Dox-al Australia Pty Ltd v Dox-al Italia S.p.A

[2015] ATMO 119

TRADE MARKS ACT 1995

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

Re:Oppositions by Dox-al Australia Pty Ltd to protection of International Registrations Designating Australia 1440582 & 1444461 (International Registrations 1084670 and 1086925) - DOX-AL and dox-al (stylised) – held by DOX-AL ITALIA S.P.A.

Delegate:

Nicole Worth

Representation:

Opponent: Iain Horak of Counsel, instructed by Watermark IP Lawyers.

Applicant: did not attend hearing, written submissions prepared by APT Patent & Trade Mark Attorneys.

Decision:

2015 ATMO 119

Regulation 17A.34 opposition to protection – grounds under ss 58, 60 and 42(b) pursued – no grounds established – extension of protection allowed.

Background

1. This decision is pursuant to oppositions by Dox-al Australia Pty Ltd (‘the Opponent’) under reg 17A.34 of the Trade Marks Regulations 1995 (‘the Regulations’) to the extension of protection to Australia of the trade marks detailed below (referred to collectively as ‘the Trade Marks’), held by DOX-AL ITALIA S.P.A. (‘the Holder’).

DOX-AL

International Registration Designating Australia (‘IRDA’) No.: 1440582

International Registration: 1084670

Priority date: 19 April 2011

Goods: Class 5: Proprietary medicines; veterinary preparations.

Class 31: Goods in connection with zootechnics, foods, feed additives and nutritional supplements.

Endorsement: Provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied.

International Registration Designating Australia (‘IRDA’) No.: 1444461

International Registration: 1086925

Priority date: 19 April 2011

Goods: Class 5: Medicinal specialties; veterinary preparations.

Class 31: Animal production goods, feed, nutritional supplements and additives for animal feed.

Endorsement: Provisions of paragraph 44(3)(b) and/or Reg 4.15A(3)(b) applied.

1. The Trade Marks were examined and advertised as accepted for possible extension of protection in the Australian Official Journal of Trade Marks on 13 February 2014. The Opponent filed Notices of Intention to Oppose the extension of protection of the Trade Marks on 20 March 2014 and subsequently Statements of Grounds and Particulars which particularised grounds of opposition under ss 58, 60, 42 and 62A of the Trade Marks Act 1995 (‘the Act’).[1] The Holder filed Notices of Intention to Defend the Trade Marks on 2 June 2014. Following this the parties filed evidence, described below, after which the Opponent requested to be heard.

   [1] Regulation 17A.34 specifies, inter alia, that the grounds for opposing an IRDA are any of those upon which the IRDA may be rejected (per reg 17A.28 in Subdivision 2), being those under ss 39 to 44 of the Act, or any of those in ss 58 to 61 and 62A of the Act.

2. I heard the matters, as a delegate of the Registrar of Trade Marks, in Melbourne on 17 September 2015. The Opponent was represented by Ian Horak of Counsel, instructed by Andrea Allen of Watermark IP Lawyers. The Holder did not attend the hearing but provided written submissions for my consideration, prepared on its behalf by Paul Wyk of APT Patent & Trade Mark Attorneys.

Evidence

1. The evidence filed in this matter comprises:

   Evidence in support:

   In respect of 1440582: a declaration by Alan Lyons, Managing Director of the Opponent, with annexures AL-1 to AL-20 including confidential annexures AL-1, AL-2 and AL-18 to AL-20, dated 5 September 2014.

   In respect of 1444461: a declaration by Alan Lyons, Managing Director of the Opponent, with annexures AL-1 to AL-20 including confidential annexures AL-1, AL-2 and AL-18 to AL-20, dated 26 September 2014. Other than the reference to the trade mark in fancy form, the information contained in this declaration is identical to that in the declaration described above.

   Evidence in answer:

   A declaration by Mauro Veneroni, President of the Board of Directors of the Holder, with annexes 1 to 13, dated 1 December 2014.

   Evidence in reply:

   A declaration by Alan Lyons with annexures AL-21 to AL-27, including confidential annexure AL-21, dated 27 March 2015.

   Additional declaration of Holder:

   A declaration by Mauro Veneroni with annexes 13 to 21, dated 6 May 2015.[2]

   [2] Prior to the hearing I informed the parties that I would take the additional declaration into consideration with the exception of paragraphs 5, 7, 9-10 and 12-14, annex 16 and the closing statements after paragraph 16 with the exception of ‘I make this declaration conscientiously believing the statements contained in this declaration to be true and correct’.

