Danterr Pty Ltd v Concrete Jointing Systems (Malaysia) Sdn Bhd

[2023] ATMO 27

TRADE MARKS ACT 1995

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

Re:Opposition by Danterr Pty Ltd to registration of trade mark application number 2129541 (class 17) – CJS CONCRETE JOINTING SYSTEMS with device - in the name of Concrete Jointing Systems (Malaysia) Sdn Bhd

Delegate:

Adrian Richards

Representation:

Opponent: Melissa Marcus of Counsel instructed by Quick Off The Mark

Applicant: Wen Wu of Counsel instructed by Alder IP

Decision:

27 ATMO 2023

Trade Marks Act 1995 (Cth) – opposition under section 52 – ground of opposition under section 58 considered – purported assignment of a trade mark at common law without goodwill – whether assignment effective at execution – whether assignment perfected by application for registration of the trade mark – ground of opposition not established – trade mark to proceed to registration

Background

1. This decision with reasons considers the outer bounds of the present law with respect to an assignment of an unregistered trade mark without the associated goodwill. The discussion takes place in relation to an opposition to registration of a trade mark, some details of which are set out below:

   Trade mark:   (‘Trade Mark’)

   Application number:      2129541

   Priority date:  19 October 2020 (‘Relevant Date’)

2. An application for registration of the Trade Mark was filed with this office on 19 October 2020 by Corkjoint (Malaysia) Sdn Bhd (‘Corkjoint’). This office examined the Trade Mark and later advertised its acceptance on 20 March 2021. On 13 May 2021 Danterr Pty Ltd (‘Opponent’) filed a notice of intention to oppose registration of the Trade Mark, followed by its statement of grounds and particulars on 19 May 2021. This office sent each of those documents to Corkjoint, who responded by filing a notice of intention to defend the Trade Mark against opposition on 29 June 2021.

3. Both parties then filed their evidence in accordance with the schedule set out in the legislation.[1] Details of that evidence are reproduced under the relevant heading below.

   [1] Trade Marks Regulations 1995 (Cth) reg 5.14 (‘Regulations’). All references herein to regulations are to the Regulations.

4. Once the evidence had been filed, this office informed the parties that the opposition was ready for hearing and invited the parties to request to be heard. On 21 March 2022 Corkjoint filed a request to be heard on the substantive opposition. Acknowledgement of this request issued from this office to both parties on 23 March 2022 but no hearing date was set at that time.

5. This office recorded an assignment of the Trade Mark in favour of Concrete Jointing Systems (Malaysia) Sdn Bhd (‘CJS’) on 28 April 2022. The supporting document for this was a deed made on 14 April 2022 purporting to assign the Trade Mark from Corkjoint to CJS.

6. On 21 July 2022 the Opponent advised this office that it wanted to attend the hearing of this opposition. This office then scheduled the hearing for 1 December 2022.

7. I heard the parties by videoconference on 1 December 2022 in my role as delegate of the Registrar of Trade Marks. Providing submissions for CJS was Wen Wu of Counsel, accompanied by Anthony Alder and Helen Deng of Alder IP. Representing the Opponent was Melissa Marcus of Counsel, who was accompanied by Jacqui Pryor and Catherine Macneil from Quick Off The Mark.

Evidence

1. The evidence filed in these proceedings was as follows:

   Evidence in support

   Declaration by Terry McWhirter, Managing Director of the Opponent, made 29 September 2021 with Annexures TM1 to TM10, with TM2, TM9 and TM10 marked as confidential

   Evidence in answer

   Declaration by James Gately, Director of both Corkjoint and CJS, made 5 January 2022 with Annexures JHG-1 to JHG-8, of which JHG-4 to JHG-7 are marked confidential

   Evidence in reply

   Declaration by Terry McWhirter made 3 March 2022

2. CJS filed a request to amend its evidence in answer on 8 November 2022. On 15 November 2022 I indicated to the parties my intention to make the amendment. No objection was received and so the amendment was made on 23 November 2022. The effect of that amendment was to replace confidential Annexure JHG-6 from the Gately declaration. The replacement annexure has entered the record as confidential Annexure HD-1 to the declaration of Honghua (Helen) Deng, registered trade mark attorney at Alder IP Pty Ltd, made 8 November 2022.

3. While marked confidential, the contents of Annexure HD-1 is of central relevance to the dispute between the parties. In my discussion below I have had to briefly describe the document and its purported effect, in line with my obligations in providing these reasons to ‘set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based.’[2] In the same vein I have also characterised other aspects of the evidence in support and evidence in answer marked confidential, particularly where it demonstrates use of the Trade Mark in Australia.

   [2] Acts Interpretation Act 1901 (Cth) s 25D.

