Expensify, Inc v SWAPPOINT AG

TRADE MARKS ACT 1995

DECISION OF A DELEGATE OF THE REGISTRAR OF TRADE MARKS WITH REASONS
Re:Opposition by Expensify, Inc to extension of protection under regulation 17A.33 of the Trade Marks Regulations 1995 (Cth) of trade mark number 2126633 (International Registration number 1553877) (classes 9, 36, 38, 39, 41, 42 and 45) - KARMAPOINT - in the name of SWAPPOINT AG

Delegate:

Anne Makrigiorgos

Representation:

Opponent: David Moore of Henry Hughes IP Ltd

Holder: Sonia Stewart of Counsel instructed by Peter Ryan and Robert Cooper of MinterEllison

Decision:

2023 ATMO 188

Trade Marks Regulations 1995 (Cth) – opposition to extension of protection under regulation 17A.33 – s 59 of the Trade Marks Act 1995 (Cth) considered and not established – protection to be extended to Australia

Background

This is a decision in respect of an opposition by Expensify, Inc (‘Opponent’) under reg 17A.33 of the Trade Marks Regulations 1995 (Cth)[1] to the extension of protection of the following International Registration Designating Australia (‘IRDA’):
International Registration number:          1553877
Australian trade mark number:   2126633 (‘Application’)
Trade mark:  KARMAPOINT (‘Trade Mark’)
Holder:   SWAPPOINT AG (‘Holder’)
Filing Date:  5 June 2020 (‘Filing Date’)
Priority Date:  9 December 2019 (‘Priority Date’)
Specification:  Classes 9, 36, 38, 39, 41, 42 and 45 (Holder’s Goods and Services)[2]
[1] Unless otherwise stated, each reference to a section is a reference to a section of the Trade Marks Act 1995 (Cth) and each reference to a regulation is a reference to a regulation in the Trade Marks Regulations 1995 (Cth).
[2] For the specification in full see Annexure A to this decision.
The Trade Mark was examined and advertised as accepted for possible registration on 27 October 2021.
On 20 December 2021, the Opponent filed a Notice of Intention to Oppose the Trade Mark. On 19 January 2022, the Opponent filed its Statement of Grounds and Particulars (‘SGP’), which this office gave to the Holder on 9 March 2022. The Holder filed a Notice of Intention to Defend the opposition on 7 April 2022.
The Opponent filed Evidence in Support (‘EIS’) on 9 July 2022. The Holder filed Evidence in Answer (‘EIA’) on 11 October 2022. The Opponent filed Evidence in Reply (‘EIR’) on 14 December 2022.
The parties were given the opportunity to be heard. An oral hearing was requested and I heard the matter as a delegate of the Registrar of Trade Marks on 9 October 2023 by video conference. David Moore of Henry Hughes IP Ltd appeared for the Opponent. Sonia Stewart of counsel, instructed by Peter Ryan and Robert Cooper of MinterEllison, appeared for the Holder. Observing the hearing for the Opponent was Kevin Pasquinelli of Robins Kaplan LLP. Both representatives’ oral submissions were supplemented by written submissions which were filed prior to the hearing. I have decided this matter based on the particulars set out in the SGP, the evidence of the parties, and the written and oral submissions of the parties.
Grounds and onus
Regulation 17A.34 provides that an extension of protection may be opposed on any of the grounds on which an IRDA may be rejected and on the grounds set out in ss 58 to 61 and 62A.
The SGP claims a single ground of opposition under s 59.
The Opponent bears the onus of establishing the ground of opposition[3] on the balance of probabilities.[4]
[3] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).
[4] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman JJ).
Evidence
The following evidence was filed:
EIS
Declaration of Sophia Katsoulis, legal counsel of the Opponent’s representative, made on 7 July 2022 (‘Katsoulis Declaration’) with Exhibits SK-1 to SK-5.
EIA
Declaration of Umut Ertan, Founder and member of Board of Directors of the Holder made on 10 October 2022 with Exhibits UE-1 to UE-9.
EIR
Second declaration of Sophia Katsoulis made on 13 December 2022 with Exhibits SK-1 to SK-3.
EIS
Katsoulis declares that she investigated the Holder’s business on 20 June 2022 which included searches of the Holder’s web site ‘karmapoint.com’ (including internet archive searches), the Apple® App Store, the Holder’s Facebook page and LinkedIn page. She annexes screenshots from these searches.
I note that these searches show use of the mark.
EIA
Ertan details that the Holder was registered as a company in Switzerland on 26 February 2019 and is the parent company of Karmapoint AG. Ertan declares he makes the decisions for both companies.
Ertan states that he came up with the idea and concept of the Trade Mark in January 2018 and declares that since that date, he further developed the concept by founding the Holder and committing his idea and concept to writing. Ertan exhibits a handwritten schematic of his idea and concept. Ertan claims that the schematic details his 16 areas of intended use for the Trade Mark. I note the schematic is dated 23 April 2019 and displays the word SWAPPOINT both in different coloured font. Ertan claims that the date is around 2 months after the Holder was founded and that he used the word SWAPPOINT to indicate the intended owner of the Trade Mark. I also note that the schematic displays the word KARMA but not KARMAPOINT. Ertan provides an explanation for this which is essentially that KARMA was something good and positive but as it was difficult to measure, it was important to connect the word KARMA with something measurable, namely POINTS.
Ertan claims that the Trade Mark was also chosen because he intended that the Holder offer, market and manage loyalty, retention and motivation programs for employees, customers and business partners and to provide a trading and exchange platform.
