Carl Anderson v Natala Investments Pty Ltd

[1996] ATMO 66

TRADE MARKS ACT 1955

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

Re:      Opposition by NATALA INVESTMENTS PTY LTD to the registration of      trade mark application number 630796 in the name of CARL ANDERSON

As set down by the transitional provisions of Part 22 of the Trade Marks Act 1995, the provisions of the Trade Marks Act 1955 continue to govern this opposition.  Accordingly, unless otherwise specified, the authority I refer to is the Trade Marks Act 1955.

This matter concerns application number 630796 which was lodged on 27th May 1994 in the name of Carl Anderson (the applicant).  The applicant sought to register the
mark shown here

in respect of “delivery services relating to beverages and alcoholic drinks” in class 39.

Acceptance of the mark was advertised in the Official Journal of Trade Marks of 27th July 1995.  On 23rd October 1995, Natala Investments Pty Ltd (the opponent), lodged a notice of opposition to registration of the applicant’s mark.  The opposition was based on a number of grounds, but at the hearing the opponent pursued only those based on section 28 of the Act, namely, on para (a), that use of the applicant’s mark would be likely to cause confusion, on para (b), that its use would be contrary to law and on para (d), that it was not entitled to protection in a court of justice; and, that the applicant was not the proprietor of the mark sought to be registered, in terms of section 40 of the Act.

The evidence
The evidence in support, which was lodged on 24th January 1996, consists of the following:

*         A statutory declaration by Gary Edward Gleeson, dated 14th December   1995, and exhibits GEG1-GEG5 (first Gleeson declaration);

*         A statutory declaration by Wayne Allard Haase, dated 14th December   1995, and exhibits WH1-WH9;

*         A statutory declaration by Gary Edward Gleeson, dated 23rd January              1996, and annexure GEG1 (second Gleeson declaration).

Mr Gleeson, a director of Pelerman Group of Companies, which includes the opponent company, states in his first declaration that, on or about 30th May 1994, the opponent acquired the Benowa Tavern business, including the part of business known as the “Ring a Drink” business of the retail and delivery of alcoholic and other beverages.  The terms of acquisition included the rights to the RING A DRINK trade mark, a copy of which is affixed to his first declaration as exhibit GEG1, and all associated goodwill.  Mr Gleeson provides sales value of the goods under the mark for the 1994 financial year and shows promotional material in exhibits GEG4 and GEG5.  He further informs that the mark was amended in early 1995, as shown in exhibit GEG3, for use in respect of alcoholic beverage delivery service and associated goods.

Mr Haase, who is a director of K A and A B Haase Pty Ltd, explains that the applicant registered “Ring a Drink” as a business name in 1988.  A copy of a business names extract is affixed to his declaration as exhibit WH1.  In approximately 1989, the applicant was prevented from continuing his business and subsequently was charged for selling alcohol without a licence under the Liquor Act.  In about June 1989, the applicant approached Mr Haase, who agreed that his company take over the “Ring a Drink” business, in return for which the company would employ the applicant in the business.  The applicant was to reimburse the company for expenses associated with the running of the business.  Mr Haase declares that at no time was there ever any mention that the transfer was to be other than unconditional, or that any rights were to be withheld.  It was understood that the business, the business name, and the trade mark then used by the applicant were to be transferred to Mr Haase’s company.  However, the agreement was not recorded in writing. 

Upon the company taking over the business, it became part of the business of the Benowa Tavern and the business name registration and telephone number were transferred to the company. 

According to Mr Haase, in approximately 1993, as an employee and in the course of employment by Mr Haase’s company, the applicant developed the trade mark the subject of this application.  For the period Mr Haase’s company operated the “Ring a Drink” business, from June 1989 to May 1994, substantial reputation was established in the subject trade mark.  The mark was extensively used by the company in the Benowa Tavern business.  Examples of the promotional material of the trade mark are marked as exhibits WH5 and WH6. 

Mr Haase further declares that a contract to sell the “Ring a Drink” business and the trade mark was settled in about May 1994, and that it was only after the applicant learned of that sale that he lodged the application, on 27th May 1994, to register the subject mark.     

To Mr Gleeson’s second declaration is attached a schedule of turnover figures for the “Ring a Drink” business since 30th May 1994.  He believes that his company’s interest in the matter arises from the company being the owner of the mark as an adjunct of the goodwill of the “Ring a Drink” business concerned with the mark.