Grounds and onus

1. The statement of grounds and particulars filed by the Opponent invoked three grounds of opposition – ss 44, 58A and 58 of the Trade Marks Act 1995 (Cth) (‘Act’).[3] Sections 44 and 58A, when read together, essentially allege that the Opponent was the earlier user (or applicant) for a deceptively similar trade mark. Both of these grounds have now been abandoned by the Opponent, and I take them not to have been established in these proceedings. The sole remaining ground is s 58, which I discuss below.

   [3] Except where otherwise specified, reference to a section in these reasons is a reference to a section of the Act.

2. The Opponent bears the onus[4] of establishing, on the balance of probabilities,[5] that s 58 applies in this case. The rights of the parties in this respect are to be determined as they stood at the Relevant Date.[6]

   [4] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).

   [5] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ).

   [6] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82, [4] (Kitto J), affd Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82 (Dixon CJ, McTiernan, Webb, Fullagar and Taylor JJ).

Section 58

1. This ground is expressed in the Act in simple terms: ‘[t]he registration of a trade mark may be opposed on the ground that the applicant is not the owner of the trade mark.’ There are two ways to establish ownership in a trade mark, one of which is relevant to the present facts.[7] The first person to think of a trade mark and start using it is, at common law, the owner of that trade mark. Once ownership is established, that ownership can be passed to a new person, such as by assignment or transmission.

   [7] Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd (2017) 251 FCR 379, [19] (Greenwood, Jagot and Beach JJ).

Finding the owner

1. The Opponent’s case was first pleaded in the statement of grounds and particulars as ‘at least one other person had used’ the Trade Mark before the Relevant Date. The evidence in support then alleged that two persons may be the original owner of the Trade Mark: the Opponent, and CJS. In its outline of submissions and at the hearing, the Opponent made clear that it no longer asserts it had used the Trade Mark earlier than anyone else. Instead, it relies on the notion that CJS was first user of the Trade Mark in Australia. CJS, the Opponent notes, was not the applicant at the Relevant Date. This application was filed in the name of Corkjoint. CJS agrees that it was first user, and therefore first owner of the Trade Mark, but says that it had already assigned the Trade Mark to Corkjoint before the Relevant Date.

2. The instrument that purports to assign the Trade Mark is in evidence. It is a written agreement made on 1 August 2019 (‘Agreement’). The Agreement purports to assign the Trade Mark from CJS to Corkjoint, and for Corkjoint to pay valuable consideration to CJS in return. The aspect of the Agreement which is the source of the entire dispute between the parties to this opposition is that it defines the Trade Mark as ‘excluding goodwill’. Incidentally, the Agreement also purports to assign copyright in the Trade Mark to Corkjoint. No issue has been made of the purported transfer of copyright, so I assume it is effective.

3. At the time the Agreement was made, ownership in the Trade Mark had been established in common law. That is, CJS started using the Trade Mark in Australia around 2015. There is no evidence nor submission that registration of the Trade Mark had ever been applied for with this office before the present application. That is, on the day of the Agreement, the Trade Mark was wholly subject to the common law, not to the Act. There are several differences between trade marks at common law and trade marks that are subject to the Act, one of which is of central relevance here. At common law, no trade mark can be assigned without the goodwill of the business from which it came.[8] Under the Act, on the other hand, a trade mark can be assigned ‘with or without’ that goodwill.[9]

   [8] Kraft Foods Group Brands LLC v Bega Cheese Ltd (2020) 377 ALR 387 (Foster, Moshinsky and O’Bryan JJ), [128] 420-1.

   [9] Trade Marks Act 1995 (Cth) s 106(3).

4. The Opponent says that since the Agreement incorrectly purported to assign a common law trade mark without its goodwill, the attempt was ineffective. Thus the Opponent submits title to the Trade Mark remained with CJS up to the Relevant Date. The Applicant says that the Agreement was not effective immediately, but that it was perfected by the act of seeking registration of the Trade Mark with this office.

Effectiveness of a purported assignment prior to filing

1. The entire dispute thus boils down to a single question which appears not to have been directly asked nor answered in the courts or this office: is the purported assignment of a common law trade mark without goodwill perfected at the time an application for registration of that trade mark is filed with this office? The logical starting point for this question is the legislation. Parts 10 of each of the Act and Regulations provide much of the framework for the assignment of trade marks that are either registered or at least have been applied for under that legislation. That said, the entire part 10 of the Regulations and all but one section of part 10 of the Act are concerned with requirements and procedure surrounding the recordal of an assignment, which are not directly relevant to the present issue. However, the Opponent did refer to some of those recordal provisions in relation to its preferred interpretation of the provision that is central to the present matter, s 106. That section is reproduced below:

   106  Assignment etc. of trade mark

   (1)  A registered trade mark, or a trade mark whose registration is being sought, may be assigned or transmitted in accordance with this section.

