Cranbrook School v Donald Herbert Wylie & Joy Rosalind Wylie

TRADE MARKS ACT 1995

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

Re:Opposition by Cranbrook School to registration of trade mark application 902222 (25) Cranbrook School Shield proceeding in the name of Donald Herbert Wylie And Joy Rosalind Wylie.

Delegate:

Ian Thompson

Representation:

Opponent

Carmen Champion of Counsel instructed by Aitken McLachlan Thorpe Applicant

Did not appear – written submissions by Maurice Harrison & Associates.

Decision:

1.s52 opposition: section 58 – opposition established

2 Costs ordered against opponent.

Background

Donald Herbert Wylie and Joy Rosalind Wylie ('the applicants') of Bondi Beach, New South Wales, have filed application to register a trade mark, current details of which are:

App No: 902222

Filing Date: 5 February 2002

Acceptance Date: 13 June 2002

Services:Class: 25 Clothing

Trade Mark:

Endorsement: The applicant has advised that the translation of the Latin words ESSE QUAM VIDERI appearing in the trade mark is TO BE RATHER THAN TO SEEM

On 11 October 2002, Cranbrook School, ACN 000 007 723 ('the opponent') of Bellevue Hill, New South Wales, filed Notice of Opposition (‘the Notice’) to the registration of the trade mark. The Notice cites most of the grounds available under the Trade Marks Act 1995.
Evidence in support was served and filed, as was evidence in answer, as allowed by the Act and Regulations thereto.
A hearing was held before me, as a delegate of the Registrar of Trade Marks, in Sydney, on Monday 19 July 2004. Carmen Champion of Counsel, instructed by Aitken McLachlan Thorpe, solicitors, represented the opponent. The applicants relied on written submissions by their solicitors, Maurice Harrison & Associates.

Evidence

The evidence comprises the following declarations:

Declarant	Position Known as	Date Made	Exhibits
Evidence in Support
Janet Margaret Howse	Archivist ‘Howse’	10 July 2003	A-Z & AA-CC
Jillian Therese McCormick	Business Manager, Opponent ‘McCormick’	10 September 2003	A-Z & AA-CC
Evidence in Answer
Donald Herbert Wylie	Applicant ‘Wylie 1’	8 December 2003	DHW1
Loy Rosalind Wylie	Applicant ‘Wylie 2’	8 December 2003	JRW1 – JRW5

Cranbrook School was officially opened on 22 July 1918. On 1 August 1918, the School Council adopted a badge for the school that is in every way identical, except for colour, to the opposed trade mark. The original design of the badge was executed by the artist Lloyd Rees who died in 1988
The Howse declaration shows this badge affixed to articles of clothing including cricket and rugby pockets, caps, hatbands, cufflinks and blazers dating from 1922 through to the present.
I will stress that, although the colours have changed, the ‘original’ badge and the ‘modern’ badge of Cranbrook School are identical. My understanding is that the colour was changed in order to accord with heraldic conventions. The colours in the context of this trade mark are alterations or additions which do not substantially affect its identity in terms of section 7(1) of the Act which provides:
7 Use of trade mark
(1) If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.
The trade mark is one which derives its identity from the arrangement of its graphical elements and not the colours in which it is rendered. The alteration of the colours does not, therefore, affect the identity of the trade mark and use of the ‘original’ Cranbrook trade mark is thus use of the ‘modern’ trade mark and vice versa.
Joy Wylie and Donald Wylie (‘the Wylies’) are proprietors of a business which sells school uniforms in premises at Bondi. The business, which was started by Mr Wylie, originally sold lingerie; however, in 1956, Mrs Wylie started sewing and selling school uniforms and in, or by, 1964 the business sold only school uniforms for some five schools.
In “the late 1970’s”, the Wylies started making and selling Cranbrook School uniforms. Initially, these did not have the opposed trade mark affixed to them. In 1986, after consultations with the then headmaster of Cranbrook School as to colour codes for the school badge, the Wylies paid their embroiderer to make up a disk from which the badge could be made. Thereafter, through to 2002, the Wylies made and sold uniforms for Cranbrook School with the badge attached.
Mrs Wylie attaches to her declaration letters from the opponent’s headmaster to parents advising them of changes to the uniform range – it is plain from these letters that the changes were at the instigation of the opponent. And, while Mrs Wylie attests that the applicants designed an item of clothing for the school on their own initiative, it is evident that it was for the opponent to approve (or reject) the suggestion.
On or about 18 January 2002, ‘out of the blue’, it would seem, the Wylies received a letter from the solicitors for Cranbrook school demanding that they cease using its logos. The Wylies complied with this demand and filed this opposed application on 5 February 2002.
It is apparent from the Wylies’ declarations that for a period of some years they were not the only supplier of the Cranbrook School uniform: these were also sold by Gowings, David Jones, Grace Brothers and Evercraft. It would appear that by (or during) the 1990s, Gowings, David Jones, Grace Brothers and Evercraft ceased selling the uniforms and Cranbrook School opened its own shop to sell its uniforms.

