Davley Building Pty Ltd v Granny Flats Australia Pty Ltd
[2016] ATMO 92
•27 October 2016
TRADE MARKS ACT 1995
DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Oppositions by Davley Building Pty Ltd to registration of trade mark application nos. 1551414 (37) and 1551417 (42) - GRANNY FLATS AUSTRALIA and Device - in the name of Granny Flats Australia Pty Ltd.
| Delegate: | Heath Wilson |
| Representation: | Opponent: David Stewart of William & Hughes Commercial and Litigation Lawyers. Applicant: Peter Whitehead of Hazan Hollander Lawyers. |
| Decision: | 2016 ATMO 92 Opposition to registrations under section 52 of the Trade Marks Act 1995 – sections 58, 60 and 42(b) considered – no grounds established – Trade Marks to proceed to registration. |
Background
This matter concerns oppositions under the Trade Marks Act 1995 (‘the Act’) to the registration of the following trade marks (‘the Trade Marks’) filed in the name of Granny Flats Australia Pty Ltd (‘the Applicant’):
| TM No. | Priority Date | Trade Mark | Specification of Services |
| 1551414 | 12.4.13 | Class 37: Building and construction services; Development of property (building and construction services); Housing development (building and construction services); Property development (building and construction services); Maintenance and repair of buildings; Installation of fittings for buildings; Development of land (construction) | |
| 1551417 | 12.4.13 | Class 42: Advisory services relating to building design; Building design services; Civil engineering (design); Design of building interiors; Design of buildings; Design planning; Design services; Design services for architecture; Designing and planning of real estate subdivisions and developments; Advisory services relating to architecture; Architecture; Engineering services relating to architecture; Landscape architecture |
The Trade Marks were examined as required under section 31 of the Act and advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 1 August 2013. A Notice of Intention to Oppose followed by a Statement of Grounds and Particulars (‘the SGP’) was filed by Davley Building Pty Ltd trading as GrannyFlatsWA.com (‘the Opponent’).
The SGP particularized the grounds of opposition under sections 60, 42(b) and 58 of the Act. A Notice of Intention to Defend was subsequently filed by the Applicant, followed by the evidence stages of the oppositions. The evidence filed comprises:
Evidence in Support
Statutory declaration of Michael John Nicholls (Director of the Opponent) made 19 April 2014 with annexures MN-1 to MN-93 (‘Nicholls 1’).
Declaration of Evan Cunningham-Dunlop (Managing Director of Living Online) made 22 April 2014 with annexure ECD-1 (‘Cunningham-Dunlop’).
Evidence in Answer
Declaration of Cid Daher (General Manager of the Applicant) made 6 November 2014 with annexures CD-1 to CD-10 (‘Daher’).
Evidence in Reply
Declaration of Michael John Nicholls made 28 February 2016 with annexures MJN-94 and MJN-95 (‘Nicholls 2’).
As a delegate of the Registrar of Trade Marks I heard the oppositions in Canberra on 25 August 2016. Peter Whitehead of Hazan Hollander (Lawyers) made oral submissions via teleconference on behalf of the Applicant and David Stewart of Williams and Hughes (Lawyers) appeared in person on behalf of the Opponent. Mr Nicholls of the Opponent was also in attendance. The Opponent bears the onus of establishing at least one of the grounds of opposition on the civil standard of the balance of probabilities.[1] The relevant date at which the rights of the parties are to be determined is the date of the trade mark application[2], which in these matters is 12 April 2013 (‘the relevant date’).
[1] Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133] affirming the approach of Gyles J in Pfizer Products Inc. v Karam [2006] FCA 1663, [26].
[2] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82; (1954) 91 CLR 592, [595].
The Opponent has, at least since the evidence in reply stage, made it clear that the oppositions only concerned the registration of the Trade Marks as they related to the Western Australian market. To that end, Mr Stewart argued that should a ground of opposition be established, the Trade Marks should be excluded from use within Western Australia.
The application of a geographical limitation to the registration of a trade mark can form part of the decision to register the Trade Marks under section 55(1)(b). Section 6 of the Act provides that ‘limitations’ are limitations on the exclusive right to use a trade mark and include use confined to a territorial area within Australia. The application of a territorial restriction is not dependent on the extent of the use the Applicant has undertaken to date but rather the extent to which an Opponent can establish one of the grounds of opposition. Mr Stewart argued that the Opponent need only establish the section 60 ground of opposition in relation to a certain geographical area (Western Australia) in order to succeed. I note that a similar approach to section 60 has been applied in previous decisions of this office.[3] At the hearing, that ground of opposition received the most attention, and I will address it first.