Ertan provides evidence of the registration of the domain name swappoint.com in or around April 2019 and the registration of Karmapoint AG as a company in Switzerland on 20 July 2021. He also claims that from around June 2020 until around May 2021 he instructed various providers to register or secure in the name of the Holder, over 50 domain name registrations for 'KARMAPOINT' and minor variations thereof, including karmapoint.com (around May 2021).
Ertan refers to steps taken from February 2021 to secure a web developer for an app under the Trade Mark. The app was developed around September 2021 and launched on the Apple® App Store and Google® Play in December 2021.
Ertan also refers to instructing his Swiss attorneys to file applications for the Trade Mark for the Holder’s Goods and Services in Switzerland and elsewhere. Ertan states that the Holder’s Goods and Services were intended to reflect the 16 areas of intended use for the Trade Mark in the schematic.
EIR
Katsoulis provides details of:
· IR 1621046 for filed in classes 9, 36 and 42, designating Australia and New Zealand with a priority date of 9 March 2021.
· EU registration number 018162917 for KARMAPOINT in classes 9, 35, 36, 38, 39, 41, 42 and 45 filed 9 December 2019.
Discussion and Reasons
Section 59 provides:
Applicant not intending to use trade mark
The registration of a trade mark may be opposed on the ground that the applicant does not intend:
(a) to use, or authorise the use of, the trade mark in Australia; or
(b) to assign the trade mark to a body corporate for use by the body corporate in Australia;
in relation to the goods and/or services specified in the application.
Note: For applicant see section 6.
Summarising, the SGP provides:
·     At both the Filing Date and the Priority Date, the Holder had not used the Trade Mark anywhere in the world.
·     Over two years after the Priority Date, the Holder has indicated an intention to use the Trade Mark specifically in relation to an app through which points can be accumulated and exchanged for vouchers.
·     The Application covers an excessively broad range of goods and services.
·     The Holder had no intention to use the Trade Mark in Australia in relation to all the goods and services covered by the Application at the time of filing.
Under s 27, an intention to use or authorise use of a trade mark in Australia is a prerequisite to a valid application for registration.
It is well established that applying for registration of a trade mark brings with it a presumption that an applicant intends to use the trade mark.[5] In Aston v Harlee Manufacturing Co, Fullagar J stated:
I do not regard his Honour [Dixon J in Shell Co] as meaning that an applicant is required, in order to obtain registration, to establish affirmatively that he intends to use it. There is nothing in the Act or the Regulations which requires him to state such an intention at the time of application, and the making of the application itself is, I think, to be regarded as prima facie evidence of intention to use.[6]
[5] Aston v Harlee Manufacturing Co (1960) 103 CLR 391.
[6] Ibid, 401.
The presumption arising from filing may be challenged by evidence from the opponent that establishes the contrary, thereby shifting the onus from the opponent onto the applicant and requiring evidence from the applicant which demonstrates the intention to use the trade mark.
The intention must be “a resolve or settled purpose” and immediate use is not required.[7] In Ritz Hotel Ltd v Charles of Ritz Ltd and Another, McClelland J said:
[i]n my opinion the correct view is that an unused mark is not “proposed to be used” by an applicant for registration unless that applicant has, at the time of the application, a real and definite intention to use the mark publicly in Australia as a trade mark, although not necessarily immediately or within any limited time.[8]
[7] Re Ducker's Trade Mark (1928) 45 RPC 397, 402 (Lord Howarth MR).
[8] (1988) 15 NSWLR 158, 203.
Actual use after the date of the application will be relevant to the existence of the required intention.[9]
[9] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [74] (Keane CJ, Stone and Jagot JJ).
Lack of intention cannot be inferred from lack of use per se. In Suyen Corp v Americana International Ltd (‘Suyen’), Dodds-Streeton J stated:
There is long standing recognition that the absence of the requisite intention to use cannot be inferred from lack of use per se, particularly as there may be good reason to defer use until the protection of registration is secured.[10]
[10] Suyen Corp v Americana International Ltd [2010] FCA 638, [207] (‘Suyen’).
Further, Dodds-Streeton J stated in Suyen:
Although non‑use does not, in itself, imply a lack of the intention, the intention would usually accompany genuine use in Australia, which accordingly may constitute evidence of its existence.[11]
[11] Ibid [211].
An opponent need only make out a prima facie case to shift the burden to an applicant to demonstrate intention to use. In my opinion this prima facie case should be sufficiently strong and established by sufficient evidence for the applicant to be called on to answer it.
A mere assertion of lack of intention to use does not require a response from the applicant. Further as Hearing Officer Homann said in Intel Corporation v Magnatex International Pty Ltd:
No evidence as to these matters was led by the applicant. At the same time I must also say that there was no obligation on the applicant to do so. Failure on the part of the applicant to establish affirmatively its capacity or intention to use the mark is in no sense evidence of a lack of such capacity or intention.[12]
[12] [1998] ATMO 20.
The first question for my consideration is whether the Opponent has satisfied its burden of establishing a prima facie case of lack of intention to use by the Holder.
The Holder’s evidence shows that the Holder has used the Trade Mark in respect of an app which was developed around September 2021 and launched on the Apple® App Store and Google® Play in December 2021. The Opponent’s evidence confirms that this app was available to download on the Apple® App Store and Google® Play in June 2022. There is therefore no absence of use.