Issues

Mrs Champion presented submissions in terms of sections 42, 58 and 60 of the Trade Marks Act 1995. The arguments under section 42 addressed section 42 of the NSW Fair Trading Act 1987 and the Copyright Act 1968. The applicant’s written submissions consist of denials of the grounds pursued. I will make my decision under sections 58 and 42 of the Act.
One striking element of this matter is the position that is apparently taken by the Wylies. That is, it is their apparent contention that the use of the badge by the school has not been a use of a trade mark, but that the use of the same badge by the Wylies is, or will be, a trade mark use.

Section 58

Section 58 of the Act provides:
58 Applicant not owner of trade mark
The registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.
Note: For applicant see section 6.
Ownership of a trade mark in Australia is established by either the use of a sign as a trade mark or by the filing of an application to register a trade mark, whichever is the earlier. In competing claims arising from use, the first user of the trade mark in Australia is its owner: PB Foods Ltd v Malanda Dairy Foods Ltd [1999] FCA 1602.
In Inre Hicks' Case (1897) 22 VLR 636, Holroyd J said that ownership can be established if the goods involved are the ‘same kind of thing’. And in Carnival Cruise Lines Inc. v. Sitmar Cruises Limited 31 IPR 375 at paragraph 62, Gummow J., discussing The Shell Company of Australia Limited v Rohm and Haas Company (1949) 78 CLR 601 said:
When the decision is understood in this way, it does not supply any general authority for the proposition that in the case of disputed claims to proprietorship under the present statute anything less than substantial identity between the two marks will suffice. The phrase "substantially identical" as it appears in s. 62 (which is concerned with infringement) was discussed by Windeyer J in The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407 at 414. It requires a total impression of similarity to emerge from a comparison between the two marks. In a real sense a claim to proprietorship of the one extends to the other. But to go beyond this is, in my view, not possible.
It follows that, if an opponent can show earlier common law use of a substantially identical trade mark to that which it opposes in relation to ‘the same kind of thing’, it may displace an applicant’s claims to statutory ownership of a trade mark.
This common law use must be use of a trade mark in Australia: Moorgate Tobacco Ltd v Philip Morris Ltd (No 2) (1984) 59 ALJR 77.
Thus, as the badge of the school and the opposed trade mark are identical, and the goods are the same goods, questions to be addressed are:
·If the school badge has been applied to clothing since 1922, has this been trade mark use? and, if so,
·Were the applicants the owners of the trade mark?
Some guidance as to trade mark usage might be gained through consideration of the statutory definition of a trade mark in section 17 of the Act:
17 What is a trade mark?
A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.
Note: For sign see section 6.
Section 6 provides, inter alia,
sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.
The opponent’s badge falls within the definition of a ‘sign’.
The definition of a ‘trade mark’ reflects the concept that a trade mark functions to indicate a connection, in the course of trade, between the owner of the trade mark and the goods or services to which it is applied and serves to distinguish those goods from or services from goods or services dealt with or provided by other traders.[1] A trade mark thus acts as an indication of the ultimate origin of the goods or services in relation to which it is used.
1. [1] The definition of a trade mark in the superceded Trade Marks Act 1955 says that a trade marks is:
… a mark used or proposed to be used in relation to goods or services for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the goods or services and a person who has the right, either as proprietor or as registered user, to use the mark, whether with or without an indication of the identity of that person;
School uniforms are bought by the parents of school children. The evidence shows that the parents receive a ‘uniform list’; from the school in which the children have enrolled. The items on the list are quite detailed and are, more frequently than not, specific to the school. The use of school badges in relation to educational services, is quite obviously a trade mark use: it distinguishes those educational services from the educational services dealt with or provided by others.
But the applicant’s apparent position is that either the opponent has not used the badge as a trade mark in relation to clothing or that the use of the badge in relation to clothing is not trade mark use – in much the same way, I would assume, that the use of the words CHILL OUT were found not a use of a trade mark on t-shirts in Top Heavy Pty Ltd v Killin (1996) 34 IPR 282. In Top Heavy, Lehane J posed the question thus at 286:
In the end, the question here is whether the applicant’s use of the designs incorporating the phrase “Chill Out” is use as a badge of the trade origin of its T-shirts or, in the statutory language, use to distinguish goods dealt with or provided in the course of trade by a person from goods so dealt with or provided by another person.