Discussion
[3] Watermark Restaurant Pty Ltd v The Watermark Hotel Group Pty Ltd [2002] ATMO 43; Water Corporation v Watercorp Pty Ltd [2003] ATMO 23; Wyndella Pty Ltd v Sparkes-Carroll, C.Baffsky [2007] ATMO 79.
Section 60
Section 60 of the Act provides:
Trade mark similar to trade mark that has acquired a reputation in Australia
The registration of a trade mark in respect of particular goods or services may be opposed on the ground that:
(a)another trade mark had, before the priority date for the registration of the first‑mentioned trade mark in respect of those goods or services, acquired a reputation in Australia; and
(b)because of the reputation of that other trade mark, the use of the first‑mentioned trade mark would be likely to deceive or cause confusion.
Note:For priority date see section 12.
Section 60 has two major elements that must be satisfied for it to be established. The Opponent must firstly demonstrate the existence of a reputation of its trade mark(s) before the relevant date. The reputation must be such that a ‘significant’ or ‘substantial’[4] number of consumers within the relevant trade would have an awareness of the trade mark(s). The assessment of what is ‘significant or substantial’ must be properly and sensibly applied[5] and may depend on the specialised nature of the relevant market.[6]
[4] See Renaud Cointreau & Cie v Cordon Bleu International Ltee (2001) 52 IPR 382; [2001] FCA 1170 and ConAgra Inc. v McCain Foods (Aust) Pty Ltd [1992] FCA 159; (1992) 23 IPR 193.
[5] “Bali” Trade Mark [1969] RPC 472, [496].
[6] Le Cordon Bleu BV v Cordon Bleu International Ltee (2001) 50 IPR 1; [2000] FCA 1587, [20].
For the second limb of the test, the nature and extent of the demonstrated reputation must be such that the use of the Trade Marks would be likely to deceive or cause confusion. This consideration is conjectural and does not require actual instances of deception or confusion to be demonstrated, but where such instances have been provided, they will be given great weight.[7]
[7] See Australian Woollen Mills Ltd v F. S. Walton and Company Ltd [1937] HCA 51; (1937) 58 CLR 641.
Submissions were made by both parties at the hearing regarding decisions of this office where an opponent had established the requisite level of reputation and succeeded in those oppositions. There are, no doubt, decisions where large multinational corporations have been successful under section 60 but that fact in no way precludes a “husband and wife team” (as the Opponent is described in the evidence) from demonstrating the requisite reputation under section 60.
While there must be some form of similarity between the trade marks under consideration, it is not a requirement under section 60 for the trade marks to be deceptively similar.[8] Neither do the services of the Trade Marks and the goods/services in which the reputation of the other trade mark(s) resides have to be similar or closely related. However, where these similarities are present, the likelihood of deception or confusion arising is that much greater.
[8] As ‘deceptively similar’ is defined under section 10 of the Act.
As mentioned, the first consideration before me is whether (as at 12 April 2013) the Opponent’s trade mark(s) (as defined below) were known amongst a significant or substantial number of consumers in Western Australia. This assessment turns on the nature and extent of the evidence provided.
The Opponent’s trade marks
The demonstrated reputation under section 60 must be in a trade mark, or a sign used or intended to be used to distinguish goods or services provided in the course of trade from the goods or services provided by any other person.[9] Any type of use will not suffice and a sign which, prima facie, lacks distinctiveness must firstly be shown to be performing a trade mark function.
[9] See section 17 of the Act.
The Opponent relied upon a number of trade marks in its written summary of argument including ‘GRANNY FLATS WA’; ‘GRANNYFLATSWA.COM’; and ‘GRANNYFLATSWA.COM.AU’, but at the hearing Mr Stewart focused on the following unregistered trade mark for the purposes of this ground:
(‘Opponent’s logo trade mark’)
According to Nicholls 1, annexure MN-10 to the declaration shows the Opponent’s logo trade mark appeared on the Opponent’s website at 21 March 2013 but there is evidence of use of this trade mark from around mid-2012.
