Enagic Co. Ltd to registration of trade mark application 1798917 (35) – KANGEN – in the name of Horizons (Asia) Pty Ltd

[2018] ATMO 192

TRADE MARKS ACT 1995

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

Re:Opposition by Enagic Co. Ltd to registration of trade mark application 1798917 (35) – KANGEN – in the name of Horizons (Asia) Pty Ltd

Delegate:	Nicholas Smith
Representation:	Opponent: Spruson & Ferguson Applicant:  Self-Represented
Decision:	2018 ATMO 192 Trade Marks Act 1995 (Cth) - Section 52 opposition: ss 42(b), 44, 58, 60 and 62A considered – none established – trade mark to proceed to registration

Background

1. This decision concerns an opposition brought by Enagic Co. Ltd (‘Opponent’) pursuant to s 52 of the Trade Marks Act 1995 (Cth) (‘Act’) to the registration of the trade mark which is the subject of the application detailed below in the name of Horizons (Asia) Pty Ltd (‘Applicant’): 

Application Number:	1798917
Filing Date:	24 September 2016
Services:	Class 35: Distribution of goods (not being transport services) (agent, wholesale, representative services, by any means); wholesale; retail; sales by any means; advertising, marketing, promotion and public relations; operation, supervision and management of loyalty programs, sales and promotional incentive schemes; discount services (retail, wholesale, or sales promotion services); customer support services; compilation and maintenance of directories, mailing lists including such lists compiled and maintained via the global computer network; conferences and exhibitions for commercial purposes; business administration; business development; dissemination of commercial information; distribution of prospectus; importing services; exporting services; providing information, advisory and consultancy services, including by electronic means, for all of the aforesaid services  (‘Applicant’s Services’)
Trade Mark:	KANGEN	(‘Trade Mark’)
Endorsements	The applicant has advised that KANGEN is a coined word and the English translation of the word KANGEN appearing in the trade mark is HEALTHY.

2. Following the advertisement on 16 February 2017 in the Australian Official Journal of Trade Marks of the Trade Mark’s acceptance for possible registration, the Opponent filed a Notice of Intention to Oppose (and a request to extend the period allowed to file a Notice of Intention to Oppose, subsequently granted on 4 July 2017) on 20 April 2017.  The Opponent then filed a Statement of Grounds and Particulars on 19 May 2017 (‘SGP’). The SGP raised grounds of opposition under ss 42(b), 43 44, 58, 59 60 and 62A of the Act. The Applicant filed a Notice of Intention to Defend on 13 July 2017.

Evidence

3. The Opponent filed Evidence in Support of its opposition (‘EIS’) on 25 October 2017.  This evidence consists of a declaration by Kenso Matsouka, director of Enagic Australia Pty Ltd, an affiliated company of the Opponent, made on 24 October 2017 with Exhibits KM-1 to KM-9 (‘Matsouka Declaration’).

4. The Applicant filed Evidence in Answer (‘EIA’) on 9 February 2018 and on 12 February 2018.  This evidence consists of a declaration made on 8 February 2018 by NG Lee, administrator of the Applicant, with Exhibits NG-1 to NG-14 (‘Lee 1’) and a declaration made on 12 February 2018 that operates to correct errors in Lee 1 (‘Lee 2’).

5. The Opponent filed Evidence in Reply (‘EIR’) on 16 April 2018.  This evidence consists of a declaration made on 16 April 2018 by Michelle Betschart, Trade Marks Attorney with Fisher Adams Kelly Callinans, the Opponent’s then representative (‘Betschart Declaration’). 

1. Both the Applicant and the Opponent make various claims of confidentiality in respect of their evidence, with the Opponent suggesting that any information relating to the commercial operation of the Opponent is confidential and the Applicant making a broad claim of confidentiality over all evidentiary material relating to the Applicant, including publicly available information such as Google search results and business name registrations.  I adopt the approach of the Delegate in Source Homeloans Pty Ltd v Coles Group Ltd, who when in receipt of a similar claim (in that case solely by the then Opponent) stated:

   The confidentiality claim obviously extends to the whole of the evidence led in support of the opposition. It is not clear to me how I could decide this matter without discussing the evidence the opponent has served and filed in support of its opposition. The onus in these proceedings is on the opponent to establish its grounds of opposition, at least to my satisfaction. Seemingly barred from any discussion of the opponent’s statements and exhibits and the weight that I attach to them if I were to lend credence to the claim, my hands would appear to have been effectively tied. Prima facie, the easiest way out of the dilemma would be to accede to the opponent’s wishes and find that it has not established its opposition. Thus, if I were to take Mr Peter’s request (made within several declarations) at face value, that would be the end of these matters.

   This position, obviously, is extreme, since the opponent has filed this evidence in support of its opposition and must expect the evidence to be discussed and weighed. It will be sufficient for me to say, in setting out my reasons for my decision, that there are arguably commercially sensitive matters in the evidence that I do not need to discuss in detail (and, if I do, my consolation lies in the fact that the opponent in not being specific in its request has brought the problem upon itself). None the less, the evidence of the parties as a whole satisfies me of various things, which I will set out under the appropriate headings below.[1]

   [1] Source Homeloans Pty Ltd v Coles Group Ltd [2008] ATMO 17, [5]-[6].

