitate to find that it is particularly well-known for the provision of those services. Accordingly, the alleged reputation of the Trade Mark for certain services is not a weighty factor in deciding whether or not to exercise the discretion.

1. I do not think that removal of the Trade Mark for certain services in class 35 would be conducive to public confusion. From the perspective of notional use it is possible that the Opponent could expand the use of its Trade Mark to general advertising agency services the like of which the Applicant appears to trade in. In reality I find this possibility to be unlikely given the history of the use of the Trade Mark before me.

2. On the basis of the above finding, the general public interest policy of section 92 in removing unused trade marks from the Register outweighs the factors relied upon in this case. As Kitto J stated in Re Carl Zeiss Pty Ltd’s Application[16]:

   It has been urged upon me that no deception of any particular purchaser has been proved, and that there is no practical interest of the public to be served by removing the mark from the register. This seems to me to put the matter the wrong way round. The Stiftung's omission to use the mark for the statutory period entitles the applicant to have the mark removed from the register unless sufficient reason appears for leaving it there. (Emphasis added).

   [16] Re Carl Zeiss Pty Ltd’s Application [1969] HCA 17; (1969) 122 CLR 1 per Kitto J (at 11).

3. In summary, sufficient reasons have not been provided to allow the Trade Mark to remain on the Register for the services it has not been applied to. I refuse to exercise the discretion under section 101(3) of the Act.

Decision

1. Section 101 of the Act provides:

101  Determination of opposed application—general

(1)Subject to subsection (3) and to section 102, if:

(a)the proceedings relating to an opposed application have not been discontinued or dismissed; and

(b)the Registrar is satisfied that the grounds on which the application was made have been established;

the Registrar may decide to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.

(2)Subject to subsection (3) and to section 102, if, at the end of the proceedings relating to an opposed application, the court is satisfied that the grounds on which the application was made have been established, the court may order the Registrar to remove the trade mark from the Register in respect of any or all of the goods and/or services to which the application relates.

(3)If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established.

(4)Without limiting the matters the Registrar may take into account in deciding under subsection (3) not to remove a trade mark from the Register, the Registrar may take into account whether the trade mark has been used by its registered owner in respect of:

(a)similar goods or closely related services; or

(b)similar services or closely related goods;

to those to which the application relates.

Note 1:If the registered owner of the trade mark has authorised another person to use it, any authorised use of the trade mark by that person is taken to be a use of the trade mark by the registered owner (see subsection 7(3)).

Note 2:For registered owner see section 6.

1. The Opponent has successfully rebutted the allegation of non-use in relation to certain services in class 35. I therefore direct that the Trade Mark remain on the Register for the following services in class 35:

   Class 35: Advertising services; dissemination of advertising materials; advertising and marketing by means of newspapers, directories, magazines and other media including the Internet; provision of advertising space and advertising services, including but not limited to the provision of such services electronically, by means of computers, computer networks or the Internet.

2. I direct that the Trade Mark be removed from the Register for the remainder of the services in class 35 of the specification.

Costs

1. Each party has had a measure of success in relation to the opposition to the removal action. I find that both Opponent and Applicant should bear their own costs of these proceedings and I therefore make no award of costs.

Heath Wilson
Hearings Officer
Trade Marks Hearings & Opposition
21 November 2014