The use of the Opponent’s domain name address (‘GrannyFlatsWA.com’) in the evidence does not, on the face of it, distinguish the Opponent’s services. While a trade mark may possess a dual function, the context of trade mark use is all-important. As was found in Sports Warehouse, Inc. v Fry Consulting Pty Ltd:
It is not suggested that mere registration of a domain name can amount to use of the mark. More must be shown. Plainly enough, not all domain names will be used as a sign to distinguish the goods or services of one trader in the course of trade from the goods or services of another trader. Sports Warehouse is correct in its submission that that whether or not a domain name is used as a trade mark will depend on the context in which the domain name is used. In this case, the domain name is more than an address for a website; the domain name is also a sign for the applicant’s online retaining service available at the website.[10]
[10] [2010] FCA 664, [153].
The Opponent’s business name is ‘GrannyFlatsWA.com’. The business name was registered with the Australian Securities and Investments Commission (‘ASIC’) on 27 May 2008 and also emphasizes the abovementioned domain name address. However, the existence of a business name registration is not evidence of use let alone evidence of reputation in a trade mark. Despite Mr Stewart’s argument that if a business name is not used in the course of trade it may be cancelled this does not mean that the registration itself constitutes trade mark use. For the avoidance of doubt, Australian legal authority makes this proposition clear.[11] As with domain names, whether the business name is being used as a trade mark will similarly depend on the context of that use.
[11] See, for example, Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 554 [308].
In Nicholls 1, Mr Nicholls provided an explanation for the Opponent’s use of ‘Grannyflatswa.com’ as a business name:
I recall that many people - certainly every marketing person I met at the time – were of the opinion that “grannyflatswa.com” was not an appealing name from a marketing perspective because “granny flats” was a “dirty word” – conjuring up images of unwashed and unloved grannies in old lean-tos “out the back”…
I included the “.com” in the business name as I wanted people to look up our business on the internet to look at what the Opponent had to offer.
…
I also wished to ensure that “grannyflatswa.com” was the top result on any search engine if someone in Western Australia searched for the terms “granny flats” or “granny flats Perth.”[12]
[12] Nicholls 1 [11], [13].
It is clear that the Opponent’s domain address and business name were originally created not with the aim of distinguishing the Opponent’s services from those of other traders, but was primarily to direct consumers to the Opponent’s website. In relation to the domain name element, I note that in REA Group Ltd v Real Estate 1 Ltd (‘REA Group’) Bromberg J said:
The lack of attention which may be paid to a suffix such as “.com.au” is illustrated in Architects Australia [Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139]. In that case a comparison was made between the names “Architects Australia” and “architectsaustralia.com.au”. To the suggestion that “.com.au” differentiated the two names, Chesterman J said at [21]:
The words in contest in this case are not merely similar, they are precisely the same. The extended suffix “.com.au” does not detract from this conclusion. It does no more than indicate that details of the business are to be found electronically, on the Internet.[13]
[13] REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559; (2013) 217 FCR 327 [128]; See also Sports Warehouse, Inc. v Fry Consulting Pty Ltd [2010] FCA 664 [155] – [156].
Reputation
Having made the above observations regarding context of trade mark use, I turn to particular examples within the evidence. The exhibits at MN-6 to MN-9 of Nicholls 1 are archived extracts of the Opponent’s webpages at ‘ from 17 April 2009, 29 March 2010, 3 March 2011 and 10 March 2012. They are prior to the first demonstrated use of the Opponent’s logo trade mark, and the Opponent’s business name logo appears as:
Exhibits MN-15 and MN-16 relate to the Opponent’s television advertisements from 2012 to 2013 and again show the above representation, but there are also oral references in the advertisements to ‘Granny Flats WA’. The radio advertisements and associated schedules at annexures MN-17 and MN-18 are from 2010 to 2012 and are described as radio advertisements for the Opponent’s ‘Granny Flats WA’ business. Exhibit MN-19 is a brochure from September 2009 and again uses ‘Grannyflats WA’ in the following manner:
Whether you need a home office, a music room or independent accommodation for parents or older children, Grannyflats WA, Perth’s only specialist granny flat builder, can create it for you in a matter of weeks…
Similar examples of advertisements can be seen in exhibits MN-20 to MN-69 to Nicholls 1. I find that the majority of the above examples constitute instances of trade mark use. However, given the descriptive nature of ‘Granny Flats WA’ it does not necessarily follow that such use is sufficient to establish the requisite reputation under section 60.