   7. Once the time allowed for filing evidence had ended the parties were given an opportunity to request a hearing or to file written submissions.  By letter issuing from IP Australia on 4 August 2018 the parties were notified that as neither party had requested a hearing the matter would be given to a delegate of the Registrar for a decision based on the written record.  The letter indicated that the parties had one month from the date of the letter to file any written submissions they wished to reply upon.  On 24 September 2018 the Opponent filed its submissions (‘Opponent’s Submissions’).  On 8 October 2018 the Applicant filed its submissions (‘Applicant’s Submissions’).

   8. I am a delegate of the Registrar of Trade Marks and I am to decide the opposition as required by s 55 of the Act which provides that, unless the proceedings are discontinued, dismissed, or have lapsed under s 54A 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.  

   In doing so I take account of     the written record comprised of the materials mentioned in the preceding paragraphs.

   The Opponent

   9. The Opponent is a company that originated in Japan.  It was established in 2003 but its earliest predecessor in title was established in 1974. 

   10.     The Opponent is the applicant for the trade mark listed below (‘Opponent’s Trade Mark’).  The goods for which the Opponent’s Trade Mark is sought to be registered are collectively referred to as the ‘Opponent’s Goods’. 

Number	Trade Mark	Priority Date	Goods
1756433	KANGEN WATER	11 Feb 2016	Class 11: Electrolytic water generators for electrically decomposing tap water to generate electrolytic water and for removing chlorine odor from tap water

11. I also note the Opponent in respect of the s 44 ground of opposition relies on the mark referred to below registered to Ian Hamilton (‘Hamilton Mark’).  The Hamilton Mark has now been removed for non-use.  The goods for which the Hamilton Mark were registered are collectively referred to as the ‘Hamilton Goods’.  For the purposes of the decision the Opponent’s Trade Mark and the Hamilton Mark shall be collectively referred to as the ‘s 44 Marks’.

Number	Trade Mark	Priority Date	Goods
1235000	KANGEN	15 April 2008	Class 7: Water filtration machines

12.     The Matsouka Declaration contains the following claims/statements:

·    The Opponent and its predecessors have been involved for over 40 years in manufacturing water-ionization systems to produce Alkaline water.  Its predecessors began trading in Japan in 1974 and in 1990 commenced selling Kangen water.

·    The Opponent’s related company Enagic Australia Pty Ltd (‘Enagic Australia’) was established in 2010.

·    The Opponent sold Kangen products, being products that can be used to create Alkaline water, in Australia since 2007, initially from the Opponent’s Hong Kong affiliate and after 2010, from Enagic Australia. These products were sold under the Trade Mark.

·    The Opponent’s Kangen products are sold in Australia both directly to end users and through resellers to end users.

·    The Opponent has promoted its Kangen products in Australia by way of its website, retailer websites and through Facebook.   

·    The Applicant and Opponent are direct competitors and are currently involved in a number of related disputes.  It should be assumed that the Applicant’s Services would be used to sell the same or similar products to the Opponent’s Kangen products.  Such use would cause confusion in the marketplace.

13.     The Matsouka Declaration provides evidence of estimated worldwide marketing expenditure by the Opponent in relation to Kangen products but does not attempt to identify what proportion, if any, is directed at Australia.  The Opponent claims to have over 10,000 distributors in Australia and New Zealand.  However a cursory look at the Opponent’s sales revenue would indicate that, were this correct (and assuming that the majority of those 10,000 distributors were based in Australia) the level of sales per distributor would be extraordinarily low.  As such I have treated this statement (which is not supported by documentary evidence) with some scepticism.

14.     The Betschart Declaration contains the following claims/statements: 

·    The Opponent sells its Kangen products both directly to consumers and through distributors.  As noted in the Matsouka Declaration, it has over 10,000 distributors in Australia and New Zealand.  In order to support its distributors the Opponent provides a range of services to its distributors including the provision of marketing material, advertising, distribution of goods, operation, supervision and management of sales and promotional incentive schemes, customer support services, distributor training seminars and general business administration services.

·    The Opponent’s distributors have access to an exclusive online distributor portal that provides them with distributor support services.  These services have been supplied to its distributors since 2010 under both the ENAGIC and KANGEN Marks.

15.     I note that the Betschart Declaration does not exhibit any documentary material to support the statements above.  Furthermore I note that the deponent is not an employee or company officer of the Opponent, rather she is a trade marks attorney at the firm then representing the Opponent.  While the Betschart Declaration states that it is made on the basis of the declarant’s own knowledge, belief and records of her firm, no records are provided and it is not clearly explained how the deponent would have personal knowledge or belief of the various matters deposed, including for example, the manner in which the Opponent provided services to its distributors in Australia in 2010.

The Applicant

16.     The Applicant is a company based in Australia involved in the international trading and distribution of bottled beverages and air and water purification products.  The Applicant is the owner of the trade mark listed below (‘Earlier Mark’).   

Number	Trade Mark	Priority Date	Goods
1280502	KANGEN	10 Jan 2009	Class 11: Apparatus for lighting, heating, cooking, refrigerating, drying, ventilating; apparatus for sanitary purposes excluding apparatus for water filtration; apparatus for purifying air, namely an air ioniser Class 32: Beers, waters including mineral water, aerated water and ionized water, other non-alcoholic drinks, fruit drinks and fruit juices, syrups and other preparations for making beverages

17.     Lee 1 contains the following claims/statements:

·    On or before January 2009 the Applicant commenced promoting their own brand of goods and services under the Earlier Mark.  The Earlier Mark has been used in Australia since 10 January 2009.