Without commenting on the ownership of the opposed trade mark, and adapting the subsequent reasoning of Lehane J to the circumstances before me, I think that this school badge does function as a trade mark on the clothing to which it is applied. The badge has, unlike the expression “CHILL OUT”, no task to do in acquiring a secondary meaning: it is a sign which has always been uniquely associated with the school and has not been in general usage.[2] It is a badge of which the school is the commercial author (and I distinguish here between ‘commercial authorship’ and ‘copyright’ authorship). There is no practice of embellishing school blazers or other items of school uniforms with messages or slogans in the same sense as within Top Heavy. School uniforms are not canvasses for designers or advertisers to place messages to the world at large.
[2] See also Mark Foys Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 at 205 – the trade mark “Tub Happy’ was not a term in general use.
Further, as I have observed above, the applicants have implicitly stated their belief that the badge is a trade mark and is capable of functioning as such by filing application to register it. If the badge will function as a trade mark on behalf of the applicant on school uniforms, it would be inequitable to find that the use of the badge by anyone else on the same goods is not use of a trade mark and accordingly I will treat all uses of the school badge as being trade mark use.
I turn now to the issue of ownership of this trade mark. An initial observation must be that the evidence shows that the applicants were by no means the first to use the trade mark on clothing and that whoever the owner is, it is not them.
Both logic and the Act dictate that the person who exercises ultimate control of the use of the trade mark is the owner of the trade mark. It is well established that the owner of a trade mark (whether the trade mark is, or is not, registered) may authorise the use of the trade mark by another person.
Section 8 provides:
8 Definitions of authorised user and authorised use
(1)         A person is an authorised user of a trade mark if the person uses the trade mark in relation to goods or services under the control of the owner of the trade mark.
(2)         The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark.
(3)         If the owner of a trade mark exercises quality control over goods or services:
(a)         dealt with or provided in the course of trade by another person; and
(b)         in relation to which the trade mark is used;
the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner.
In Pioneer Electronic Corp v Registrar of Trade Marks (1977) 137 CLR 670 at 683: Aickin J stated at 683:
“the essential requirement for the maintenance of the validity of a trade mark is that it must indicate a connection in the course of trade with the registered proprietor, even though the connection may be slight, such as selection or quality control or control of a user in a sense in which a parent company controls a subsidiary”. [Emphasis added]
It thus appears to me that a positive indication of whether the opposed sign was used (and hence is owned) by the opponent may be gained by considering whether it exercised control over the use of the trade mark in relation to the blazers, school caps, sports clothing and so forth to which it was affixed. Or, restating the foregoing from a slightly different perspective: as the sign is a trade mark, the competing claims to the ownership can be assessed by gauging who controlled the type, style and colour of the clothing to which it has been historically affixed.
While it would seem probable that the opponent has not manufactured clothing, it is clear from the evidence that the use of the trade mark on uniforms has been under the aegis and control of the opponent. It is also clear from the evidence that the opponent has set the standards as far as the form and colours of the trade mark and also the quality, colour, style and type of school uniform to which it is applied. The opponent has been responsible for the addition or deletion of items from the uniform range. If the opponent ceased to be, the uniforms on which the trade mark is used would also, presumably, disappear from the market. It has been the opponent who, in terms of the quote from Pioneer, above, has selected the goods and dictated their quality.
Accordingly, the various traders (Gowings, David Jones, Grace Brothers, Evercraft and the applicants) who have sold uniforms bearing the opponent’s trade mark should be taken to have been authorised users of the trade mark as their use of the trade mark meets the definition in section 8(3) of the Act, above.
As I have observed, the opponent was the ultimate arbiter of the colour and quality of the goods, the range of the goods, the materials out of which they are to be made, the appearance of the trade mark and how or where it was to be physically applied to the goods.
Accordingly, although the applicants have used the opposed trade mark, this use should be taken to be an authorised use of the opponent’s trade mark.
Thus, the opponent has shown that it has had use of an identical trade mark in relation to the same kind of thing before the priority date of the opposed application; and, indeed, the use that the applicant made of the trade mark between the late 1970s and 2002 was use that accrues to the opponent and should in itself have been enough to establish the opposition: Settef v. Riv-Oland Marble Co (Vic) Pty Ltd .(1986) 10 IPR 402. The opponent’s position is strengthened by its use of the trade mark on uniforms (which may include the use of the trade mark by other authorised users under the opponent’s control) since 1922 (and well before any authorised use by the applicants) in relation to the same kind of thing as the goods for which the applicant seeks registration.
The opponent has established its opposition under section 58 of the Act.
I will also decide this matter in terms of section 42 of the Act.