2. As a preliminary matter I note that the declarations of both parties include broad claims that the information contained within the declarations is commercially sensitive and confidential, and in particular the Holder declares that all of the information provided by it is not to be disclosed. A literal approach to such claims would leave me in the position of being barred from any discussion of the evidence and the statements made therein and therefore, particularly in the case of the Holder, finding it cannot establish its position. Additionally I note that at least some of the information within the evidence is publicly available and therefore not at all confidential. As such, in setting out my reasons for my decision I will not discuss in detail matters that are arguably commercially sensitive (particularly where exhibits or statements have been specifically identified as confidential), but will discuss facts and events that bear weight on the decision.

3. The relevant facts and events are summarised as follows.

4. The Opponent is an Australian entity involved in veterinary medicines and other products for the intensive farming industry including antibiotics, stock feed additives and anti-bacterial preparations. The Opponent’s managing director, Mr. Lyons, registered the business name ‘DOX-AL (AUSTRALIA)’ in Victoria in 1995, and the Opponent was subsequently incorporated in 1997. It declares to have extensively used the trade mark DOX-AL in respect of those products since then.

5. The Holder is an Italian entity also involved in veterinary preparations and feed additives. It was established in 1971. It registered, in Italy, the trade mark DOX-AL in 1970 and the word ‘dox-al’ in fancy form (shown below) in 1990.

1. The Holder and Mr. Lyons appear to have had a long standing business relationship, in that Mr. Lyons was an office holder of a number of entities with which the Holder has associated. The parties characterise their relationship with each other in different terms. The Opponent states that it has an ‘informal relationship’ with the Holder but that the Holder has never owned any shares in it, provided any financial assistance or support to it, or exercised any control or influence over the use of the DOX-AL trade mark or the operations or management of the Opponent. The Opponent declares that it considered it ‘may benefit from promoting itself as an independent business with global connections’ and for that reason it adopted the DOX-AL trade mark and sometimes markets itself as part of the ‘Dox-al group’, as seen in the example below.

1. At times the Opponent engaged the Holder as what it describes to be a ‘contract manufacturer’ (amongst a range of other contract manufacturers it utilises, it having no manufacturing capacity itself), and it supplied the labels to be affixed to the packaging of the products. Where the Holder manufactured the goods it would be reflected upon the packaging, as seen in the following example:[3]

[3] Both parties used the ‘dox-al’ logo - being the square within which appears the word - in the same colours, being an orange square with white letters.

1. The Opponent further declares that a majority of its products are manufactured by entities other than the Holder, and that it has registered in its own name a range of medicines and medicated stock feed additives with the National Registration Authority, now called the Australian Pesticides and Veterinary Medicines Authority (‘APVMA’) - a requirement to be able to sell veterinary products in Australia. According to the Holder, the APVMA registrations are in the name of the Opponent because the APVMA registrant is required to have a ‘legal seat’ in Australia, so it was agreed that Mr. Lyons (currently the Opponent’s Managing Director) would provide for the registration in Australia and the Holder would supply all of the documents necessary for registration.

2. For its part, the Holder characterises the Opponent as its distributor in Australia. Prior to the Opponent’s establishment the Holder entered, in 1990, into an ‘Exclusive Distributor Contract’ with Robert Bryce & Co Ltd (‘Robert Bryce’), for which the Opponent’s declarant Mr. Lyons was the signatory. The agreement contains clauses that identify the Holder as the owner of the DOX-AL trade mark and the entity with which control over the use of that trade mark lay. The Holder declares that since then it has used the DOX‑AL marks extensively in Australia.

3. It appears that the terms of the agreement were discontinued at some point prior to 1993, in which year the Holder and another Australian entity, ARMS International Pty Ltd, entered into an agreement for sales of ‘THE PRODUCT’ (which was not defined) of the Holder in Australia and New Zealand. Mr. Lyons was also the signatory for ARMS International Pty Ltd (‘ARMS’). The terms of the agreement were such that the Holder was responsible for manufacturing ‘THE PRODUCT’ and providing warranty in relation to it, and ARMS was responsible for the promotion and sale of ‘THE PRODUCT’ and for keeping appropriate records should the Holder wish to see them. There are no clauses relating specifically to trade marks, although it is specified that the costs of registering any brand names in Australia would be met by the Holder (it is not stated whether the registration referred to is as a trade mark or as a veterinary medicine).