·    The Applicant began marketing its Kangen products to prospective buyers and distributors via an online selling program.  Since 2009 the Applicant’s Kangen brand has been promoted internationally and gained recognition and popularity in respect of bottled water, air purifiers and other consumer goods and related services.

Grounds of Opposition, Onus and Standard of Proof

18. As indicated above in the SGP the Opponent nominated grounds of opposition under ss 42(b), 43, 44, 58, 59, 60 and 62A of the Act but in its submissions indicated that it no longer pressed the grounds under ss 43 and 59. To successfully oppose the application the Opponent needs to establish at least one of the remaining grounds.

19.     The onus of proof in an opposition rests upon the Opponent.[2]  The relevant standard of proof is the ordinary civil standard based on the balance of probabilities.[3]  The date at which the rights of the parties are to be determined is 24 September 2016 (‘relevant date’), being the priority date of the application in Australia.[4]

[2] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32].

[3] Following Pfizer Products Inc v Karam (2006) 70 IPR 599, [6]-[26], and Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156, [133].

[4] Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592, 595, see also s 29(1) Trade Marks Act 1995 (Cth).

Discussion

Section 44

20. The relevant provisions of the Act with respect to the ground of opposition pursuant to s 44 are reproduced below:

Section 44 - Identical etc. trade marks

(1)…

(2)Subject to subsections (3) and (4), an application for the registration of a trade mark (applicant's trade mark) in respect of services  (applicant's services) must be rejected if:

(a)it is substantially identical with, or deceptively similar to:

(i)a trade mark registered by another person in respect of similar     services or closely related goods; or

(ii)a trade mark whose registration in respect of similar services or closely related goods is being sought by another person; and

(b)the priority date for the registration of the applicant's trade mark in respect of the applicant's services is not earlier than the priority date for the registration of the other trade mark in respect of the similar services or closely related goods.

Note 1: For deceptively similar see section 10.
Note 2: For similar services see subsection 14(2).
Note 3: For priority date see section 12.

Note 4: The regulations may provide that an application must also be rejected if the trade mark is substantially identical with, or deceptively similar to, a protected international trade mark or a trade mark for which there is a request to extend international registration to Australia: see Part 17A.

(3)If the Registrar in either case is satisfied:

(a)that there has been honest concurrent use of the 2 trade marks; or

(b)that, because of other circumstances, it is proper to do so;

the Registrar may accept the application for the registration of the applicant's trade mark subject to any conditions or limitations that the Registrar thinks fit to impose. If the applicant's trade mark has been used only in a particular area, the limitations may include that the use of the trade mark is to be restricted to that particular area. 

Note:  For limitations see section 6.

(4)If the Registrar in either case is satisfied that the applicant, or the applicant and the predecessor in title of the applicant, have continuously used the applicant's trade mark for a period:

(a)beginning before the priority date for the registration of the other trade mark in respect of:

(i)             the similar goods or closely related services; or

(ii)            the similar services or closely related goods; and

(b)ending on the priority date for the registration of the applicant's trade mark;

the Registrar may not reject the application because of the existence of the other trade mark.

Note 1: An authorised use of the trade mark by a person is taken to be a use of the trade mark by the owner of the trade mark (see subsection 7(3)).

Note 2: For predecessor in title see section 6.
Note 3: For priority date see section 12.

Section 10 - Definition of deceptively similar

For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

1. To successfully oppose the application pursuant to s 44 of the Act the Opponent must establish the requirements of s44(2), i.e. that at least one of the trade marks upon which it relies:

   ·    has a priority date which is earlier than that of the Trade Mark (‘the first requirement’);

   ·    is substantially identical with or deceptively similar to the Trade Mark (‘the second requirement’); and

   ·    is in respect of similar services, and/or goods which are closely related to, the Applicant’s Services (‘the third requirement’).

2. In the event that each of these requirements is satisfied by the Opponent it may be possible for the Registrar to accept the application (or allow it to proceed to registration) if the Registrar is satisfied, pursuant to ss 44(3) and 44(4) of the Act, that there has been honest concurrent use of the Trade Mark, other circumstances exist which would make registration of the Trade Mark proper, or that the Applicant has continuously used the Trade Mark beginning before the priority date of the Opponent’s relied upon marks.

3. The Opponent has particularised the ground of opposition in the SGP by reference to the s 44 Marks. The Hamilton Mark was removed from the Register on 9 January 2018. The issue of trade marks which, at the filing date of a contested trade mark application, were registered or pending registration but had by the time of the decision lapsed or been removed from the Register has previously been discussed in decisions of the Trade Marks Registrar with the clear conclusion that ss 44(1) and 44(2) should be applied having regard to the status of potentially conflicting trade marks at the time the opposition is decided.[5]  I do not accept the Opponent’s submission that the recent decision in Dunlop Aircraft Tyres Limited v The Goodyear Tire and Rubber Company[6] changes this position; the statements made at [202]-[215] are not made in the context of an opposition to the registration of a Trade Mark under s 52 of the Act. Given that the Hamilton Mark, at the time of assessment, has been removed from the Register there is no basis to consider it under s 44 of the Act. Therefore I need only consider the Opponent’s Trade Mark.