   (2)  The assignment or transmission may be partial, that is, it may apply to some only of the goods and/or services in respect of which registration is sought or the trade mark is registered, but it may not be partial in relation to the use of a trade mark in a particular area.

   (3)  The assignment or transmission may be with or without the goodwill of the business concerned in the relevant goods and/or services.

   Note:          For assignment and transmission see section 6.

1. The parties disagree as to the implication of the words ‘a trade mark whose registration is being sought’ appearing in subsection (1). The Opponent says that a mark must have already been applied for at the time assignment is first attempted, while CJS says that assignment can be started before the trade mark is filed under the Act and (provided any other conditions are met) at the instant the trade mark is filed under the Act, legal title transfers. Counsel for both parties took me through the text of the Act in support of their preferred reading. Mr Wu also put forward the views of certain academics in support of CJS’ position. Having considered all of those I am left in the unfortunate position of finding that both interpretations appear to be compatible with the plain meaning of the terms of subsection (1). This wording is framed in the present tense, and in both alternate interpretations registration of the trade mark is being sought—the difference lies in whether the seeking of registration began before or after the purported assignment sans goodwill. It is therefore necessary for me to consider which best achieves the purpose or object of the Act.[10] I ultimately do so below having reference to materials that inform its development.[11] The preamble to the Act includes a broad mention of its purpose, that it provides for the registration of trade marks, sets out and protects the rights deriving from registration. This sheds little light on the situation. It is therefore helpful to turn to the history of this provision to understand the purpose behind the current provision.

   [10] Acts Interpretation Act 1901 (Cth) s 15AA.

   [11] Ibid s 15AB.

The path to section 106

1. The common law rule came first. It derives from two principles.[12] Firstly, at common law a trade mark is not property per se. It is merely an aspect of the property that is the goodwill in a business. Secondly, assignment of a common law trade mark as separate to the goodwill would necessarily result in deception of the purchasing public—a trade mark ‘ought not to tell a lie about the goods’.[13]

   [12] GE Trade Mark [1973] RPC 297, 325-6 (Lord Diplock).

   [13] Ibid 326.

2. The first Australian legislation in this field replicated the common law position—trade marks under that law could only be assigned with goodwill.[14] Impetus for change began with a strict application of the rule against assignments without goodwill in Re Trade Mark No 437870 of John Sinclair Ltd.[15] In that judgment, Carreras Ltd had established use of, and registered, the trade mark THE TATLER for tobacco products. Carreras Ltd acquired control of John Sinclair Ltd and assigned it the registered trade mark with the associated goodwill. John Sinclair Ltd began marketing THE TATLER cigarettes, but Carreras Ltd continued to manufacture them on John Sinclair Ltd’s behalf. This was insufficient in the eyes of the court. For the purported assignment to be effective the business and goodwill associated with manufacturing THE TATLER cigarettes ought to have been included in the transfer of title. This did not reflect reality in 1930. Many arrangements akin to the manufacture and marketing of THE TATLER cigarettes were already in place in all areas of commerce. In the United Kingdom, the British Board of Trade Committee reported that while it may once have been true that a trade mark derived its value from the reputation of a business, this was no longer the case:

   Under modern conditions of trading, the tendency is for the business to be built up around the trade mark, and the commercial view to-day is that the goodwill of a business frequently is inherent in the trade mark itself. The statute and common law on the subject are based largely upon obsolete conditions and take no account of this change in view.[16]

In Australia, the Knowles Committee endorsed that finding adding that: ‘[i]t seems essential to free commerce from the unfair operation of an obsolete rule, the existence of which has been a source of embarrassment for traders.’[17] This resulted in a 1948 amendment to the law introducing the ability to assign a registered trade mark without goodwill.[18]

[14] Trade Marks Act 1905 (Cth) s 58.

[15] [1932] RPC 123 (Lord Hanworth MR, Lawrence and Romer LJJ).

[16] Departmental Committee on Law and Practice relating to Trade Marks (Final Report, 1934).

[17] Report of the Committee Appointed to Consider What Alterations Are Desirable in the Trade Marks Law of the Commonwealth (Final Report, 1939) 22.

[18] Trade Marks Act 1948 (Cth) s 7.

1. The Trade Marks Act 1955 (Cth) adopted the same position as in 1948 but with slightly different wording. This issue relating to the assignment of registered marks thus was apparently settled. However, that legislation neglected to deal with trade marks still in the process of being registered. A complex practice grew up under that regime:

   Where the mark has been in use, the applicant may of course have rights at common law capable of assignment with the goodwill of the business. However, it is doubtful whether an applicant’s rights under his application are in the nature of property. But it is possible to assign as future property the benefit of an application and the registration to issue thereon. An application for recordal of such an assignment will be received by the Registrar prior to registration of the trade mark, and although the registration will issue nonetheless in the name of the assignor, the transfer of title will be registered immediately thereafter.[19]

   [19] D R Shanahan, Australian Trade Mark Law and Practice (Law Book Company, 1^st ed, 1982) 235.