The applicant did not serve any evidence in answer.

The matter was set down for hearing in Canberra on 23rd September 1996.  Ms Kerry Newcomb, solicitor, of Pizzeys, patent and trade mark attorneys of Brisbane, appeared for the opponent.  No representation was made on behalf of the applicant, nor were any written submissions received from the applicant.

Submissions
Ms Newcomb first discussed the evidence in support of the opposition.

She acknowledged that, to succeed in relation to the grounds based on s 28, the opponent must establish that use of the applicant’s mark would be likely to deceive or cause confusion in terms of para 28(a), and that the applicant’s conduct had been blameworthy in terms of para 28(d).  She submitted that, in light of the test concerning this matter, as expounded in Smith Hayden & Co Ltd’s Appn (1946) 63 RPC 97 and, having regard to the extensive reputation of the opponent and its predecessor in the business, in relation to the alcoholic beverage delivery services under the trade mark, it was reasonably likely that, if the applicant used the mark in connection with the same services, deception and confusion amongst a substantial number of persons would occur. For support, she referred to the mark’s reputation between the years 1989 and 1994 and commented that the reputation built up by the present opponent should also be taken into account.

In discussing the issue of blameworthy conduct, she said that the applicant, being the employee of K A & A B Haase Pty Ltd, had no legal right to file the present application when he became aware of the pending sale of the “Ring a Drink” business to the opponent.  Furthermore, as found in Sporoptic Pouilloux SA v Arnet Optic Illusions Inc 32 IPR 430, in the present case there was clearly an absence of evidence establishing the bona fides of the applicant. Therefore the mark was not entitled to protection in a court of justice.

In submitting that the applicant’s mark should not be allowed to proceed to registration by virtue of contravening para 28(b), Ms Newcomb referred to Australian Law of Trade Marks and Passing Off, 2nd edition, by D R Shanahan, and the case Re Application by Athol Thomas Kelly 8 IPR 667, where the applicant’s mark was found to infringe the Advance Australia Logo Protection Act 1984.  Whilst acknowledging that para 28(b) applies only to illegality stemming from use of the mark itself rather than the manner in which the applicant’s business has been arranged, she argued that, if the applicant used the words “Ring a Drink”, including the words “Don’t Drink and Drive” in connection with alcoholic beverages, it would be implied that the applicant had some licence or legal right to sell alcohol.  That connotation could be viewed as arising from use of the mark itself due to its particular nature.   Alternatively, she said, by allowing this connotation to flow into the market place, the applicant showed a clear lack of bona fide use of this particular mark.

It was further submitted by Ms Newcomb that the applicant was not, at the date of this application, the proprietor of the subject mark and was not entitled to claim to be the proprietor. 

Discussion
Section 28
The provisions of this section of the Act read:

A mark -
(a)  the use of which would be likely to deceive or cause confusion;
(b)  the use of which would be contrary to law;
(c)  which comprises or contains scandalous matter; or
(d) which would otherwise be not entitled to protection in a court of justice,
shall not be registered as a trade mark. 

To offend against the provisions of para 28(a), the applicant’s trade mark would need to resemble the opponent’s trade mark which has become well known in the market place to such an extent that use of the applicant’s mark would raise the likelihood of deception or confusion.  In Southern Cross Refrigeration Co v Toowoomba Foundry Pty Ltd [1954] 91 CLR 592, it was stated by the High Court at p 608:

“registration should be refused if it appears that there is a real risk that the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source.”

In the same case, it was established that the reputation of the opponent’s mark in Australia is to be assessed from the date of lodgment of the application under consideration, the date of the present application being 27th May 1994. 

In Mr Gleeson’s first declaration it has not been disputed that the business, which included all rights to the trade mark RING A DRINK, was acquired by the opponent from the Benowa Tavern, which had been operated by K A & A B Haase Pty Ltd, “on or about” 30th May 1994, i.e. after the date of the application.  It is also noted that a copy of that mark, which is attached to Mr Gleeson’s declaration as exhibit GEG1, is not identical to the mark of the present application in that, apart from the telephone number, some particulars as to delivery time of the drinks and the name “The Benowa Tavern” with an address and facsimile number, the mark also includes the words “Don’t Drink Drive”.  