   [5] iGuard Pty Ltd v iGuard Australia Pty Ltd [2018] ATMO 91 and 1872 Holdings VOF v Havana Club Holding SA [2017] ATMO 12, [18]-[31].

   [6] [2018] FCA 1014.

   24.     The Opponent’s Trade Mark has a priority date that is earlier than the priority date of the Trade Mark and is clearly at least deceptively similar to the Trade Mark, the only difference being the addition of the descriptive term ‘water’.  The first and second requirements are satisfied. 

   Closely related goods

   25.      The recent case of Paypal, Inc v Braintree Communications Pty Ltd summarises the legal principles applicable when determining if the services for which the Trade Mark is sought to be registered are closely related to the goods for which the Opponent’s Trade Mark is registered as follows:

   In Qantas Airways Ltd v Edwards[7] Yates J quoted from the judgment of French J in Registrar of Trade Marks v Woolworths Ltd[8]:

   [7] [2016] FCA 729 at [111].

   [8] (1999) 93 FCR 365; [1999] FCA 1020 at [37].

   ... The term “closely related” recognises that goods and services are different things. There will be classes of goods which are similar to each other. There will also be classes of services which are similar to each other. But the word “similar” does not apply as between goods and services. So there must be some other form of relationship between the services covered by one mark and the goods covered by another to enable the goods or services in question to be described as “closely related”. ...

   Yates J continued:

   His Honour also said in this connection that “closely related” was of wider import than “similar”.

   Woolworths was a case arising under s 44(2) of the Act. Thus, the question was whether, in the case of a mark for services, there was conflict with a previously registered mark for “closely related goods”. His Honour gave (at [38]) the following illustrations where goods and services might be “closely related”:

   Services which provide for the installation, operation, maintenance or repair of goods are likely to be treated as closely related to them. Television repair services in this sense are closely related to television sets as a class of goods. A trade mark used by a television repair service which resembles (to use the language of s 10) the trade mark used on a prominent brand of television sets could be deceptively similar for suggesting an association between the provider of the service and the manufacturer of the sets. ...

   His Honour also made reference to Caterpillar Loader Hire (Holdings)Pty Ltd v Caterpillar Tractor Co (1983) 77 FLR 139; [1983] FCA 143 (Caterpillar) in which Lockhart J said (at 150):

   ... It is obvious that there is likely to be confusion if substantially the same or deceptively similar trade marks are used by different proprietors, one for goods and the other for services, where the goods and services are closely related. Examples that present practical difficulties are the sale of goods such as data processing equipment and the sale of programs for their operation; the sale of curtains and furnishing materials on the one hand, and the sewing of curtains on the other, as interior decorators often sell curtains and perform the service of sewing; the sale of clothes on the one hand and tailoring on the other because the service of custom tailoring is frequently provided in addition to the sale of ready-made clothes; and the sale of educational material on the one hand and educational services (language courses, home study programs) on the other.

   Significantly, in Woolworths, French J (at [38]) also said that the range of relationships between goods and services which may support the designation “closely related” will be “limited by the requirement in s 44(2) that there be a substantial identity or deceptive similarity between the potentially conflicting marks which attach to them”. This observation might suggest that his Honour had in mind that, in a case arising under s 44 of the Act, the determination of whether the goods and services are “closely related” will be informed by the determination of whether the competing marks are, in fact, deceptively similar.

   However, at [38] his Honour continued by stating that “[t]he relationships may, and perhaps in most cases will, be defined by the function of the service with respect to the goods” (emphasis added). It was in this context that his Honour gave the examples quoted at [113] above and referred to the examples given by Lockhart J in Caterpillar. This part of his Honour’s reasoning suggests that the question of whether goods and services are “closely related” is a discrete question within the injunction against registration provided by s 44 of the Act.

   This understanding is supported by the following passage in [39] of his Honour’s reasons:

   ... Apposite to the present case is the question whether a retailer of various classes of goods provides a service to customers which warrants the description of the goods for sale as “closely related goods” in respect of that service. The characterisation of the relationship between services and goods in this way is evaluative. The logic of s 44(2) suggests that the determination whether goods are closely related to the services in question is logically antecedent to the determination whether the trade mark in respect of the services is deceptively similar to that in respect of the goods. Wilcox J at first instance in this case saw the questions as “conceptually distinct” but accepted that one could not be addressed in isolation from the second: “The closer the relationship between the services and particular goods, the more likely any similarity in marks will prove deceptive.” This approach is not greatly assisted by the language of s 10 which, like s 6(3) of the 1955 Act, defines deceptive similarity solely in terms of the degree of resemblance of the trade marks in question and whether that degree of resemblance is “likely” to deceive or cause confusion. But that definition must, in the context of s 44, be applied to the case of “closely related” goods and services.

   His Honour concluded at [40]:

   In the end there is one practical judgment to be made. Whether any resemblance between different trade marks for goods and services renders them deceptively similar will depend upon the nature and degree of that resemblance and the closeness of the relationship between the services and the goods in question. It will not always be necessary to dissect that judgment into discrete and independent conclusions about the resemblance of marks and the relationship of goods and services. Consistently with that proposition, the Registrar or a judge on appeal from the Registrar could determine in a particular case that, given the limited degree of resemblance between the relevant marks he or she could not be satisfied, no matter how closely related the goods and services concerned, that the use of the applicant’s marks would be likely to deceive or to cause confusion.