4. These parties entered into a further agreement in 1995 whereby the Holder granted ARMS an exclusive license to exploit its patent (registered in Australia) for ‘a particular technology of production for non-dusting formulations of feed additives premixes, named BMP’. The agreement defines the terms of the license, but does not refer to trade marks or branding.

5. I note that in each of the agreements the Holder is referred to as ‘DOXAL’.

6. In respect of the Robert Bryce agreement the Opponent declares that Robert Bryce did not actually sell any products by reference to the DOX-AL trade mark or the Holder, but rather it acquired raw materials that were then labelled as products of Robert Bryce. In respect of the ARMS agreement the Opponent declares it acquired only minerals and one product (‘olaquindox’) from the Holder, but it does not say under what name it on-sold those goods.

7. The Holder also refers to alleged support that it has provided to the Opponent, including technical assistance by ‘Dott. Alberto Rovera’ who came to Australia to visit Australian clients with the Opponent, the provision of logo images and web site content for use upon the Opponent’s web site, and the provision of technical documentation relating to the products. It also describes how the Opponent has only ever been considered ‘a part of the Dox-al commercial organization operating worldwide together with other distributors and sales representatives’, and notes that the Opponent’s own website stated as at 25 March 2013 that ‘Dox-al Australia Pty Ltd is a member of the global Dox-al community’ and that the ‘International Head Office’ was that of the Holder. To demonstrate its global trade the Holder provides copies of invoices to entities in Indonesia, Pakistan, The Netherlands, Belgium, Finland and Switzerland.

8. It appears that in 2010 the relationship between the parties broke down. The Opponent alleges this was because the Holder supplied non-compliant goods. The Holder alleges that the Opponent sourced goods outside agreed terms, although this appears to be at some point subsequent to 2010. In any event since 2010 the Opponent declares that it has used ‘DOXAL’ in the form shown below upon its labelling, promotional material and stationery.

Grounds and onus

1. The Opponent pursued only the grounds under sections 58, 60 and 42 particularised in the Statement of Grounds and Particulars.

2. The Opponent bears the onus of establishing at least one of its grounds of opposition. I confirm that the relevant standard of proof in these proceedings is the ordinary civil standard of the balance of probabilities,[4] and that the relevant date at which the rights of the parties are to be determined is 19 April 2011, the priority date of the applications.[5]

   [4] Pfizer Products Inc v Karam [2006] FCA 1663, [6]-[26].

   [5] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd [1954] HCA 82.

3. I will address each ground in the same order that the Opponent discussed them.

Section 58

1. Section 58 of the Act provides:

   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.

2. In order to succeed under this ground of opposition, the Opponent must establish that:

   ·     The respective trade marks of the Applicant and Opponent are either identical or substantially identical;[6]

   ·     The respective good and services of the parties are the ‘same kind of thing’;[7] and

   ·     The Opponent’s trade mark use was prior to both the application to register and any actual use of the trade mark in Australia by the Applicant.[8]

   [6] Carnival Cruise Lines Inc. v Sitmar Cruises Ltd [1994] FCA 936.

   [7] Re Hicks’ Trade Mark (1897) 3 ALR 75.

   [8] Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1988) 10 IPR 402

3. It was not contended that the respective goods of the parties were different, and I confirm that I consider the parties’ goods are the same kind of thing. The trade marks used by the parties, at least until 2010, were identical or substantially identical. Post 2010, at which time the Opponent changed the form of trade mark it used, it is arguable whether the parties’ marks are substantially identical. I will leave that question aside for the time being and proceed on the basis that the first two limbs of s 58 are satisfied because the bulk of controversy lay with the matter of who used the Trade Marks in Australia first.

4. Clearly a business relationship has existed between the Holder and the Mr. Lyons, the Opponent’s Managing Director, since at least 1990 when the agreement with Robert Bryce was executed. I consider that that agreement made clear who the owner of Trade Marks was and with whom control over the use of the Trade Marks lay, in both instances being the Holder. It is not made clear by either party when or if that agreement was terminated. A letter in evidence dated 27 June 1993, written by My Lyons on behalf of ARMS to the Holder’s declarant, refers to ‘reestablishing’ the Holder’s olaquindox and a ‘loss of business’ incurred by Robert Bryce,[9] suggesting that the agreement may have explicitly or implicitly been terminated prior to mid 1993.