At the hearing Mr Whitehead was generally critical of the contents of Nicholls 1 and while he conceded there were some examples of the Opponent’s advertisements appearing in the West Australian newspapers the West Australian News, The Subiaco Post and The Sunday Times, the majority of them are only described in Nicholls 1 as having been created on a particular date. Mr Whitehead argued that this was insufficient to demonstrate whether the brochures and advertisements were distributed and available to the public. I find myself in general agreement with Mr Whitehead’s observations, especially given the Opponent bears the onus of establishing the ground.
I also find that there is repetition in some examples provided in the evidence. Exhibits MN-21 and MN-25 (for example) appear to be identical. In addition, I cannot see any material difference between exhibits MN-30, MN-32 and MN-33 which were ‘created’ within the space of a week in April 2010. While both ‘GrannyFlatsWA.com’ and ‘Granny Flats WA’ appear in these examples, I am of the view that due to the number of very similar examples ‘created’ around the same time, the Opponent bore the onus of providing some explanation concerning the distribution of those brochures.
Exhibit MN-48 appears to be earliest example of use for the Opponent’s logo trade mark. It features on an advertisement said to have been created on 3 May 2012 and that it appeared in the West Australian News. In other words, there is less than one year of use of the Opponent’s logo trade mark before the relevant date. This use features prominently on exhibits MN-48 to MN-59 which are advertisements created between July 2012 and November 2012. Once again, the declaration does not indicate how many brochures were distributed or whether the advertisements appeared in publications other than three which appeared in the West Australian News.
Numerous examples of use in Nicholls 1 are dated after the relevant date, undated or were created at the time of making the declaration. For example, advertisements and brochures bearing the Opponent’s logo trade mark in exhibits MN-11 to MN-14 and MN-60 to MN-73 were created after the relevant date. Printouts from online directories (MN-83 to MN-85) appear to be from the time of making the declaration. The Opponent’s participation at the Home Buyer and Property Investor Show in March 2014 (exhibit MN-86) also falls after the relevant date. In addition, I assume (in the absence of evidence to the contrary) that undated exhibits MN-87 to MN-93 are examples from the time of making the declaration.
I note that the Opponent’s ‘Facebook’ page was created in 2011. The 2014 extract for Nicholls 1 shows the page has received 115 ‘likes’ and that the current customer testimonials on ‘YouTube’ for the Opponent’s services have approximately 200-400 ‘views’ each.
The Opponent’s turnover figures and total expenditure on advertising and promotion are claimed as confidential in Nicholls 1. While it is true that reputation may be inferred ‘from a high volume of sales, together with substantial advertising expenditures and other promotions,’[14] in this matter, it is the abovementioned nature of the use in those advertisements and promotions which informs the consideration.
[14] McCormick & Co Inc. v McCormick (2000) 51 IPR 102, [127].
Turning to Cunningham-Dunlop, the declaration annexes a report on the website traffic for the Opponent’s website ‘ a website that has been active since at least November 2008. The ‘Google Analytics’ figures provided are not insignificant and indicate that most of the traffic originates from Western Australia. A ‘branded search’ of the ‘Google’ search engine is said by Mr Cunningham-Dunlop to indicate that the user knows of the Granny Flats WA brand. However, a search query like ‘granny flats WA’ does not demonstrate knowledge of the brand due to the descriptive nature of the business name. A customer may simply be searching for a trader in WA who builds, designs or can provide advice on granny flats. In short, the nature of the trade mark affects the weight that may be attributed to this type of evidence.
Having considered the evidence in its entirety, the Opponent has demonstrated use of its logo trade mark before the relevant date and use in the years prior of the business name ‘GrannyFlatsWA.com’. I find that the Opponent has established a limited reputation within the relevant market but, for the reasons that follow, the particular nature and extent of that reputation is such that deception or confusion would not be the likely result.
Likelihood of Deception or Confusion
For the comparison of the trade marks, the case of Frigiking Trade Mark sets out that the court’s deliberations must ‘necessarily involve some inquiry as to the inherent distinctiveness of the part which is common to both marks under consideration’.[15] In terms of the similarity between the trade marks, the common elements between the trade marks are the expression ‘Granny Flats’ and a geographic indicator. As I have mentioned, the expression lacks inherent adaptation to distinguish the services of building, constructing and designing granny flats.