   The practical judgment to which his Honour referred in the last passage is, quite clearly, the judgment involved in determining whether the two marks are deceptively [similar]. The passage marks his Honour’s acceptance that the question of deceptive similarity between allegedly conflicting marks will be informed, in part, by the closeness of the relationship between the goods and services in respect of which the marks severally are, or are sought to be, registered. I do not accept that his Honour was there directing attention to the judgment involved in determining whether given goods and services are “closely related” as such. [9] 

   [9] [2017] ATMO 90, [28]-[29].

   26. The Opponent’s Goods relate to a very specific type of water generator and purifier. The Applicant’s Services are distribution and business administration services that have no specific connection to the Opponent’s Goods. The mere fact that an entity could engage in distribution and business administration services incidental to the course of selling the Opponent’s Goods is not a basis to find that they are closely related. There is no particular relationship between the Applicant’s Services and the Opponent’s Goods and hence no basis to conclude that these services are closely related to the Opponent’s Goods. I find that the Opponent has failed to establish the ground of opposition under s 44 of the Act.

   Section 58

   27. Section 58 of the Act is reproduced below:[10]

   [10] In summarising the principles that apply with respect to s 58 of the Act I have paraphrased from Richard Khouzame v Melambada Pty Ltd (Unreported, Australian Trade Marks Office, 6 January 2017), [12].

   Section 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.

1. It is now well established at law that in order to succeed under this ground of opposition the Opponent must establish three factors.  These are:

   · that the Trade Mark is identical, or substantially identical, to the trade mark(s) relied upon by the Opponent (‘the first factor’);[11]

   [11] Carnival Cruise Lines Inc. v Sitmar Cruises Limited (1994) 31 IPR 375.

   · that the Applicant’s Services are the ‘same kind of thing’ as the goods for which the trade mark(s) relied upon by the Opponent was used (‘the second factor’);[12] and

   [12] Re Hicks’ Trade Mark (1897) 22 VLR 636.

   ·    that a person other than the Applicant has the earlier claim to ownership of the Trade Mark based on use of the trade mark(s) relied upon by the Opponent prior to whichever is the earlier of: (a) the application to register; or (b) any actual use of the Trade Mark by the Applicant (‘the third factor’).[13]

   [13] Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402, 413.

2. The ground based on s 58 of the Act was particularised in the SGP as follows:

   4.1. The Applicant is not the owner of the opposed trade mark application.

   4.2. The opposed trade mark application is substantially identical with, or deceptively similar to, Australian trade marks numbered 1235000 and 1756433.

   4.3. The services of the opposed application are the same as, or are "the same kind of thing" as, the goods of the Australian trade marks set out in clause 4.2 above.

   4.4. The Opponent has use of, and a reputation in, its KANGEN Trade Marks, for the same and similar goods to those of the opposed application.

   4.5. Use of the trade marks outlined at clauses 4.2 and 4.4 predates the 24 September 2016 filing date of the opposed trade mark application.

3. With respect to the s 44 Marks (4.1-4.3 above); for the Opponent to succeed under this ground it is necessary to show that the second factor is satisfied, namely that the Applicant’s Services are the ‘same kind of thing’ as the Opponent’s Goods or the goods for which the Hamilton Mark were used, which are also water filtration machines.

4. In respect of the ‘same kind of thing’ the delegate in Sola Tube Australia Pty Ltd v Gabriel Andrews stated as follows:

   The “same kind of thing” in respect of the goods or services of the parties does not equate to goods or services which may be “of the same description” (the latter being a term of art for goods or services which are not the same but which consumers are likely to believe come from the same source). It is a narrower test that applies in the context of a claim to ownership[14]. …

   [14] Colorado Group Limited v Strandbags Group Pty Ltd (‘Colorado’) [2007] FCAFC 184; (2007) 74 IPR 246; Krone AG v Brook (t/as Cannon Watch Co) (1996) 34 IPR 340, Sola Tube Australia Pty Ltd v Gabriel Andrews [2014] ATMO 103, [12].

5. I refer to the discussion in respect of the s 44 ground of opposition in which I found that the Opponent’s Goods were not closely related to the Applicant’s Services. As the test for ‘the same kind of thing’ is a narrower test than the test required under s 44 of the Act I find that the Applicant’s Services are not the ‘same kind of thing’ as the Opponent’s Goods. In addition the Applicant’s Services are not the same kind of thing as ‘water filtration machines’.

6. The Opponent has also submitted that it has used the KANGEN Trade Marks (which is defined to mean the Opponent’s Trade Mark and any other unregistered mark containing the word ‘kangen’) to provide various distribution services to its distributors since at least 2010.  I do not accept this submissions for the following reasons:

   -The Opponent has provided insufficient evidence to support this claim.  In paragraph 15 above, I noted my concern with the absence of any documentary material to support the statements made in the Betschart Declaration relating to the supposed provision of services to its distributors. 