   [9] The phrase ‘reestablishing’ is not explained further. I have taken it to likely refer to the Holder re-establishing supply of olanquindox.

5. Since then, trade between the Holder and various entities controlled by Mr. Lyons (including the Opponent) has continued, although apparently without specific provisions relating to ownership of trade marks or brand names. The Holder appears to be under the belief that the benefit of the Opponent’s use inures to it by virtue of the Opponent being one of its distributors, and the Opponent appears to be under the belief that the benefit of use inures to it on the basis that it operates independently from the Holder.

6. The earliest reference to the Trade Marks in relation to the Australian market place is the agreement between the Holder and Robert Bryce. Whilst this agreement may not necessarily amount to use of a trade mark, to my mind it does make clear that at that time the Holder was the owner and controller of the Trade Marks and there was no indication that the Holder intended to surrender ownership of them. However independent or otherwise the Opponent’s operations were at that stage, I do not think the Opponent could reasonably have considered that it owned the Trade Marks. I note at the same time the Opponent’s statement that Robert Bryce did not make any use of the Trade Marks.

7. It appears that ARMS on-sold at least one product it sourced from the Holder, being olaquindox.[10] At that time the 1993 agreement between ARMS and the Holder was in place, which did not make specific provisions in relation to ownership of trade marks. Nonetheless, there is nothing before me to suggest that the Holder intended to relinquish ownership of the Trade Marks nor anything that I consider would give the Opponent a reasonable basis for believing so (especially in light of the preceding agreement with Robert Bryce wherein the Holder’s ownership of the Trade Marks was made clear). Moreover the provision that states the ‘principal’ (being the Holder) would meet the costs of registering brand names would tend to suggest that the principal was responsible for and retained ownership of them.

   [10] The Opponent also sourced ‘minerals’ from the Holder, which are implied to be raw materials although the Holder disagrees with this contention.

8. As with the Robert Bryce agreement, it is not clear when or if the agreement between the Holder and ARMS was terminated. There is no documentation before me governing trade between the Holder and the Opponent. It is possible that given the lengthy relationship between the parties they did not consider a written agreement necessary. It appears that the Opponent continued to build the business in Australia, with the assistance of the Holder although not necessarily under the control of the Holder, and continued to present itself as part of the global ‘DOX-AL group’ until the relationship broke down. However even if the Opponent’s operations were not under the control of the Holder I do not consider, in these circumstances, that the Opponent could reasonably believe that ownership of the Trade Marks had become vested in it – Mr. Lyons had previously acknowledged the Holder’s ownership and the Opponent continued to market itself as part of a global group for which the Holder was the head office. In such circumstances I consider the benefit of use of the Trade Marks inured to the Holder and accordingly that the Holder was the first user of the Trade Marks.

9. I note the comments of the delegate in L.T. Overseas Limited v Chemico P/L,[11] a matter dealing with a dispute as to ownership of the trade mark ‘DEVAAYA’, and repeat them here:

   Given the course of dealings between the parties as disclosed in the evidence and summarised above and in the absence of any express agreement, written or otherwise, as to ownership of the DEVAAYA trade mark in Australia, the applicable law is well established.  An often cited authority in this regard is the High Court’s decisions both at first instance and on appeal in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1967) 1a IPR 491, where the Full Court said (at 503):

   [W]e have no doubt that when an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer.

   The Full Court thus affirmed the decision of Windeyer, J at first instance, who had put it this way (at 500):

   But when it is said that a trade mark is used to distinguish the goods of one man from those of another, that abbreviated statement obviously does not refer to the goods of the owner of the mark in the sense of goods which he owns or possesses. After the goods have been sold by him his mark may still, using the definition of trade mark in the Act, be used in relation to those goods for the purpose of indicating a connection in the course of trade between them and him, the registered proprietor of the mark. The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products. Goods remain in the course of trade so long as they are upon a market for sale. Only when they are bought for consumption do they cease to be in the course of trade. The concepts upon which the case turns are economic, commercial, business concepts concerning the marking and marketing of goods, rather than the provisions of the Sale of Goods Act concerning the passing of property.