[15] [1973] RPC 739 [752].
Mr Whitehead referred to a decision of the High Court of Australia in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd. (‘Hornsby’)[16]. While made in relation to a claim for misleading and deceptive conduct arising out of similar trading names, the following comments are apposite here:
There is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name. Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. ...
The risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe.
[16] [1978] HCA 11; (1978) 140 CLR 216, [229] and also see Agapitos v Habibi [2014] WASC 47.
Mr Whitehead’s written submissions in relation to the use of the words ‘Granny Flats WA’ and ‘GrannyflatsWA.com’ included the following argument:
The confusion about which the Opponent has deposed is the exact concern addressed by Stephen J in Hornsby Building Information Centre. It is inevitable because of the descriptive trade name chosen by the Opponent. In making the decision to use a descriptive name the Opponent must accept the possibility of blunders by members of the public and that some members of the public may be confused. The Opponent has no choice but to pay the price for having chosen to adopt an eloquently descriptive name.
Mr Stewart argued that, should I accept Mr Whitehead’s argument, the same principle would apply to the Trade Marks and that the acceptance of the Trade Marks should be revoked under section 38 of the Act. Mr Stewart then referred to a recent decision of mine, Globalscope Pty Ltd.[17]. The circumstances of that decision do not, however, assist the Opponent. In deciding not to revoke acceptance in that matter, I noted the advanced state of the opposition proceedings and also the risk the opponent took not to nominate the relevant ground of opposition (in that case, section 44). Here, Mr Whitehead conceded the descriptive nature of the words in both the Opponent’s various trade marks and the Trade Marks. His point was that section 41 considers the inherent distinctiveness of a trade mark in its entirety and the Trade Marks clearly feature a distinctive device element. That fact and the decision by the Opponent not to pursue the available ground of opposition under section 41 of the Act in the current opposition would mean that revocation of acceptance under section 38 would not be reasonable.
[17] [2016] ATMO 14.
Mr Stewart made oral submissions on the nature of reputation in a brand in Western Australia, mentioning some Western Australian brands that he argued have a reputation in that state but are relatively unknown elsewhere in Australia. There may be some force to that argument but I am not convinced there is such a substantial divide. Western Australia is not a foreign jurisdiction. Even in relation to ‘spill-over’ reputation from foreign jurisdictions, Lockhart J in ConAgra Inc v McCain Foods (Aust) Pty Ltd has commented that:
It is no longer valid, if it ever was, to speak of a business having goodwill or reputation only where the business is carried on. Goods and services are often preceded by their reputation abroad. They may not be physically present in the market of a particular country, but are well known there because of the sophistication of communications which are increasingly less limited by national boundaries, and the frequent travel of residents of many countries for reasons of business, pleasure or study.[18]
[18] (1992) 33 FCR 302 at 343; 23 IPR 193, [233-234].
Although both parties have been operating concurrently in Australia for a number of years they have not provided their services outside their respective states. Despite the fact that the Applicant’s website ‘ (featuring the Trade Marks) has been in operation since 2009 and the Opponent’s ‘ has been in operation since 2008, I have been provided with no evidence of actual confusion between the Trade Marks and the trade marks nominated by the Opponent for the purposes of section 60. In this consideration, there must be ‘a real, tangible danger’[19] of deception or confusion. I find that a low level possibility of confusion would be dispelled by the nature of the services provided by the parties. Those services are a major financial undertaking and investment on the part of the consumer and choices would not be incautiously made in that context. If there were any confusion it is more likely to be of the kind envisioned in ‘Hornsby’, rather than due to any specific reputation the Opponent’s trade marks may enjoy in Western Australia.
[19] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; [594]-[595].
Ultimately, I am not satisfied that the evidence before me demonstrates that the Opponent’s trade marks have sufficient reputation amongst a substantial number of consumers within the industry such that the use of the Trade Marks would be likely to deceive or cause confusion within Western Australia or anywhere in Australia. The ground of opposition under section 60 of the Act has not been established.
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.