The applicant, in whose name the business name “Ring a Drink” was registered between 1st July 1988 and 6th June 1989 (exhibit GEG2 of Mr Gleeson’s first declaration), had been employed by K A & A B Haase Pty Ltd from about June 1989, as evidenced by copies of group certificates under exhibit WH3 of Mr Haase’s declaration.  The last group certificate from 1st July 1993 to 30th June 1994 indicates the applicant was employed by the company until 29th May 1994.  Even though, according to Mr Haase’s declaration, it was agreed that the business, including the trade mark, would be transferred to the K A & A B Haase Pty Ltd, the agreement was not recorded.  Upon the company taking over the business, Mr Haase declares, it became part of the business of the Benowa Tavern and the business name was transferred to the company.  That company is said to have extensively used the mark RING A DRINK and established reputation in the business during the period from June 1989 to May 1994.  However, no turnover figures concerning the services during the specified period have been provided.  The promotional material contained in exhibits WH5 and WH6 shows the words “Ring a Drink” and the device of a policeman, the main features of the subject mark, in combination with other matter, or together with other matter but without the device.  The copies of invoices and accounts relating to some shared expenses by the company with the applicant, including a number of promotional and advertising activities for the “Ring a Drink” business under WH7 of Mr Haase’s declaration, do not support the claim concerning the alleged reputation of the mark before the date of this application. 

In the absence of evidence that the mark had achieved substantial reputation before May 1994, while the alcoholic beverage delivery services were operated by K A & A B Haase Pty Ltd as part of the business of the Benowa Tavern, the opponent cannot claim accrual of the reputation as the successor to that business.  Thus, the opponent has failed to establish the requirement in terms of para 28(a) of the Act, i.e. that use of the applicant’s mark is likely to cause deception and confusion.  

Having found as I have in relation to para 28(a), I must now determine whether the applicant has been caught by the provisions of paras (b) and (d). 

While a mark containing the words “Ring a Drink Don’t Drink Drive” may create an impression in the minds of the purchasing public that the delivery services related to the supply of alcoholic beverages, which requires some licence or legal right to sell alcohol, I do not believe the same message is likely to be conveyed to the customers by the inclusion of the mere words “Ring a Drink” in the mark the subject of the present application, particularly, given that the services of the application also embrace delivery of non-alcoholic beverages.  Consequently, I cannot attach any weight to the opponent’s argument that any illegality, in terms of para 28(b), arises from the applicant’s mark itself, and that therefore use of the mark would be contrary to law. 

In relation to para 28(d), in Australian Law of Trade Marks, supra, D R Shanahan states, at p 145:

“... the purpose of the paragraph seems clear enough.  As Lord Diplock said in the “GE”case [(1973) RPC 297 at 329], the original provision of the British Act of 1985 was “clearly designed to prevent the proprietor obtaining by registration protection for a mark of such a character that a court of equity would have exercised its discretion to refuse to grant to its proprietor an injunction to restrain its being infringed by a usurper”.

The author refers to Radio Corp Pty Ltd v Disney, (1937) 57 CLR 448, where Dixon J, considering a matter in terms of s 114 of the Trade Marks Act 1905, had said, at p 459:

“If the circumstances are such that its adoption will give the applicants no right to protection by injunction or other remedy under the general law, then it should be kept off the Register.”

Mr Shanahan draws the conclusion that, “a somewhat wider inquiry appears to be indicated by the origins and purpose of this provision as described since in the “GE” case [supra], and in particular by the concern of the original British provision with the honesty with which the mark was adopted and used.”  He explains that a mark could be disqualified under para 28(d) if it has been used in connection with fraud or dishonesty. 

Mr Haase declares that, by a contract dated 20th April 1994, it had been agreed to sell the business, including the trade mark, to the opponent.  He is vague on the time of settlement of the contract, indicating it took place in about May 1994.  In his opinion, the applicant lodged the present application after learning of the sale.  Mr Gleeson is more precise in recalling that the assignment occurred on or about 30th May 1994, which corresponds to the Business Names Extract showing the change of the business name as having been recorded on 30th May 1994.  It appears then that the applicant was aware of the planned sale and took action to lodge the present application just before the settlement of the sale.  Be that as it may, at the time of lodging the application on 27th May 1994, the applicant was still in the employment of K A & B A Haase Pty Ltd, as evidenced by the group certificate for the financial year 1993/1994 marked as WH3 of Haase’s declaration, which shows that the applicant ceased to be employed by the company on 29th May 1994.  