Section 42

Section 42 provides:
42 Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
(a) the trade mark contains or consists of scandalous matter; or
(b) its use would be contrary to law.
Here, the opponent alleges that the use of the trade mark by the applicants would be contrary to law under the Copyright Act 1968.
In Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683 (8 June 2001) Madgwick J said, at [26] and[28]:
[I]n my opinion the fact that the existence of any contrariety to law is to be exercised in some circumstances by an administrative body and, in other circumstances, by a judicial body does not mean that the phrase "if its use would be contrary to law" should have an ambulatory meaning, depending upon what kind of tribunal is to apply it. Nor can any reticence on the part of an administrative decision-maker to express an opinion on a matter of law be encouraged. The idea that "contrary to law" in the context of judicial proceedings means contrary to all laws, whilst in the context of proceedings before the Registrar it means contrary to laws which are easy for the Registrar to determine or which are "clear cut", is not sustainable.
I acknowledge the claim made by counsel for the Registrar that such an approach requires the Registrar to look at questions of law outside his or her expertise and that this can be difficult and may place a large and onerous responsibility upon the Registrar. However, the Registrar has the comfort that the criterion is that the use "would" not "could" be contrary to law. Further, there is no reason why the Registrar could not seek legal advice before forming his/her opinion. It should also be noted that what is required is that the Registrar form a view as to whether the use of a trade mark would be contrary to law. Such opinion does not have a similar effect to say, a judicial conclusion of law as to breach of copyright in copyright proceedings; the effect is limited to the refusal of registration. In any case, an appeal de novo lies from the Registrar's decision to this Court where any error of the Registrar may be corrected.

Advantage was a matter that concerned copyright and I adopt and paraphrase Madgwick J’s words, below, in the application of the principles to this matter.
Section 32(1) of the Copyright Act provides that "copyright subsists in an original literary, dramatic, musical or artistic work that is unpublished and of which the author was a qualified person at the time when the work was made". A qualified person is defined in s 32(4) as an Australian citizen, an Australian protected person or a person resident in Australia. The creator of the artistic work in the opposed trade mark, the artist Lloyd Rees, was a qualified person since he was resident in Australia when he created the artistic work.
It does not appear to be disputed by the applicant that the school badge is an original artistic work and that the opposed trade mark comprises the same artistic work as that created by Lloyd Rees.
Under subsection 33(2) of the Copyright Act, copyright continues to subsist in an artistic work until the expiration of 50 years after the expiration of the calendar year in which the author of the work died. As the artist, Lloyd Rees, died in 1988, copyright resides in the artistic work of the school badge until expiration of the year 2038.
Absent evidence of a copyright assignment, copyright in the school badge is owned by the Estate of the late Lloyd Rees.
It is immaterial to this decision whether Mr Rees or his Estate expressly or by implication granted a license to the opponent to use his artistic work. The point is, rather, that the applicants have not evidenced grant of a license to them by the Estate to use the artistic work.
An argument that the opponent licensed the applicant to use the artistic work must fail since the opponent was, prima facie, not the owner of the copyright. Moreover, if the opponent is, by implication, a licensee or beneficial owner[3] of the copyright, any subsidiary license granted by implication to the applicant was revoked by the cease and desist letter from the opponent’s solicitors of 18 January 2002.
[3] Griggs Group Ltd & Ors v Evans & Ors ([2003] EWHC 2914
Section 36 of the Copyright Act provides that the copyright in an artistic work is infringed if a person, who is not the owner of the copyright, does any act comprised in the copyright without the license of the owner. Section 14 deems acts done in relation to a substantial part of the work to be done in relation to the whole of the work.
If the applicant used the trade mark, it would be an unlicensed user of the copyright. Accordingly, use of the trade mark by the applicant would infringe the copyright in the artistic work owned by the Estate of Lloyd Rees.
The use of the trade mark would thus be contrary to law and the opponent has established its grounds under section 42 of the Act.