The first person to apply to register a trade mark will, in most cases, be entitled to claim to be the owner in relation to the goods/services of the application and also goods/services constituting the ‘the same kind of thing’.[20] An exception to that general statement is if a trade mark has been used before the filing date (the relevant date here being 12 April 2013). In that event (and in the absence of fraud) the owner of a trade mark in Australia is taken to be the first person to use it (‘first user’) in the course of trade in relation to those goods or services.
[20] Re Hicks' Trade Mark (1897) 22 VLR 636.
The first user need not have invented or first thought of the trade mark[21], but rather it is the first party to use it as a trade mark in Australia. The application of section 58 requires that a ‘total impression of similarity (emerges) 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.’[22]
[21] Aston v Harlee Manufacturing Co (1960) 103 CLR 391, [399].
[22] Carnival Cruise Lines Inc v Sitmar Cruises Ltd [1994] FCA 936; (1994) 120 ALR 495, [62].
At the hearing, Mr Stewart indicated that the Opponent was relying solely on the use of the Opponent’s logo trade mark. I have extracted the trade marks again for comparison below:
In the current opposition both parties have used their trade marks in the marketplace. The Applicant alleges use of the Trade Marks since 18 August 2009. This is the date that the Applicant was incorporated, but the actual use of the Trade Marks commenced following the production of draft business cards and stationery. This use appears to have occurred on the Applicant’s website (‘ on or around December 2009. I note that Mr Daher declares that the use of the Trade Marks as applied for appeared on the website between December 2009 and February 2010.[23] There is also evidence of use at trade shows around this time. Accordingly, I am satisfied from the Applicant’s evidence that the first use of the Trade Marks in relation to the design, approval and construction of granny flats occurred in late 2009.
[23] Daher, [13].
As I have mentioned under the section 60 discussion, the first use of the Opponent’s logo trade mark was in or around May 2012.[24] The result is that regardless of the similarity (or otherwise) between the parties’ trade marks, the Opponent cannot establish prior use of the Trade Marks in Australia.
[24] Exhibit MN-48 and paragraph 14 of Nicholls 1.
If it were necessary to consider whether the trade marks were substantially identical, I would highlight the following comments from the Full Bench of the Federal Court in Colorado Group Limited v Strandbags Group Pty Limited:
Where a person has used a mark prior to an application for registration (as in this case), this person may be regarded as the owner of the mark, providing another person has not made earlier use of it. This proposition is relevant here. Again, to quote the primary judge (in his first judgment at [23]):
In the case of an inherently distinctive mark nothing more than first use is necessary to establish proprietorship. The applicant need not show that the mark has gained public recognition. Any general use of the mark as a trade mark will be enough, although in a rare case the use may be so inconsequential that it should be ignored as de minimis ... If a mark is not inherently distinctive but indicates that an article emanates from some (unusually anonymous) source because, or partly because, the mark has acquired a secondary meaning, strictly speaking first use is not sufficient to establish proprietorship. To make out proprietorship it is also necessary to show that the mark does in fact distinguish the applicant’s goods from the goods of others. Even if this is not an aspect of proprietorship, unless a secondary meaning is established s 41 would bar registration of the mark.[25]
[25] Colorado Group Limited v Strandbags Group Pty Limited [2007] FCAFC 184 [5].
In these oppositions, the common element ‘Granny Flats’ between the composite trade marks has a low level of inherent adaptation to distinguish the services. The result being that the distinctive additions to the respective trade marks are more likely to substantially affect the identity of the trade marks.
In any event, I find that the ground of opposition fails at the threshold. Section 58 of the Act has not been established.
Section 42(b):
Section 42(b) of the Act provides:
Trade mark…use contrary to law
An application for the registration of a trade mark must be rejected if:
(b) its use would be contrary to law.
The Opponent’s arguments under this ground were that the use of the Trade Marks would be contrary to sections 18 and 29 of the Australian Consumer Law[26] and the tort of passing off. The argument was identical to that made under section 60; that the Opponent had demonstrated the necessary reputation in a trade mark in Western Australia so as to be likely to mislead or deceive a reasonably significant number of potential purchasers.
[26] Schedule 2 to the Competition and Consumer Act 2010.
