FIrmtech Aluminum Pty Ltd v Firmtech Aluminium Doors and Windows Pty Ltd

[2023] ATMO 72

TRADE MARKS ACT 1995

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

Re:Opposition by Firmtech Aluminum Pty Ltd to registration of trade mark application number 2177163 (class 6) – FIRMTECH ALUMINIUM & Device (stylised) - in the name of Firmtech Aluminium Windows and Doors Pty Ltd

Delegate:

Tracey Berger

Representation:

Opponent: Piper Alderman

Applicant: ANZTax Pty Limited

Decision:

2023 ATMO 72

Trade Marks Act 1995 (Cth) – opposition under section 52 – grounds pursued under ss 42(b), 58, 60 and 62A – ground of opposition established under s 62A – registration of trade mark refused

Background

1. This decision concerns an opposition brought by Firmtech Aluminum Pty Ltd, ACN 619 458 703 (‘Opponent’) under s 52 of the Trade Marks Act 1995 (Cth)[1] to registration of the trade mark detailed below in the name of Firmtech Aluminium Windows and Doors Pty Ltd (‘Applicant’):

Number:       2177163 (‘Application’)

Trade Mark:           (‘Trade Mark’)

Filing Date:  10 May 2021

Goods:Aluminium roll shutters; Aluminium doors; Door fittings of metal; Door guards of metal; Door handles of metal; Door hinges of metal; Door furniture of metal; Door holders of metal; Door holding devices of metal; Door hooks of metal; Door knobs of common metal; Door knockers of metal; Door sections of metal; Door seals of metal; Doors of metal; Doors of metal for buildings; Doors of metal for security purposes; Doors of metal for strong rooms; Doors of metal for use in industrial buildings; Metal door fittings; Metal door handles; Metal door hardware; Metal door surrounds; Metal doors; Metal fittings for doors; Aluminium windows; Metal fitted windows; Metal fittings for windows; Metal windows; Window fittings of metal; Window furniture of metal; Window guards of metal; Window handles of metal; Window hinges of metal; Window openers of metal, non-electric; Window protection devices of metal; Window seals of metal; Windows of metal (‘Applicant’s Goods’)

[1] Unless otherwise indicated, any references to sections or regulations in this decision are references to sections or regulations of the Trade Marks Act 1995 (Cth) (‘Act’) or the Trade Marks Regulations 1995 (Cth) (‘Regulations’), respectively.

1. Following the advertisement of acceptance of the Application for possible registration, the Opponent filed a Notice of Intention to Oppose the registration on 26 November 2021 followed by a Statement of Grounds and Particulars (‘SGP’) on 20 December 2021.  The Applicant filed a Notice of Intention to Defend the opposition on 16 March 2022.

2. The parties were then given the opportunity to file evidence in accordance with the Regulations. The Opponent filed its Evidence in Support (‘EIS’) of the opposition on 16 June 2022. The Applicant filed Evidence in Answer (‘EIA’) on 20 September 2022 followed by the Opponent’s Evidence in Reply (‘EIR’) on 28 November 2022.

3. Once the time for filing evidence had ended, the parties were given an opportunity to request a hearing in this matter or a decision without a hearing.  The Opponent requested that the matter proceed to a decision without hearing and paid the appropriate fee.  Accordingly, the matter has been allocated to me as a delegate of the Registrar for a decision based on the written record. 

Grounds of Opposition, Onus and Standard of Proof

1. In the SGP, the Opponent particularised grounds of opposition under ss 42(b), 58, 60 and 62A. 

2. The Opponent bears the onus of establishing at least one of the nominated grounds of opposition.[2]  The standard of proof is the ordinary civil standard of the balance of probabilities.[3]

   [2] Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58, [32] (Keane CJ, Stone and Jagot JJ).

   [3] Telstra Corporation Ltd v Phone Directories Co Pty Ltd [2015] FCAFC 156, [133] (Besanko, Jagot and Edelman J).

3. The date at which the rights of the parties are to be determined is 10 May 2021 (‘Relevant Date’) being both the filing and priority date of the Trade Mark.

Evidence

1. The following evidence was filed in this matter:

EIS

• Declaration of Jiamin Zhang, co-director and company secretary of Firmtech Aluminium Pty Ltd ACN 626 238 720 (‘FAPL’), made on 15 June 2022 with Annexures JZ-1 to JZ-5 (‘Zhang 1’); and

• Declaration of Xiaoyan Xie, sole director and company secretary of the Opponent, made on 15 June 2022 with Annexures XX-1 to XX-8 (‘Xie 1’).