The present situation is similar to that considered in Casson’s Trade Mark (1910) 27 RPC 65, where, as a result of enquiries, a member of a partnership had received a reply from the Trade Marks Office that a certain mark was available for registration only to learn that on the day that this information had become known to the sales manager, who was then employed by the company, that he had applied to register the mark in his own name. Such an act was held to be inconsistent with the good faith “which ought to obtain between employee and employer”. In this regard, see also Crooks Michell Peacock Stewart Pty Ltd v Kaiser (t/a Commercial Art & Industrial Design) 29 IPR 225.

Even though the onus rests on the applicant to defend his application, no evidence in answer was lodged by the applicant, nor any submissions made by him or on his behalf.  There is nothing before me as to why, presumably in the knowledge of the proposed assignment of the mark to the opponent, he applied to register the subject mark which, although not identical, has close nexus of similarity to the mark he has used in connection with the drink delivery services during his term of employment by the predecessor of the opponent’s business.  As the matter stands, the fact that the applicant was the creator of the mark during his employment by the K A & A B Haase Pty Ltd did not grant him the right to apply for its registration.  Consequently, this matter raises serious doubt as to the applicant’s good faith.  I find, therefore, that the applicant’s onus in this regard has not been discharged. 

Proprietorship

Under the provisions of sub-section 40(1) of the Act:

A person who claims to be the proprietor of a trade mark may make application to the Registrar for the registration of that trade mark in Part A or Part B of the Register.

The concept of proprietorship rights in a trade mark are based on the principle of prior use of a conflicting mark in Australia - see Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402.

The opponent has not provided information concerning first use of the mark through its predecessor in business.  For some guidance on this issue, I have perused Mr Haase’s samples of the promotional material under exhibits WH5 and WH6 of which only two closely resemble the mark of this application.  These samples of advertising, however, fail to indicate when and where, and how extensively, the items were placed in circulation, so as to determine whether they can be considered for the purposes of deciding first use of the mark (see Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1979] RPC 410 and Moorgate Tobacco Co Ltd v Philip Morris Ltd [1984] 156 CLR 414).

It could be reasonably assumed that the applicant used the mark when he registered “Ring a Drink” as a business name in 1988 and before he joined K A and A B Haase Pty Ltd.  However, in the absence of any evidence to that effect, and in accordance with the applicant’s statement under sub-reg 8(2), it is to be considered that the applicant used or intended to use the mark only at the time of lodging the present application.      

Whilst I do not question Mr Haase’s credibility as to use of the mark by his company between June 1989 and May 1994, the lack of concrete evidence prevents me from deciding whether the opponent can claim prior use of the mark.  This issue therefore must remain inconclusive for the reasons explained earlier. 

In disputes concerning rights to proprietorship the parties must be claiming the same mark, or one which is almost the same - see Tavefar Pty Ltd v Life Savers (A’asia) (1988) 12 IPR 159; Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) AIPC 91-049 and Karu Pty Ltd v Jose (1994) AIPC 91-101.

I have previously indicated that two samples of Mr Haase’s exhibits WH5 and WH6, which are alleged to be representations of the mark, are similar to the subject mark.  The same essential and dominant elements of the applicant’s mark, the device of the policeman and the words RING A DRINK, are prominently displayed in the said opponent’s representations.  As their additional features, namely, the frequently used words of the warning ‘Don’t Drink Drive”, a telephone number, the words “Cold”, “Beer - Wine - Spirits”, details of time taken to deliver the drinks, the times and days when deliveries are carried out, and the place of business with an address and a fax number, clearly constitute non-trade mark matter, in light of the directives on assessing substantial identity of the marks in Shell Co (Aust) Ltd v Esso Standard Oil (Aust) Ltd, (1961) 109 CLR 407, at p 414, whereby the similarities and differences of the marks should be noted “and their importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison”, I consider the marks in question to be substantially the same.

Whilst I have concluded that the marks are substantially identical, the opponent’s claim in relation to proprietorship of the mark fails owing to the absence of any supporting evidence of use of the mark before the date of this application.

Conclusion

In view of the foregoing, I have found the opposition has been unsuccessful in relation to the ground based on s 40.  I have, however, determined that the subject mark is one which is not entitled to protection in a court of justice in terms of para 28(d) of the Act  It follows that the opposition as a whole is successful.  I must therefore refuse the application.  

I see no reason why costs should not follow the action.  Accordingly, I award costs to the opponent.

Vija Zars
Hearing Officer
20 December 1996