2. The Working Party to Review the Trade Marks Legislation in 1992 considered this practice out of step with reality:

   current commercial practices require further adjustment of the provisions governing assignment of trade marks, to enable assignments and transmissions in the title in trade marks, which have been effected in the marketplace, to be entered in the Trade Marks Office records at the earliest opportunity. It is considered highly desirable that these records be an accurate reflection of the real business situation.[20]

This report went on to make the following recommendations:

28A.Provision should be made for the assignment of the right to apply for registration of a mark before application for its registration has been made and for the assignment of applications once made.

28B.Assignments of registered trade marks, of applications for registration of trade marks, and of the right to apply for registration, may be made with or without goodwill…[21]

[20] Recommended Changes to the Australian Trade Marks Legislation (Final Report, 1992) 84.

[21] Ibid.

1. The resultant law is the current s 106. Notably the current wording permits the assignment of a trade mark that has been applied for under the Act, whether that be with goodwill or without it. The section makes no provision for an application for registration to be assigned, only for assignment of the trade mark referenced within it. This is likely to be reflective of an intention to maintain that the application is not property, but the trade mark is.[22] At first glance, s 106 appears not to directly deal with the Working Party’s recommendation 28A that the right to apply for registration of a mark be assignable even before it is applied for. But the reason for this apparent omission appears in s 230, which makes plain that the Act does not seek to modify the common law of passing off in relation to the present issue. Indeed, it would not be trivial for drafters of the Act to attempt to regulate what can happen to a trade mark before it is subject to that legislation. This apparent rejection of an aspect of the recommendation is suggestive of avoiding further intervention into the common law rather than expressing by omission any intentions around the assignment of a right to apply for registration.

   [22] See, eg, SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd (No 6) [2008] FCA 710, [32] (Edmonds J).

Conclusions on section 58

1. The attitude in reforms of this field has consistently been that the legislation ought to reflect the practice of traders and the understanding of consumers. Those practices and attitudes had shifted as early as 1930 from the reputation of a specific business in its own goods or services to the reputation of a registered trade mark in relation to which those goods or services are offered. This focus on trade marks over businesses as the repository of reputation and goodwill over the ensuing decades (and clearly well established by the time of the 1992 report), was by 1995 quite complete. The present s 106 was drafted with this new commercial reality in mind, and as such I am satisfied it was drafted with an intention to facilitate the transfer of trade marks from one person to another, with or without goodwill, provided that trade mark is subject to the Act. I also briefly note the principle that the Act provides ‘registration of ownership not ownership by registration’[23] is not disturbed by my findings here. The meaning of that phrase is that Australian law recognises that first use is a source of trade mark ownership, which is in contrast to some other jurisdictions who require registration (or at least application for registration) of a trade mark before a person can be accorded any rights of ownership.

   [23] Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56, [170] (Greenwood, Besanko and Katzmann JJ).

1. It is commonplace for an assignment of property to have effect from some date in future which might be set out in the agreement or by the satisfaction of a condition precedent. Here one of those conditions was the application for registration of the Trade Mark. No other mechanism for its transfer without goodwill would have been available under the law. At the Relevant Date, therefore, the owner of the Trade Mark was by the terms of the Agreement, Corkjoint. I would also add that it would be an odd position for Corkjoint to own the copyright in the Trade Mark and yet somehow not be entitled to apply for its registration. Corkjoint being the person named as applicant on the application at the Relevant Date, I find this ground of opposition is not established.

Decision and costs

1. Under s 55, having regard to the extent to which any ground of opposition has been established, I must decide to refuse or register the Trade Mark. No ground of opposition having been established, my decision is to register the Trade Mark. I am also required to consider whether any conditions or limitations should be imposed. I note that an endorsement relating to the evidence provisions of s 44 were added to this application during examination. I have not been asked to consider this issue, so that endorsement is best left undisturbed.

2. The Trade Mark may proceed to registration one month from the date of this decision with the current endorsement ‘Provisions of subsection s 44(4) and/or Reg 4.15A(5) applied’. If the Registrar is served with a notice of appeal before that time, I direct that registration shall not occur until the appeal has been withdrawn or discontinued. Otherwise the disposition of the application should be in accordance with the Court’s order or direction.

3. CJS has asked that costs be awarded. The usual practice is for costs to follow the event. I see no reason to depart from that here. I award costs against the Opponent at the scale set out in schedule 8 to the Regulations.

Adrian Richards

Hearing Officer

Delegate of the Registrar of Trade Marks

28 February 2023