EIA

• Declaration of Zhaohui Xu, director of FAPL and sole director and company secretary of the Applicant, made on 20 September 2022 with Exhibit ZX-1.

EIR

• Declaration of Jiamin Zhang made on 25 November 2022 with Annexures JZ-6 to JZ-8; and

• Declaration of Xiaoyan Xie made on 25 November 2022.

The Opponent

1. The Opponent was incorporated on 31 May 2017.  Ms Xie is the sole director and company secretary of the Opponent and ultimate beneficial owner of the Opponent as the sole director, company secretary and shareholder of the Opponent’s sole shareholder, JKZ (Australia) Pty Ltd.

2. According to Xie 1, Ms Xie chose the name FIRMTECH for the Opponent because it means “diversity” and “peace” in her first language, Chinese.  Since its incorporation, the Opponent has used the marks FIRMTECH and  in connection with its business of selling and installing aluminium doors, windows, fittings.

3. Ms Xie is married to Jiamin Zhang.  Mr Zhang was friends with Zhaohui Xu.  On 18 May 2018, Mr Zhang and Mr Xu incorporated FAPL, having the same address as the Opponent,  each with a 50% shareholding in the company.  Mr Xu invested a considerable sum of money in FAPL as start-up costs in exchange for his 50% shareholding.  Mr Zhang and Ms Xie contributed their business management experience, customer and supply chain contacts in exchange for Mr Zhang’s shareholding.

4. Ms Xie works at FAPL as a senior manager of FAPL.  Due to her position, Ms Xie claims that she is familiar with FAPL’s operations, books and records.  She claims that she ran the FAPL business with her husband.  Mr Xu is a conveyancer without experience in doors, windows and fitting and therefore, Ms Xie claims that his role was as an investor although Ms Xie and Mr Zhang consulted him on high level matters affecting FAPL’s business.

5. It was agreed that FAPL could use the FIRMTECH name “to leverage the Opponent’s existing resources and reputation”.  Ms Xie and Mr Zhang both declare that in May 2018, the Opponent licensed FAPL, by way of an unwritten agreement, to use the trade marks FIRMTECH and  (‘Opponent’s Logo Mark’).  Collectively, FIRMTECH and the Opponent’s Logo Mark are referred to as the Opponent’s Marks.

6. Ms Xie and Mr Zhang both attest that the Opponent’s Logo Mark was created collectively by herself, her husband and Mr Xu.  A copy of the WeChat conversation (and English translation) about the creation of the Opponent’s Logo Mark is provided.  Mr Zhang claims that he chose the final design of the Opponent’s Logo Mark and that it was to be used for FAPL’s website, signage and business cards to promote the businesses of both FAPL and the Opponent.  The trade mark which is the subject of this chat is attached as a pdf and therefore it is not clear whether the specific mark being discussed was the Opponent’s Logo or the Trade Mark.

7. FAPL worked on a number of successful building and construction projects using the Opponent’s Marks before the Relevant Date in Sydney and Wollongong.  Both Mr Zhang and Ms Xie claim that Mr Xu had little involvement in these projects.  Various invoices and emails relating to these projects are annexed to Zhang 1.  The Trade Mark is used on both the invoices and the emails.  It is apparent from these emails that the website of FAPL is at (‘FAPL’s Website Address’) and that employees (including Ms Xie and Mr Zhang) used the form [name]@firmtechaluminium.com.au.

8. From 2020, Mr Xu became less involved in FAPL’s business in order to concentrate on his other businesses being an abattoir and construction consulting business, Auscon Corporation Pty Ltd (‘Auscon’).  Mr Zhang is also a director and 50% shareholder of Auscon. 

9. On 9 January 2021, Ms Xie, Mr Zhang and Mr Xu met at Revesby Worker’s Club and agreed that the three of them would no longer work together.  They agreed to finalise FAPL’s accounts over the next few months, that Mr Zhang and Ms Xie would complete FAPL’s existing projects and that Mr Xu would start a new business which could use the address of the Opponent and FAPL in the short term.

10. The Applicant was incorporated on 7 May 2021 with Mr Xu as the sole director and company secretary.  Since that time, the Applicant has been offering the same or similar goods and services to the Opponent under the Trade Mark despite Mr Zhang informing Mr Xu in May 2021 that he was not authorised to use the Opponent’s Marks. 

11. Mr Xu employed a manager for the Applicant, John Tsanko.  Mr Tsanko’s business card provides his email address as [email protected], specifies FAPL’s Website Address and the address of the Opponent and FAPL.  Mr Tsanko used that email, address and the company name of FAPL in emails regarding new projects without the knowledge of Ms Xie or Mr Zhang.