Mr Stewart made comments regarding a previous decision of this office, highlighting the summary fashion in which section 42(b) had been dealt with, and the interpretation of the decision of the High Court of Australia in Parkdale and Puxu.[27] In that case Gibbs C.J. said:
In McWilliams v. McDonalds [1980] FCA 159; (1980) 33 A.L.R. 394 it was rightly held by Smithers J. and by Fisher J. that to prove a breach of s. 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source, and that Southern Cross Refrigerating Co. v. Toowoomba Foundry Pty Ltd [1953] HCA 73; (1954) 91 C.L.R. 592, a decision on the Trade Marks Act 1905 (Cth) as amended, is distinguishable: I need not add to what their Honours said on this subject (33 A.L.R.) at 397-8 and 412-3. I agree too with those learned judges that the court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive, and that evidence that members of the public have actually been misled is not conclusive: see at 399-400 and 413-4. I would add that evidence that members of the public were misled, not by any conduct of the defendant, but by other circumstances for which the defendant was not responsible, would be quite irrelevant.[28]
[27] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191.
[28] Ibid [8].
Mr Stewart then highlighted the following comments from the Federal Court in the case of SAP Australia Pty Ltd v Sapient Australia Pty Ltd (‘Sapient’):
…Conduct which misleads a customer so that, under some mistaken impression of a trader's connection or affiliation, he or she opens negotiations or invites approaches may be misleading or deceptive even if the true position emerges before the transaction is concluded - TEC & Tomas (Australia) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28 at 38; State Government Insurance Corporation v Government Insurance Office of New South Wales (1991) 28 FCR 511 at 563; Trade Practices Commission v OptusCommunications Pty Ltd (1996) 64 FCR 326 at 340. It is consistent with that general proposition, however, to accept that conduct may not be misleading or deceptive or likely to mislead or deceive, notwithstanding that it may engender temporary and commercially irrelevant error - see Lumley Life Ltd v IOOF of Victoria Friendly Society (1990) ATPR 40-987 at 50,838 per Lockhart J. The characterisation of conduct as "misleading or deceptive or likely to mislead or deceive" involves a judgment of a notional cause and effect relationship between the conduct and the putative consumer's state of mind. Implicit in that judgment is a selection process which can reject some causal connections, which, although theoretically open, are too tenuous or impose responsibility otherwise than in accordance with the policy of the legislation.[29]
[29] SAP Australia Pty Ltd v Sapient Australia Pty Ltd [1999] FCA 1821 [51].
I am not convinced that there is a tension in the interpretation by this office of Parkdale and Puxu with the above findings in Sapient but, regardless of any perceived tension, this argument does not assist the Opponent. The fact remains that the Opponent has not demonstrated sufficient reputation in a trade mark such that a consumer would be under the mistaken impression of a connection or affiliation between the parties. Neither is there sufficient evidence to conclude that the Applicant’s use of the Trade Marks would amount to conduct that is likely to mislead or deceive, particularly given my findings under section 60.
The Opponent argued that the relevant class of consumer is likely to see the word ‘Australia’ in the Trade Marks as representing an Australian subsidiary of or associated business of the Opponent, when this is not the case. That sort of association is similar to ‘the possibility of blunders by members of the public’ found to be acceptable in Hornsby. Finally (and for the reasons previously given) I am not satisfied that the use of the Trade Marks ‘would’, not ‘could’[30] amount to passing off under common law.
[30] Advantage Rent - A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683; (2001) 52 IPR 24, [28].
On the balance of probabilities, I find that the ground of opposition under section 42(b) of the Act has not been established.
Decision
Section 55 of the Act relevantly provides:
(1)Unless subsection (3) applies to the proceedings, 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.
The Opponent has not established a ground of opposition. I direct that trade mark applications nos. 1551414 and 1551417 may proceed to registration one month from the date of this decision.
If the Registrar is served with a notice of appeal before that time, I direct those registrations shall not occur until the appeal has been withdrawn or discontinued. Otherwise, the disposition of the applications should be in accordance with the Court’s order or direction.
Costs
The Applicant has been successful in these oppositions. I direct that costs be awarded against the Opponent in accordance with Schedule 8 of the Trade Marks Regulations 1995 for trade mark no. 1551414. For trade mark no. 1551417, I direct that costs be awarded against the Opponent in accordance with the practice set out in Hume Industries (Malaysia) Berhad v James Hardie & Coy Pty Ltd.[31]
[31] [2001] ATMO 78; (2001) 53 IPR 591.
Heath Wilson
Hearing Officer
Oppositions and Hearings
27 October 2016
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