Factor Holdings Ltd v Apollo Bicycle Co Pty Ltd

[2019] ATMO 128

TRADE MARKS ACT 1995

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

Re:Opposition by Factor Holdings Ltd to registration of trade mark application number 1770983 (classes 11, 12) - FACTOR - in the name of Apollo Bicycle Co Pty Ltd

Delegate:

Jock McDonagh

Representation:

Opponent: Martin Earley of Baxter IP Patent and Trade Mark Attorneys
Applicant: Norman Morcom of Morcom Pernat Patent and Trade Mark Attorneys

Decision:

2019 ATMO 128

Trade Marks Act 1995 (Cth) – opposition under section 52 – ass 42(b), 43, 58, 60, 62 and 62A considered – none established – trade mark will proceed to registration

Background

1. This matter relates to an opposition under section 52 of the Trade Marks Act 1995 (‘the Act’) to the registration of a trade mark filed by Apollo Bicycle Co Pty Ltd (‘the Applicant’). Relevant details of the opposed application are set out below.

Application No

1770983

Trade Mark

FACTOR

(‘the Trade Mark’)

Filing Date:    

24.05.2016

(‘the Priority Date’)

Goods:

Class 11: Bicycle lamps; Bicycle lights; Bicycle reflectors for attachment to spokes

Class 12: Air pumps for bicycles for the inflation of tyres; Air pumps for inflating bicycle tyres; Bells for bicycles; Bicycle bells; Bicycle brakes; Bicycle carriers; Bicycle frames; Bicycle handle bars; Bicycle pumps; Bicycle racks (carriers); Bicycle rims; Bicycle saddles; Bicycle seats; Bicycle stands; Bicycle tires (tyres); Bicycle tyres; Bicycles; Bottle carriers for bicycles; Brakes for bicycles, cycles; Braking apparatus for bicycles; Carrying racks for bicycles; Covers for bicycle saddles; Cushions for bicycle seats; Dress guards for bicycles; Dress guards for bicycles, cycles; Fittings for bicycles for carrying beverages; Handle bars for bicycles, cycles; Hubs for bicycles; Inner tubes for bicycles, cycles; Mountain bicycles; Pedal bicycles; Pedals for bicycles; Pumps for bicycles, cycles; Pumps for inflating bicycle tyres; Rims for wheels of bicycles, cycles; Saddle covers for bicycles or motorcycles; Saddles for bicycles, cycles or motorcycles; Tires for bicycles, cycles; Toe straps for use on bicycles; Tyres for bicycles, cycles; Water bottle cages for bicycles; Wheels being parts of bicycles; Wheels for bicycles, cycles; Mountain bikes

1. The Trade Mark was examined in compliance with section 31 of the Act and was advertised as accepted for possible registration in the Australian Official Journal of Trade Marks on 13 October 2016. Factor Holdings Ltd (‘the Opponent’) filed a Notice of Intention to Oppose the registration of the Trade Mark on 12 December 2016 and a Statement of Grounds and Particulars (‘the Statement’) on 11 January 2017.  Thereafter the Applicant filed a Notice of Intention to Defend on 17 February 2017. The parties then filed evidence as provided by the Trade Mark Regulations 1995 (‘the Regulations’).

2. The parties were advised of their right to be heard or to make written submissions.  The parties elected to be heard, and filed outline of written submissions prior to the hearing.

3. I heard the matter in Canberra on 18 March 2019 as a delegate of the Registrar of Trade Marks. The Opponent was represented by Martin Earley of Baxter IP, Patent and Trade Mark Attorneys. The Applicant was represented by Norman Morcom of Morcom Pernat Patent and Trade Mark Attorneys, who appeared by video link.

   Grounds of Opposition

4. The Opponent nominated the following grounds of opposition under the Act, all of which were pressed at the hearing:

   • Section 60: The Trade Mark is similar to a mark that has acquired a reputation in Australia; and
   • Section 42(b): Use of the Trade Mark would be contrary to law (by virtue of breach of section 18 and 29 of the Australian Consumer Law, and action constituting the tort of passing off).
   • Section 43: The Trade Mark is likely to deceive or cause confusion;
   • Section 58: The Applicant is not the owner of the Trade Mark;
   • Section 62: Acceptance on the basis of evidence or submissions false in material particulars;
   • Section 62A: Application made in bad faith.

5. To succeed in its opposition the Opponent bears the onus of establishing at least one of these grounds on the ‘balance of probabilities’.[1]

   [1] Following Gyles J in Pfizer Products Inc v Karam [2006] FCA 1663, [6]-[26], affirmed by the Full Federal Court in Telstra Corporation Limited v Phone Directories Company Ltd [2015] FCAFC 156, [132]-[133].