   -The evidence of the invoices attached to the Matsouka Declaration (to the extent that such invoices were in English) is that the Opponent or its related entities sold their Kangen products to customers.  On the invoices a customer could tick if they wanted to be considered to be a distributor.  However the invoices provide no indication that the Opponent or related entities provided any ongoing services to its distributors, nor do they set out any obligations the distributor has to the Opponent in order to receive such services.

   -Finally to the extent that the Opponent has, in the course of selling its Kangen products, distributed its products to resellers, such activities are merely incidental to the use of the KANGEN Trade Marks for the Opponent’s Goods and not a separate or distinct set of services offered under the KANGEN Trade Marks for which the Opponent earns revenue.  On the evidence before me, the Opponent has only used the KANGEN Trade Marks for the Opponent’s Goods, with any other application of the KANGEN Trade Marks being incidental to the use of the Opponent’s Trade Mark for the Opponent’s Goods.

7. I find that the Opponent has failed to establish the ground of opposition under s 58 of the Act.

   Section 60

   35. Section 60 of the Act is reproduced below:

   Section 60 - 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.

8. To establish a ground of opposition under s 60 an opponent must demonstrate that as at the relevant date there was another trade mark which had acquired a reputation in Australia amongst a significant or substantial number of persons in the relevant market such that use of the trade mark would be likely to deceive or cause confusion.[15]

   [15] The present paragraph and the following paragraphs summarizing the requirements under s 60 of the Act are paraphrased from the decision of the Registrar’s Delegate in Australian Boutique Markets Pty Ltd v Rachael Zelensky and Jeffrey Zelensky [2013] ATMO 97.

9. In McCormick & Co Inc v McCormick, Kenny J considered what is intended by the word ‘reputation’ as used in s 60. Her Honour had consulted the Macquarie Dictionary and on the basis of the definition provided concluded that it was ‘the recognition of the [trade mark] by the public generally’.[16]  Her Honour quoted with approval the following words of Lockhart J in Re ConAgra Inc v McCain Foods (Aust) Pty Ltd:

   [16] [2000] FCA 1335, [81].

   [R]eputation within the jurisdiction may be proved by a variety of means including advertisements on television or radio, or in magazines and newspapers within the forum. It may be established by showing constant travel of people between other countries and the forum and that people within the forum, (whether residents there or persons simply visiting there from other countries) are exposed to the goods of the overseas owner …[17]

   [17] (1992) 33 FCR 302, 343.

10. On the subject of reputation Kenny J also referred to the Hugo Boss decision, where the Registrar’s delegate observed:

    [I]t is true that the assessment of the reputation of a trade mark goes far beyond mere examination of sales or turnover of goods sold under that trade mark and contemplation of the advertising and promotional figures.

    As regards a trade mark, its reputation derives both from the quantum of sales under that mark and also its esteem, or image, projected by that trade mark. The quantum of sales, advertising and promotion contributes to the ‘recognition’ component of the trade mark’s reputation. The credit, image and values projected by a trade mark attaches to the ‘esteem’ component of the reputation as do the public events and other trader’s marks with which [the] owner of the trade marks in question chooses to associate the trade marks via sponsorships, cross-promotions, ‘contra deals’ and so forth.

    It follows that a trade mark used in relation to goods with comparatively low sales may have a high and strong reputation by virtue of the high credit or esteem in which it is held, or, conversely, that a trade mark which has very high sales may have a strong reputation notwithstanding the lack of esteem that attaches to it. The particular popular images, or sets of values, that attach to the trade mark are also, therefore, important parts of the reputation of the trade mark and may be as strong an associative force in the minds of the public as the association of the trade marks with the goods or services themselves.[18]

    [18] Hugo Boss AG v Jackson International Trading Co Kurt D Bruhl Gesellschaft MbH & Co KG (1999) 47 IPR 423, 426.

11. As stated above, in assessing reputation under s 60, what constitutes a significant or substantial number of persons in the relevant market must be considered. The case of Le Cordon Bleu BV v Cordon Bleu International Ltee[19] was decided under s 28(a) of the (now repealed) Trade Marks Act 1955.  That provision did not refer to ‘reputation’ at all, only that use of the impugned trade mark would be ‘likely to deceive or cause confusion’.  Nevertheless the words of Heerey J provide some guidance:

    [19] (2000) 50 IPR 1.

    What is ‘significant’ or ‘substantial’ will depend on the nature of the goods or services in question. For some highly specialised products, awareness among a few thousand persons, or even less, might be sufficient … We are here concerned with foodstuffs sold in supermarkets, delicatessens, milk bars and other retail outlets. The relevant market is virtually the entire Australian population from early teenage years onwards.[20]

    [20] Ibid 20. Heerey J’s decision was overturned on appeal to the Full Federal Court, although not on the point quoted. Indeed the court specifically noted that his approach contained no error; see Renaud Cointreau v Cordon Bleu International Ltee [2001] FCA 1170, [75].

12. Furthermore, in practice, once the requisite reputation is demonstrated, the likelihood of deception or confusion increases the more closely the trade marks resemble each other.[21]

    [21] Qantas Airways Limited v Edwards [2016] FCA 729 at [142].

13. The Opponent has particularised the ground of opposition in the SGP in the manner set out below: 

    6.1. The Opponent used its KANGEN Trade Marks in relation to various goods and services prior to the 24 September 2016 filing date of the opposed trade mark application.