12. Mr Zhang claims that he did not authorise Mr Xu or the Applicant to set up a competing business to the Opponent or FAPL.  Both Ms Xie and Mr Zhang attest that the Applicant was not authorised to use the Opponent’s Marks. 

13. Mr Xu was removed as a director of FAPL on 13 September 2022.

The Applicant

1. Mr Xu does not dispute much of Xie 1 or Zhang 1.  However, Mr Xu claims that he created the Trade Mark for FAPL and not for the Opponent.

2. Mr Xu declares that he wanted to continue to be involved in FAPL and incorporated the Applicant with the intention of operating that business on behalf of FAPL.  He acknowledges that he employed John Tsanko as manager of the Applicant.

3. Mr Xu attests that he filed the Application in the name of the Applicant for the benefit of FAPL and accepts that the Applicant “must account to [FAPL] for the business it has carried on effectively on behalf of [FAPL]”.

Discussion

Section 62A

1. Section 62A provides that the registration of a trade mark may be opposed on the ground that the application was made in bad faith.

2. The phrase ‘bad faith’ is not defined in the Act but as Bennett J explained in DC Comics v Cheqout Pty Ltd:[4]

   Bad faith is a combined test that involves subjective and objective elements. The subjective element refers to the knowledge of the relevant person at the time of making the application. The objective element requires the decision-maker to decide whether, in the light of that knowledge, the relevant person’s behaviour fell short of acceptable commercial standards.

   The question is whether the conduct falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area. It is whether the knowledge of the applicant was such that the decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.[5]

   [4] [2013] FCA 478.

   [5] Ibid [62].

3. In the SGP, the Opponent claims that the Applicant, through its director Mr Xu, was aware that the Opponent and its predecessor used the Trade Mark in respect of class 6 goods and had filed the Application in bad faith to prevent the Opponent from using the Trade Mark and/or to misrepresent that the Applicant is associated with the Opponent.

4. There is no dispute between the parties that the Trade Mark was created in May 2018 and that FAPL carried on business under the Trade Mark in relation to the supply and installation of doors, windows and fittings from 2018.  The evidence of Ms Xie and Mr Zhang is that they primarily ran FAPL but consulted with Mr Xu as a director of FAPL.  Mr Xu does not dispute that this was the case before the Relevant Date although he claims he was excluded from the business from mid-2021. 

5. As a director of FAPL who was consulted on FAPL’s business, Mr Xu was well aware that FAPL had been using the Trade Mark for a number of years in relation to the Applicant’s Goods.  Nevertheless, the Applicant carried on business under the Trade Mark in a competing business to FAPL and the Opponent, in a manner intended to indicate that the Applicant was, or was associated with, FAPL.  I note that despite being on notice that the ground of ‘bad faith’ was listed in the Notice of Opposition, followed by the EIS being served on it, the Applicant has chosen not to challenge or dispute that it has acted in bad faith but rather Mr Xu’s evidence is tantamount to an acknowledgement that that the Applicant is not the owner of the Trade Mark.  Knowledge of the Opponent by the Applicant, particularly through a business connection whether prior or current, such that a person standing in the shoes of the Applicant should have known that they should not have applied for a trade mark deceptively similar to that used by the Opponent (or an entity associated with the Opponent), is sufficient for a finding of bad faith.[6]

   [6] Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81; (2012) 201 FCR 565, 596-7 [156] (Dodds-Streeton J); Hard Coffee Pty Limited v Hard Coffee Main Beach Pty Limited [2009] ATMO 26 (Hearing Officer D. Nancarrow).

6. I am satisfied that the Applicant’s conduct falls short of acceptable stands of commercial behaviour and that the Applicant filed the Application in bad faith.

7. The Opponent has established a ground of opposition under s 62A and as such, there is no need for me to consider the other grounds of opposition nominated in the SGP.

Decision

1. The Opponent has established a ground of opposition. As such, I have decided to refuse the Application. Noting the appeal period, this refusal will be recorded one month from the date of this decision unless the Registrar of Trade Marks is served with a notice of appeal. If an appeal is filed, the disposition of this opposition will be for the court.

2. Both parties requested an award of costs. Costs generally follow the event and therefore, I award costs against the Applicant in accordance with the amounts set out in Schedule 8 of the Regulations.

Tracey Berger

Hearing Officer

Delegate of the Registrar of Trade Marks

6 June 2023