6. The time at which the grounds of opposition must be established is the date of filing of the application for registration.[2]

   [2] See Southern Cross Refrigerating v Toowoomba Foundry Pty Ltd (1953) 91 CLR 592 at 595.

   Evidence

7. The evidence filed in these proceedings consists of the following declarations:

Declarant and Position	Date Made	Exhibits
Evidence in support
Baden Cooke, employee and part-owner of Opponent (‘First Cooke declaration’)	18.05.2017	BC-1 to BC-41
Jeremy Hunt, professional cycling coach (‘Hunt declaration’)	23.05.2017	JH-1 to JH-3
Evidence in answer
Brian Bird, Financial Controller of Applicant (‘Bird declaration’)	30.08.2017	BB-1 to BB-9
Evidence in reply
Baden Cooke, employee and part-owner of Opponent (‘Second Cooke declaration’)	20.07.2018	FBC-1 to FBC-3
Warren Goodman Chandler, Attorney for Opponent (‘Chandler declaration’)	20.07.2018	WGC-1 to WGC-3

1. The First Cooke declaration is made by Baden Cooke, employee and part-owner of Opponent. He has been a competition cyclist from the age of 11 and cycled professionally in the period 2000 to 2013. Relevant features of his declaration include:

   ·     He has represented in cycling Australia in both Commonwealth and Olympic Games;

   ·     Between 2002 and 2012 he participated in six Tours de France, winning the Green Jersey in Stage 20 of the 2003 Tour;

   ·     Since 2013 he has been involved in rider management and high-end bicycle wheel manufacture;

   ·     He claims to be an expert in cycling and road bikes;

   ·     Branding on bikes invariably appears on the frame of the bike itself, although some component parts may carry other branding that does not denote the origin of the bike itself;

   ·     A predecessor in title of the Opponent, BF1 Systems, is a market leading provider of electrical, electronic and composite solutions to clients within the motorsport, automotive, aerospace, and sports industries;

   ·     BF1 Systems produced a first model bicycle in 2009, branded ‘Factor 001’, which included cutting edge technologies, built to extremely high specifications and was years ahead of its time, and cost GB £25,000 at Harrods department store.

   ·     On 8 December 2009, the Factor 001 bicycle was featured in Bike Radar, an online subscription magazine service targeted to UK, USA and Australian readers (Exhibit BC‑5);

   ·     On 8 November 2013, the Factor Vis Vires bicycle was featured in Bike Radar, indicating a price range of GB £7,999 to GB £9,999 (Exhibit BC‑8);

   ·     Confidential exhibit BC-23 is an invoice to an Australian customer in 2012 for the deposit for one FACTOR one-77 bicycle package worth nearly A$50,000 (there are similar invoices for a further three Australian customers in 2013 and 2014);

   ·     The Opponent’s bicycles were formally launched into the Australian market towards the end of 2015, as a prelude to the 2016 Tour Down Under held in January 2016;

   ·     There are many publicity shots showing the Opponent’s bicycles in various localities around the world;

   ·     In the period from 27 July 2011 to 25 June 2015 the Opponent has registered the word FACTOR in the UK, EU, and Chin, the word FACTORBIKES in China, and the following device in the EU (18 April 2012):

2. The Hunt declaration is made by a professional cycling coach, who also rode professionally from 1996 to 2012. He was the British national road race champion in 1997 and 2001. He deposes to knowledge of the Opponent’s bicycles since 2013, and associates the word ‘Factor’ with high-end, high quality, professional bicycles supplied by the Opponent.

3. The Bird declaration is made by the financial controller of the Applicant, and relevantly states:

   ·     Mr Bird has been employed as financial controller since 2008;

   ·     He reports to the Managing Director of the Applicant, Simon Burke;

   ·     Mr Burke purchased the Applicant company in December 2009;

   ·     In 2008, or early 2009, Mr Burke decided to launch a brand of bicycles, bicycle parts, and bicycle apparel under the FACTOR brand and has been used continuously since then;

   ·     Mr Bird recalls discussions with Mr Burke regarding the adoption of FACTOR as the trade mark;

   ·     He recalls the major reason being the word not being descriptive of the goods and the broad letters lent themselves to imaginative graphic design;

   ·     At no time was it mentioned or intimated that the word was used for the subject goods in Australia, or elsewhere;

   ·     Mr Burke decided to own the mark personally, but allow the Applicant company to use it;

   ·     On 13 April 2009, Mr Burke filed application 1483535 for the word FACTOR in classes 11, 12, and 25 in his own name;