Decision

Section 55 of the Act provides:
55. 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.
I refuse to register application 902222.

Costs

The applicants’ solicitors, in their written submissions, state that the opponent’s application for its costs is “totally opposed as it is a decision of [the opponent] to seek a listing for hearing in person”.
Schedule 8 to the Trade Mark Regulations 1995 does include counsel fees; however, in relation to these proceedings, the opponent has also incurred costs which include filing the Notice of Opposition, filing evidence in support, considering the evidence in answer and preparing for the hearing. It is not clear on what basis the applicant totally opposes these costs which usually follow the event unless there is some form of blameworthy or oppressive conduct on behalf of the successful party. There is nothing blameworthy or oppressive in seeking to be heard, per se.
Section 202 of the Act provides:
202 Registrar’s powers
The Registrar may, for the purposes of this Act:
(a)         summon witnesses; and
(b)         receive written or oral evidence on oath or affirmation; and
(c)          require the production of documents or articles; and
(d)award costs against a party to proceedings brought before the Registrar; and
(e)         notify, as he or she considers fit, any person of any matter that, in his or her opinion, should be brought to the person’s notice.
Note: For the awarding of costs see section 221.
Section 221 of the Act provides:
221 Costs awarded by Registrar
(1)         The Registrar may award costs in respect of the matters, and in the amounts, provided for in the regulations against any party to proceedings brought before him or her.
(2)         A party desiring to obtain costs must apply to the Registrar in accordance with the regulations.
(3)         If a party is ordered to pay the costs of another party, the costs may be recovered in a court of competent jurisdiction as a debt due by the first party to the other party.
By their wording, sections 202 and 221 make it clear that an award of costs is a discretionary power of the Registrar. In considering the exercise of my discretion, I am mindful that section 54 guarantees parties to proceedings under section 52 a right to be heard. It provides:
54 Opposition proceedings
(1) The Registrar must give to the opponent and to the applicant an opportunity of being heard on the opposition.
Absent some form of blameworthy or oppressive conduct, it appears to me to be procedurally unfair and inequitable to effectively penalise a party to proceedings by not awarding them all of their costs when they have exercised their statutory right to appear and be heard in person and have been successful in the proceedings. I am unaware of any precedent for such an approach in this or any other forum, nor is any suggested by the applicants’ solicitors.
Such an approach would have a tendency in proceedings other than this one to give official succor to those people who attempt to misappropriate trade marks or file spurious oppositions by defraying those peoples’ costs at the expense of the rightful owners of trade marks. Such an approach is not, therefore, in the public interest.
I also observe that the applicants have persisted with their application which the opponent was obviously always going to take seriously: it has been open to the applicants to seek settlement or to withdraw the application to mitigate their costs. It would seem that if the applicants registered the trade mark, the effects would potentially be most deleterious to the opponent’s interests. The applicants could, for example, hypothetically dictate what the uniform of the school should be and, more extraordinarily, the use of the trade mark by the school should prima facie infringe any registration of the trade mark by the Wylies. Other obvious outcomes if the decision had been adverse to the opponent are that it might have had to either ‘re-badge’ itself or alternatively undertake appeal proceedings – both costly ventures. Under such circumstances, it is only natural that the opponent would brief experienced counsel to represent it in person at a hearing and this is not a disproportionate action in relation to the gravity of the proceedings.
Costs may follow the event and I order costs against the applicants at the official scale.

Ian Thompson

Hearing Officer

Trade Marks Hearings

30 August 2004

[2004] ATMO 49

30 August 2004

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