   [11] [2008] ATMO 44.

1. I mention also that even if, as the Opponent contends, the Opponent was an independent entity for which the Holder was a contract manufacturer, then the Opponent itself was an Australian customer of the Holder and the Holder first used the Trade Marks in trade when it sold goods to the Opponent.

2. I am not satisfied that the Opponent was the first user of the Trade Marks and accordingly the ground under section 58 is not established.

Sections 60 and 42(b)

1. Section 60 of the Act provides:

   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

2. To establish the ground of opposition under s 60 the Opponent must demonstrate that another trade mark had acquired a reputation in Australia such that by 19 April 2011 the use of the Trade Marks in respect of the Holder’s goods would be likely to deceive or cause confusion.

3. I mention first that the evidence which relates specifically to such matters as volumes of trade under the Trade Marks, extent and numbers of customers, or other such matters which would demonstrate the degree of reputation acquired is scant. A single total figure of 17 years’ worth of sales under the DOX-AL trade mark is given. Yearly approximate advertising expenditure is provided, which is quite low although the Opponent points out that they reflect the specialised nature of the goods and that there are advertising restrictions for veterinary medicines – accordingly it is declared that a majority of promotion occurs on a face-to-face basis. Two examples of advertisements are provided which were published in ‘Australian Pork Newspaper’: one in May 2008 and another in July 2006. A supporting declaration, annexed to the first Lyons declaration, is provided from ‘Australia’s largest poultry integrator, which represents almost 50% of the Australian market and is [the Opponent’s] largest customer’. That declarant states that it has been a customer of the Opponent since 1997 and that it is its belief that the Opponent is very well known within the Australian intensive farming industry, and that should the Holder trade in Australia that purchasers would believe the products are from the Opponent or that the Opponent is involved in the marketing and selling of those products.

4. I am not satisfied that the Opponent has established a reputation in the ‘DOX-AL’ trade mark on the basis of this information. There is no indication of the Opponent’s market share, how many customers it has, the readership of ‘Australian Pork Newspaper’, whether and to what degree sales increased over time, or how many customers it has provided face-to-face services to. The supporting declaration gives some support to a reputation in ‘DOX-AL’, however the confusion to which the declarant points is caused by the Opponent having adopted the Trade Marks of the Italian entity.

5. This relates to the difficulty facing the Opponent under this ground, which is the same as that in respect of s 58 – namely that the benefit of the use of the Trade Marks accrues to the Opponent.

6. Similarly, the assertion under s 42(b) is that the Holder’s use of the Trade Marks would amount to passing off or misleading and deceptive conduct. Section 42 provides:

   An application for the registration of a trade mark must be rejected if:

   (a) …

   (b) its use would be contrary to law.

The law to which use of the Trade Marks is alleged to be contrary is section 18 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010. Here again, however, the Opponent faces the difficulty of the benefit of use accruing to the Holder, notwithstanding that I am not satisfied it has established a reputation likely to cause confusion under s 60 (a lower threshold than that required to establish misleading or deceptive conduct under the Australian Consumer Law).

1. Accordingly, I am not satisfied that either of the grounds under ss 60 or 42(b) is established.

Decision

1. Regulation 17A.64N relevantly provides:

   Unless the opposition proceedings are discontinued or dismissed, the Registrar must decide:

   (a)    to refuse protection in respect of all of the goods or services listed in the IRDA; or

   (b)    to extend protection in respect of some or all of the goods or services listed in the IRDA (with or without limitations); having regard to the extent (if any) to which the grounds on which the IRDA were opposed have been established.

2. The Opponent has not established any of the grounds of opposition and the opposition fails.

3. I direct that protection be extended to Australia one month from the date of this decision. If the Registrar is served with a notice of appeal on or before that time, I direct that extension of protection shall not occur until the appeal has been discontinued, or in the event of a decision from the Court, that the applications be subject to the Court’s orders.

4. The parties sought costs. Costs generally follow the event, and I see no reason to depart from the general principle here. Accordingly, I award costs against the Opponent as per Schedule 8 of the Regulations, with the costs in the second opposition to be taxed at 20% of scale (per Hume Industries (Malaysia) Berhard v James Hardie & Coy Pty Ltd[12]).

   [12] (2001) 53 IPR 591.

Nicole Worth

Hearing Officer

Trade Marks Hearings

17 December 2015