   ·     Subsequently in 2009, Mr Burke assigned ownership of the name FACTOR and the trade mark registration 148535 to the Applicant;

   ·     During the process of assignment, it was considered that the trade mark specifications did not accurately reflect the range of goods to be sold under the mark;

   ·     Consequently, the Trade Mark was applied for;

   ·     Annex BB-1 shows an email dated 28 May 2009 showing artwork of a FACTOR device to be applied to various bicycle components;

   ·     Annexes BB-2 to BB-8 show various flyers dated from 2012 to 2015 showing goods under the Trade Mark; and

   ·     Annex BB-9 shows an undated photograph of a bicycle bearing the words APOLLO and ELITE on the frame and FACTOR in fancy script on the wheels and stated to be marketed by the Applicant from 2012 to at least 2014.

4. The Chandler declaration exhibits IP Australia file records relating to trade mark registrations 1483535 and 1770983 (the Trade Mark).

5. The second Cooke declaration repudiates the suggestion in the Bird declaration, especially paragraph 23 and Annex BB-9, that the Applicant markets an APOLLO FACTOR bicycle. It points out that the Annex shows an APOLLO ELITE RACELINE bicycle, and that the declarant has never heard of an APOLLO FACTOR bicycle.

6. The second Cook declaration further states that the Opponent’s FACTOR bicycle uses components (other than the frame) bearing other manufacturers’ names. It also exhibits at FBC-3 an on-line advertisement, dated 10 April 2018, for an APOLLO ELITE bicycle, which details the various components none of which bear the Trade Mark.

7. However, I note that the exhibited advertisement shows under the heading ‘colours’: ‘Factor Carbon 27.2mm, 300mm post, twin bolt, forged head, alloy seat clamp’. This is obviously not a colour but would seem to relate to the heading ‘Seatpost/clamp’.

8. Where required, I will refer to specific evidence items under the relevant grounds of opposition.

9. I note that that the Opponent has applied to register the following trade mark:

Application No	Filing Date	Trade Mark	Goods
1815231	12.12.2016	Class 12: bicycles; specialist road bicycles; bicycle frames; bicycle pedals; bicycle wheels; bicycle tyres; bicycle brakes, bicycle chains, bicycle handle bars, bicycle drive gears, bicycle saddles, parts, fittings and accessories for bicycles in this class

1. I now turn to the grounds of opposition.

   Section 60: Trade mark similar to trade mark that has acquired a reputation in Australia

2. Section 60 of the Act provides:

   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.

3. To establish its ground of opposition under section 60 the Opponent must demonstrate that as at the Priority Date there was another trade mark that had acquired a reputation in Australia amongst a significant number of persons in the relevant market such that use of the Trade Mark would be likely to deceive or cause confusion.

4. Reputation is to be assessed according to the test set out in McCormick & Company Inc v McCormick[3] per Kenny J at [81] - [82]:

   What is intended by the word "reputation" in s 60? The word is defined in The Macquarie Dictionary as follows:

   reputation ... 1. the estimation in which a person or thing is held, esp. by the community or the public generally; repute ... 2. favourable repute; good name ... 3. A favourable and publicly recognised name or standing for merit, achievement, etc. ... 4. The estimation or name of being, having done, etc, something specified.

   Cf. The Oxford English Dictionary. In s 60, the word is, I think, apt to refer to "the recognition of the McCormick & Co marks by the public generally".

   Does the evidence establish that in Australia before 9 March 1992 the McCormick & Co marks were recognised by the public generally and, because of that, the use by Mary McCormick of her marks would be likely to cause the public confusion, as for example, by the public's mistakenly attributing a business connection between the two or attributing her product to the company?

   [3] (2000) 51 IPR 102.

5. Further, at [86], Kenny J said:

   In practice, it is commonplace to infer reputation from a high volume of sales, together with substantial advertising expenditures and other promotions, without any direct evidence of consumer appreciation of the mark, as opposed to the product.

6. The majority of the Opponent’s evidence comprises media articles that feature the Opponent’s bicycles in the UK and Europe. Many feature the high-tech nature and the very high price of the Opponent’s bicycles.

7. There are four invoices for Australian purchasers of bicycle packages (from the UK), for substantial prices.

8. Most of the promotional material is not necessarily directed at the Australian market, although it is obviously available to be accessed on the internet. It is not until the lead up to the bicycle Tour Down Under in January 2016 that promotional material features the Opponent’s bicycle in Australia.

9. There is no evidence of any advertising or promotional expenditure in Australia at any time prior to the priority date. Nor is there any evidence of actual confusion in the Australian marketplace.