    6.2. By reason of that use, the Opponent’s KANGEN Trade Marks have become well known in Australia. The Opponent has acquired significant goodwill and a strong reputation in its KANGEN Trade Marks in connection with its goods and services. The Opponent’s reputation in its KANGEN Trade Marks was acquired before the 24 September 2016 filing date of the opposed trade mark application.

    6.3. Because of the reputation of the Opponent’s KANGEN Trade Marks, use of the opposed trade mark would be likely to deceive or cause confusion in the marketplace.

14. The Opponent provides no evidence of the recognition, reputation or esteem in which the KANGEN Trade Marks were held in Australia as at the relevant date.  The only evidence the Opponent has provided of marketing is the presence of a number of websites and a Facebook page however the Opponent provides no evidence of the number of visitors to those pages.  The Opponent provides evidence of global marketing expenditure but no evidence of marketing expenditure in Australia.  The Opponent has provided evidence of sales in Australia over a 7 year period, however given the cost of the Opponent’s products and the potential breadth of the market such sales are unimpressive. The Opponent does refer to the existence of 10,000 distributors in Australia and New Zealand, however for the reasons set out in paragraph 13 above, I am sceptical of that figure, which is not supported by documentary evidence.  Given the absence of any significant marketing expense and limited sales figures I am not satisfied that at the relevant date, the KANGEN Trade Marks had acquired a reputation in Australia.  Furthermore were I to find otherwise, such a reputation would be in the Opponent’s Goods, which are sufficiently different to the Applicant’s Services that no confusion would arise.

15. I find that the Opponent has failed to establish the ground of opposition pursuant to s 60 of the Act.

    Section 42

    44. Section 42 of the Act is reproduced below:

    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.

    45.      The Opponent pressed this ground of opposition solely on the basis that the use of the Trade Mark would be contrary to law (s 42(b)).  The onus is on the Opponent to establish that use of the Trade Mark by the Applicant would be, rather than could be, contrary to law on the balance of probabilities.[22]  The relevant time for assessing whether an application is contrary to law is at the relevant date but ‘looking forward to prospective conduct after registration’.[23]

    [22] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683.

    [23] Time Warner Entertainment Co LP v Stepsam Investments Pty Ltd [2004] 59 IPR 343, 353.

    46.      The Opponent has particularised the ground of opposition in the SGP as follows: 

    1.1. Use of the opposed trade mark is contrary to Australian Law within the meaning of section 42(b) of the Trade Marks Act 1995, because such use would be contrary to sections 18 and 29 of the Australian Consumer Law.

    1.2. Use of the opposed trade mark by the Applicant would amount to engaging in conduct in the course of trade that is misleading or deceptive, or likely to mislead or deceive.

    1.3. Use of the opposed trade mark by the Applicant would amount to engaging in conduct that is liable to mislead the public as to the nature or characteristics of the Applicant’s services.

    1.4. Use of the opposed trade mark by the Applicant in relation to the Applicant’s services will result in false and/or misleading representations in connection with the supply or promotion of services. In particular, such conduct will falsely and/or misleadingly represent that:

    1.4.1. The Applicant’s services are of a particular kind, standard, quality, grade, composition, style or model;

    1.4.2. The Applicant’s services have the Opponent’s sponsorship, approval or endorsement; and/or

    1.4.3. The Applicant has the Opponent’s sponsorship, approval, endorsement or is affiliated with the Opponent.

    1.5. Such use is likely to cause damage to the business and goodwill of the Opponent in Australia, including:

    1.5.1. Damage to the goodwill and reputation through mistaken associations; and

    1.5.2. Erosion of the distinctiveness of the Opponent’s common law trade marks through dilution of goodwill.

    1.6. Use of the opposed trade mark is contrary to Australian Law within the meaning of section 42(b) of the Trade Marks Act 1995, because such use amounts to Passing Off at common law.

    1.7. Use of the opposed trade mark would constitute a misrepresentation made in the course of trade to prospective or actual customers. In particular, such conduct would constitute a misrepresentation by the Applicant in the course of trade that:

    1.7.1. The Applicant’s services originate from the Opponent;

    1.7.2. There is some form of business association between the Applicant and the Opponent or that the Applicant has the Opponent’s sponsorship, approval, endorsement or is affiliated with the Opponent; and/or

    1.7.3. The Applicant has been licensed by the Opponent to use the Applicant’s mark in relation to the Applicant’s services.

    1.8. Such use is likely to cause damage to the business and goodwill of the Opponent in Australia. Such damage includes the following:

    1.8.1. Damage to the goodwill and reputation through mistaken associations;

    1.8.2. Erosion of the distinctiveness of the Opponent’s trade marks through dilution of goodwill.

16. As previously stated the Opponent has failed to establish a ground of opposition under s 60 of the Act. The test for misleading or deceptive conduct under s 18 of the Australian Consumer Law (‘ACL’) is a more stringent one than that for deception or confusion under s 60,[24] and consequently I find that the Opponent has also failed to establish that the Applicant’s use of the Trade Mark would be contrary to s 18 of the ACL.

    [24] See, e.g.: Ownit Homes Pty Ltd v Ownit Conveyancing Pty Ltd [2005] ATMO 47, [36]; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, 198.