The Opponent’s written submissions state that “[t]o the extent that the applicant has purportedly offered software or services, they are outside the scope of the trade mark application, and cannot be used to bootstrap an intention to use the KARMAPOINT mark”. Further, the Opponent in its oral submissions claimed that the use by the Holder did not match the Holder’s Goods and Services.
My understanding is that an app is a type of software that can be installed and run on a computer, tablet, smartphone or other electronic device. The Holder’s Goods and Services include within their ambit a claim to software in class 9. Given this, I am perplexed by the Opponent’s claim that the use does not match the Holder’s Goods and Services. Clearly it does.
The Opponent’s evidence also shows the Holder has used the Trade Mark on its web site and social media sites and has filed further applications to protect KARMAPOINT and in Australia and elsewhere.
The Opponent’s evidence does not show that the Holder would be incapable of providing the remainder of the Holder’s Goods and Services or incapable of using the Trade Mark across the scope of the Holder’s Goods and Services.
The fact that, at this time, the Holder has not taken steps to sell all the Holder’s Goods and Services is not unprecedented. It is not uncommon for business plans involving a trade mark to be put on hold, once an opposition matter is afoot. In Paintmaster Products v Lewis Berger & Sons,[13] the Registrar observed that an applicant might properly elect to delay use pending the outcome of the application for registration. The adoption of this approach is usually to ensure that trade mark rights are assured before time and money is expended in the promotion of that mark.
[13] (1955) 25 AOJP 1915.
The Opponent’s evidence may indeed show that the Holder has not yet commenced use of the Trade Mark in Australia in relation to the all the Holder’s Goods and Services. However, in my opinion, the Opponent has fallen short of making a persuasive case for the Holder’s lack of an intention to use the Trade Mark on the Holder’s Goods and Services at the date of the application.
I am not satisfied the Opponent has provided sufficient cogent evidence to establish a prima facie case that the Holder lacked the requisite intention at the date of the application and therefore there is no shift of the evidentiary onus to the Holder. The Opponent has consequently failed to establish the ground of opposition pursuant to s 59.
Decision
Regulation 17A.34N provides:
Decision on opposition
(1) 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 conditions or limitations);
having regard to the extent (if any) to which the grounds on which the IRDA was opposed have been established.
(2) The Registrar must notify the International Bureau of the Registrar’s decision.
I have found the Opponent has not established the ground of opposition it raised pursuant to s 59. Accordingly, protection of the IRDA may be extended to Australia one month from the date of this decision. If the Registrar is served with a notice of appeal before that time, I direct that protection of the IRDA shall not occur until that appeal has been withdrawn or discontinued and that the disposition of the IRDA be in accordance with the court’s order or direction.
Costs
Both parties sought an award of costs. It is usual for costs to follow the event, and there is no reason to depart from that principle here. I award costs against the Opponent in accordance with s 221, in the amounts set out in Schedule 8 of the Regulations
Anne Makrigiorgos
Hearing Officer
Delegate of the Registrar of Trade Marks
23 November 2023
Annexure A
Class 9: Computer hardware; software; data processing apparatus and equipment and accessories [electric and mechanical]; information technology, audiovisual, visual, multimedia and photographic apparatus.
Class 36: Real estate services; insurance services; real estate affairs.
Class 38: Telecommunications; telecommunication services; provision of access to content, websites and Internet portals; provision of access to Internet platforms for the use of Internet services.
Class 39: Transport brokerage; logistics services consisting in merchandise storage, transport and delivery services; carpooling (car-sharing) services; vehicle rental; vehicle driving services; packaging and warehousing of merchandise and general warehousing services; rental of storage space and freezer lockers; delivery of merchandise
Class 41: Training, education, entertainment, sporting activities; services for educational, entertainment, sporting and cultural events; writing of texts (with the exception of advertising texts); electronic publication of information relating to third-party goods and services, namely price comparison data, product reviews and discount information; education; training; entertainment; sporting and cultural activities; publication of information and reviews related to housing, food and beverages (server services).
Class 42: Consultant services in the field of information technology; computer programming services in the field of e-commerce; technological consulting services in the field of e-commerce; hosting of e-commerce platforms on the Internet; scientific and technological services; design services; analysis and evaluation of electronic publications of information and reviews of third-party goods and services as an information service.
Class 45: Legal services, particularly licensing of rights; licensing of franchise concepts (legal services); licensing of industrial property rights and copyrights (legal services); mediation in the field of driving and carpooling services.)

[2023] ATMO 188

23 November 2023