10. I consider that the Applicant has established its own reputation in the general consumer market for bicycle accessories and components in Australia, and such a reputation was established before the Opponent commenced considering launching its product in Australia.

11. While I do not consider that there is sufficient evidence of requisite reputation in Australia, any reputation the Opponent might have achieved would be in a quite different elite niche market for high-end, and hi-tech, racing bicycles.

12. I do not consider that the Opponent has established the requisite reputation in regard to the goods the subject of the application. Therefore, I am not satisfied that this ground of opposition has been established.

    Section 42(b): Trade mark’s use contrary to law

13. Section 42 of the Act relevantly provides:

    42 Trade mark scandalous or its use contrary to law

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

    (b)       its use would be contrary to law.

14. The Opponent nominated contraventions of sections 18 and 29 of the Australian Consumer Law (‘ACL’) and passing off. Section 18 is contravened when a party engages in conduct in trade or commerce that is misleading or deceptive, or is likely to mislead or deceive customers. Section 29 applies where use of the Trade Mark would amount to a false representation within the terms of section 29.

15. There must be a ‘real but not remote chance or possibility’ of that a customer will be misled or deceived regardless of whether that chance it is less or more than 50 percent.[4]

    [4] Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25 at 34, per Bowen CJ, Lockhart and Fitzgerald JJ.

16. As I have found that the use of the Trade Mark is not, at a minimum, likely to “deceive or confuse” under section 60, it follows that the use is not, on the stricter test posited by the ACL[5], likely to mislead or deceive within the meaning of section 18, nor do I believe use would amount to a false representation in terms of section 29, nor passing off.

    [5] Parkdale Custom Built Furniture Pty. Limited v Puxu Pty Limited 1982] HCA 44.

17. I therefore find that the Opponent has not established the ground of opposition under section 42(b) of the Act.

    Section 43: Trade mark likely to deceive or cause confusion

    35. Section 43 provides:

    43 Trade mark likely to deceive or cause confusion

    An application for the registration of a trade mark in respect of particular goods or services must be rejected if, because of some connotation that the trade mark or a sign contained in the trade mark has, the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion.

18. To establish a ground of opposition under section 43, there must be an inherent connotation within the trade mark which is likely to deceive or cause confusion. The comments of Gyles J in Pfizer Products Inc v Karam[6] outlined the history of section 43 of the Act, stating that:

    [6] Pfizer Products Inc v Karam (2006) 70 IPR 599 (at [52 -53]).

    Section 43 does not have a long pedigree. It was enacted pursuant to Australia’s obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). TRIPS and the 1992 Working Party Report led to a 1994 Bill containing the following cl 42(2):

    ‘An application for the registration of a trade mark in respect of particular goods or services must be rejected if the use of the trade mark in relation to those goods or services would be likely to deceive or cause confusion regarding:

    (a)the nature, quality, origin, intended purpose, or some other characteristic, of the goods or services; or

    (b) any connection or relationship that they may have with any particular person.’

    That Bill was enacted but never came into force. In the 1995 Bill (and Act) cl 42(2) of the 1994 Bill was replaced by what is now s 43 of the 1995 Act. The Explanatory Memorandum stated that cl 43 provides:

    ‘That an application for registration must be rejected if the trade mark ... because of some signification inherent to it, would be likely to deceive or cause confusion regarding a characteristic of the goods or services.’
    [Emphasis added]

    It seems that the final form of s 43 is a wider version of the earlier clause with a similar purpose.

    ‘Connotation’ is a secondary meaning implied by the mark. The likelihood of deception or confusion must flow from the secondary meaning inherent in the mark itself. It is apparent that the underlying purpose of s 43 is a similar purpose to that lying behind ss 52, 53 and 55 of the Trade Practices Act 1974 (Cth). It is to prevent the public being deceived or confused as to the nature of the goods offered by reason of a secondary meaning connoted by the mark in question…

19. The Opponent has not identified any secondary meaning in the Trade Mark that would attract this ground of opposition. The Opponent is rather relying on the similarity of the opposing trade marks, which is not appropriate for this ground.

20. I therefore find that the Opponent has not established the ground of opposition under section 43 of the Act.

    Section 58

21. Section 58 of the Act is reproduced below:

    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.

22. The owner of a trade mark is the person[7] who first uses it in Australia, or first files a trade mark application in Australia, whichever is the earlier.  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;[8]

    ·     the Applicant’s Goods are the ‘same kind of thing’ as the goods for which the trade mark(s) relied upon by the Opponent was used;[9] and

    ·     that a person other than the Applicant used the trade mark relied upon by the Opponent before the Applicant used the Trade Mark or before it applied to register it, whichever is the earlier.[10]

    [7] ‘Person’ includes a body of persons, whether incorporated or not: see s 6 of the Act.