17. Paraphrasing the statement of the Registrar’s Delegate in A G Professional Hair Care Products Ltd v Geagroup Invest SRL[25], where a trade mark does not run afoul of s 18 of the ACL, neither will it run afoul of s 29 of the ACL. In Pacific Publications Pty Ltd v IPC Media Pty Ltd, Beaumont J considered—in connection with the superseded Trade Practices Act1974 (‘TPA’)—that ‘the Court’s conclusion on s 52 would necessarily carry with it a conclusion on s 53(c) and (d)’.[26] Sections 52 and 53 of the TPA were, respectively, the equivalent provisions to ss 18 and 29 of the ACL. Hill J in Re Equity Access Pty Ltd v Westpac Banking Corporation also addressed the relationship between s 52 of the TPA and passing off. His Honour considered that:

    [25] [2014] ATMO 65, [50].

    [26] [2003] FCA 104, [107].

    The scope for the operation of s 52 will thus be broader than that involved in the tort of passing off so that in a case such as the present where the claim is for the protection of the reputation in a name against the use of that name by another, failure to succeed under s 52 or s 53 will invariably mean that proceedings for passing off would likewise fail.[27]

    [27] [1989] FCA 506, [40] (citations omitted).

    49. For these reasons I am not satisfied that use of the Trade Mark by the Applicant would be contrary to law. Therefore, the Opponent has failed to establish the ground of opposition under s 42(b).

    Section 62A

18. Section 62A of the Act is reproduced below:

    62A Application made in bad faith

    The registration of a trade mark may be opposed on the ground that the application was made in bad faith.

19. The Explanatory Memorandum to the Trade Marks Amendment Bill 2006 provided some non-exhaustive examples of applications made in bad faith:

    ·persons who monitor new property developments, register the names of new developments as trade marks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers licence or buy the trade marks;

    ·persons who have a history of applying for trade marks that are deliberate misspellings of other registered trade marks;

    ·persons who identify trade marks used overseas but with no Australian use as yet who then apply to register the trade marks in Australia for the express purpose of selling them to the overseas owners.

20. The case of Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) is a current leading Australian authority on s 62A. In that case, Dodds-Streeton J made the following comments, quoting from Harrison’s Trade Mark Application[28]:

    [28] [2004] EWCA Civ 1028; [2005] FSR 10.

    Clearly the court, when considering bad faith, cannot apply a purely subjective test, called by Lord Hutton ‘the Robin Hood test’. The dishonest person or one with low standards cannot be permitted to obtain trade mark registrations in circumstances where a person abiding by a reasonable standard would not. The registration of a trade mark is designed to enable bona fide proprietors to protect their proprietary rights without having to prove unfair trading. Registration is not provided to help those with low moral standards.

    … The words ‘bad faith’ suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.[29]

    [29] [2012] FCA 81, [147].

1. Her Honour continued later in the same decision:

   The formulation in United Kingdom authority of bad faith as falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in a particular area is, in my view, an apt touchstone. An overly literal application may, however, tend to negate the relevance attributed to the applicant’s mental state in the combined test preferred in Harrison.

   Further, in my view, mere negligence, incompetence or a lack of prudence to reasonable and experienced standards would not, in themselves, suffice, as the concept of bad faith imports conduct which, irrespective of the form it takes, is of an unscrupulous, underhand or unconscientious character.[30]

   [30] Ibid [165]-[166].

   54.      The Opponent has particularised this ground of opposition in the SGP as follows:

   7.1. The Applicant filed the opposed trade mark application in bad faith.

   7.2. The Opponent has used its KANGEN Trade Marks in Australia for many years and enjoys a strong reputation in these trade marks.

   7.3. A reasonable person, standing in the shoes of the Applicant, would be aware that they ought not to apply for registration of KANGEN as a trade mark in Australia.

   55.      It is clear from the Opponent’s evidence that there are a number of broader disputes between the Opponent and the Applicant however I do not find that there is sufficient evidence that the application to register this particular Trade Mark was made in bad faith.  In the present case the evidence before me does not establish that the Opponent has any particular reputation in the KANGEN Trade Marks and, to the extent it has any such reputation, such reputation is for the Opponent’s Goods, which are very different to the Applicant’s Services.  Finally I note that the Applicant is the registrant of the Earlier Mark for KANGEN with a priority date of 10 January 2009, and as such it is difficult to reach the conclusion that the application to register the Trade Mark is conduct that is unscrupulous, underhanded or unconscientious, when all the Applicant seeks to do is to register an identical mark to the one it already holds for a range of services completely unrelated to the goods for which the Opponent uses its KANGEN Trade Marks.

2. Consequently I find that the Opponent has failed to establish the ground of opposition under s 62A.

   Decision

   57.     The Opponent has failed to establish any of the grounds of opposition it nominated in the SGP.  Trade mark application no. 1798917 may proceed to registration not less than one month from the date of this decision.  If the Registrar has been served with a notice of appeal before that time, I direct that registration shall not occur until either the appeal is withdrawn or discontinued.  Otherwise the disposition of the application should be in accordance with the Court’s order or direction.

   Costs

3. The Applicant has sought an award of costs in its favour. I see no reason to depart from the general rule that costs follow the event. I accordingly award costs against the Opponent under section 221 of the Act in the relevant amounts under Schedule 8 of the Trade Mark Regulations 1995.

   Nicholas Smith
   Hearing Officer
   Oppositions and Hearings
   27 November 2018