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

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

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

1. In the statement, the Opponent has nominated its own use of its trade marks (mentioned in [9] above] on its Facebook page from 6 January 2011, its website ( launched 20 April 2012, Twitter from 10 December 2012, other social media, and trade magazines from 2009.

2. The evidence informs me that the first demonstrated use of FACTOR in Australia for the same kind of goods as specified for the Trade Mark was by the Applicant on or about 28 May 2009, when it organised artwork for the application of FACTOR to bicycle component parts.

3. While it may be the case that the Opponent had commenced producing high-end bicycles marked as FACTOR/FACTOR 001 at some time in 2009, there is no evidence of the Opponent using FACTOR as a trade mark in Australia for the same kind of goods before the Applicant. 

4. Consequently, the Opponent’s ground of opposition pursuant to s 58 has failed the third factor. I find that the Opponent has failed to establish the ground of opposition under s 58.

   Section 62 – Application etc. defective etc

5. Section 62(b) provides as a ground of opposition that the Registrar accepted an application for registration on the basis of evidence or representations that are false in material particulars.

6. In the Statement, the Opponent alleges that the claim of ownership in the application was false in that the Applicant would have been aware of the Opponent’s use of the word FACTOR on its bicycles.

7. In submissions, the Opponent alleged that the Bird declaration was false, in that in its heading it referred to ‘Simon Bird’ rather than ‘Brian Bird’ and was inconsistent with other evidence.

8. As I have found earlier, I am satisfied that the Applicant adopted the Trade Mark independently in Australia in 2006. The evidence supports the contention that the Trade Mark was originally applied for by the managing director of the Applicant, who since consented to the registration of the Trade Mark in more appropriate goods specifications.

9. The typing mistake in the heading to the Bird declaration is not repeated in the text, or in Annexure cover pages. I apply the ‘slip rule’ to it and attach no importance to it.

10. There is no evidence that supports this ground and I find that the Opponent has failed to establish it.

    Section 62A

11. Section 62A of the Act provides:

    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.

12. Bad faith was judicially considered in Fry Consulting Pty Ltd v Sports Warehouse (No 2) wherein Dodds-Streeton J stated:

    Bad faith, in the context of s 62A, does not, in my opinion, require, although it includes, dishonesty or fraud. It is a wider notion, potentially applicable to diverse species of conduct.

    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…

    The question is whether, in all the particular circumstances, the applicant’s knowledge was such that his decision to apply for registration at the relevant date would be regarded as in bad faith by persons adopting proper standards.[11]

    [11] [2012] FCA 81 [164].

13. As I have discussed under the s 60 ground, there has been little evidence of trade mark use in Australia of FACTOR by the Opponent prior to November 2015. There was no promotional material specifically directed at the Australian market. The registration by the Applicant of the Trade Mark that it adopted in 2008 or 2009 on the other side of the world to the Opponent’s adoption of the same word, does not appear to me to be in any way “unscrupulous” or “underhand”.

14. I am not persuaded that the Opponent has discharged the onus of establishing that the Applicant, as at the Priority Date, applied for the Trade Mark in bad faith, in the sense that in all the circumstances, persons adopting proper standards would regard the decision to apply to register the Trade Mark as being in bad faith, or that reasonable and experienced persons in the field would view such conduct as falling short of acceptable commercial behaviour.

15. Accordingly, I find that the s 62A ground of opposition has not been established.

    Decision

16. Section 55(1) of the Act provides:

    Unless subsection (3) applies to the proceedings, the Registrar

    must, at the end, decide:

    (a)  to refuse to register the trade mark; or

    (b)  to register the trade mark (with or without conditions or  limitations) in respect of the goods and/or services then

    specified in the application;

    having regard to the extent (if any) to which any ground on which the

    application was opposed has been established.

    Note: For limitations see section 6.

17. Subsection (3) does not apply to these proceedings.

18. The Opponent has not established any grounds of opposition. The Trade Mark application may accordingly proceed to registration one month from the date of this decision. If the Registrar has been served with notice of appeal before that time, I direct that registration of the Trade Mark shall not occur until the appeal has been decided or discontinued.

    Costs

19. It is usual for costs to follow the event, and I see no reason to depart from that principle here. I award costs against the Opponent under section 221 of the Act in the terms of Schedule 8 of the Regulations.

    Jock McDonagh
    Hearing Officer
    Oppositions and Hearings
    Trade Marks and Designs

    28 August 2019